Capitol Insurance Company. Personal Automobile. Rate and Rule Manual. Underwriting and Procedures Manual

Transcription

1 Capitol Insurance Company Personal Automobile Rate and Rule Manual & Underwriting and Procedures Manual 1120 Welsh Rd., Suite 220, North Wales, PA Phone: Fax: Effective 9/1/2010 for New Business

2 Mission Statement Capitol Insurance Company is a stock property and casualty company dedicated to protecting our policyholders from financial loss by providing quality products and outstanding services through a network of exceptional producers, and professional claims managers, while maintaining a fair rate of return for our shareholders. We seek to serve our customers, employees, and our communities through a dedicated effort of support and innovation in the property and casualty industry. Our goal is one of long term corporate prosperity fostered in an environment which encourages and promotes the interaction of employees, management, and ownership. Pennsylvania 3 Effective 9/1/2010

3 Telephone Directory Executive Office Ext Chairman, Chief Executive Officer Everett Sorensen President, Chief Operating Officer Gregory C. Sorensen 105 Executive Vice President, CFO Brett G. Sauers. 121 Director of Operations Senior Vice President, Controller Karen Burmeister Reception Kim Powell.125 Accounting Department Senior Accounting Assistant Elaine Marshall Director of Marketing & Underwriting Vice President Walt Blauvelt Agent Manager Phillip Duval Underwriting Department Assistant Vice President Sue Mulvey Underwriter Sallie Hutnyk Underwriter Assistant Marilyn Gibble Records & Information Department Customer Service Department Customer Service Rep, billing Brett W. Sauers Customer Service Rep, payments Rosalie Delaney Claims Claims Management Resources, LLC Correspondence: CAPITOL INSURANCE COMPANY 1120 Welsh Road, Suite 220 North Wales, PA Fax Numbers Executive Fax Line Pennsylvania 3 Effective 9/1/2010

4 RATE AND RULE MANUAL CAPITOL INSURANCE COMPANY Table of Contents PAGE Definitions 2 Rules for Liability Coverage 3 Rules for Physical Damage Coverage 4 Classifications 5 Discounts 1. Restraint Systems 6 2. Anti-theft Devices 6 3. Driver Improvement Course 6 4. Multi-car discount 7 5. Transfer, Renewal, and Paid-in-Full 7 Surcharge Disclosure Plan 1. Convictions 8 2. Accidents 9 3. Surcharges Cannot Be Assessed Inexperienced Operators Refund of Premium Surcharge Factors Named Driver Exclusion 11 Rating Procedures 12 Direct Billing 13 Cancellations 14 Rating Steps 16 Rating Factors 17 Full Tort Base Rates 21 All Other Base Rates 22 Uninsured & Underinsured Motorist Rates 23 Extraordinary Medical Benefit Rates 25 Rating Territories 26 Pennsylvania Rates & Rules 16a Effective 10/15/2008

5 Definitions CAPITOL INSURANCE COMPANY Existing Damage Report: The Existing Damage Report and the Producers and Applicants Affidavit of Vehicle(s) Inspection for Existing Damage Prior to Issue of Binder are the same document Experience Period: The experience period for the purpose of determining the total number of surcharge points applicable, shall be the thirty-six (36) month period immediately preceding the effective date of coverage for new business and renewals. Insurable Interest: The policyholder must be the person(s) who is listed on the vehicle registration, and would suffer a material loss by the happening or occurrence of the accident. Insured: Named insured and the following persons if residing in the household of the named insured: A spouse of the named insured, a relative of the named insured, and a minor in the custody of the named insured or the spouse or relative of the named insured. Married Operator: A widowed, married, divorced, or married and separated person, or a single person with custody of a dependant, minor child. Proof of custody must be provided at the request of the Company. Private Passenger Automobile A. A private passenger automobile is a motor vehicle of the private passenger, station wagon, jeep type that is not used as a public delivery conveyance for passengers, or rented to others. This term excludes any vehicle with less than four (4) wheels including motorcycles, motorized bicycles, motorized scooter and other similar motorized vehicles of the private passenger type. B. A motor vehicle with a pickup body, a delivery sedan or panel truck owned by an individual, or husband and wife, who are residents of the same household and not customarily used in the occupation, profession or business of the named insureds other than in the course of driving to or from work shall be classified and rated as a private passenger vehicle. Prospective insured: A person or entity applying for insurance coverage on a motor vehicle under the act. Symbols: As defined in our rating software and the ISO Manual. Territories: Territories are defined by zip codes. The zip code of the garaging address is used to determine territory. For zip codes not listed, please call Capitol Insurance underwriting. Pennsylvania Rates & Rules 5 Effective 9/1/2010

6 Rules for Liability Coverage CAPITOL INSURANCE COMPANY Each insurer shall be required to write a policy or binder for at least the minimum basic limits of $15,000/$30,000 Bodily Injury and $5,000 Property Damage. All applicants eligible for Liability coverage shall also, at his/her option, purchase additional coverage to be written into the same policy as the liability coverage: Optional Liability Limits are as follows: $25,000/$50,000/$10,000 $50,000/$100,000/$25,000 $100,000/$300,000/$50,000 Capitol Insurance Company is required to offer uninsured and underinsured motorist coverage at the limits shown in the applicable Rates and Rules. Full and Limited Tort Option: The applicant has the option to elect either limited tort or full tort liability coverage. There will be a 40% differential in rate between limited tort coverage and full tort coverage. First Party Benefits with respect to those vehicles subject to the Pennsylvania Motor Vehicle Financial Responsibility Act.: This Company shall provide First Party Medical Benefits coverage under every automobile liability policy as required by the Act and shall make available for purchase by the named insured optional first party benefits, limits and coverages. Coverages Offered A. Bodily Injury Liability B. Property Damage Liability C. Medical Expense Coverage D. Uninsured Motorist E. Underinsured Motorist F. Loss of Income Benefit G. Accidental Death Benefits H. Funeral Expense Benefits I. Comprehensive J. Collision K. Rental Reimbursement L. Extraordinary Medical Expense Benefit M. Combination Benefits N. Lessor Liability Pennsylvania Rates & Rules 6 Effective 9/1/2010

7 Rules for Physical Damage Coverage CAPITOL INSURANCE COMPANY 1. The maximum limit of liability for Comprehensive and Collision coverage is $50, unless it is otherwise stated on the policy declaration page. It is important to note that the $50, limit also applies to all additional and substituted vehicles, unless otherwise stated on the policy declaration page. IT IS IMPERATIVE TO CALL FOR APPROVAL PRIOR TO BINDING COVERAGE ON ANY VEHICLE VALUED OVER $35, The Automobile Inspection Sheet (Existing Damage Report) must be completed and signed by the Agent/Broker and the First Named Insured. 3 Comprehensive Coverage may be written without Collision Coverage. Collision coverage will not be written without Comprehensive Coverage. 4. Deductible amounts for Comprehensive and Collision Coverage may differ. The Deductible options offered by Capitol Insurance Company are as follows: $100.00, $250.00, $500.00, and $1, Pennsylvania Rates & Rules 7 Effective 9/1/2010

8 RATING RULES: CAPITOL INSURANCE COMPANY Classifications There is no operator under twenty-five (25) years of age, no unmarried operator twenty-five (25) or more years of age but less than thirty (30) years of age who is the owner or principal operator, the automobile is not used for business: 1A may be driven to or from work (a) less than three road miles one way or (b) three or more but less than ten (10) road miles one-way, provided the total usage of the automobile is driving to or from work not more than two (2) days per week or not more than two (2) weeks per each five (5) week period. 1B but is driven to and from work a distance of three or more, but less than 10 road miles one way excluding those subject to the 1A classification. 1C but is driven to or from work a distance of 10 or more road miles one way. 3 is used for business. 4C Married (or a single person who retains custody of a minor child) under twenty-one (21) years of age. 5C 4B 5B 4A 5A Married (or a single person who retains custody of a minor child) twenty-one (21) or more years of age, but less than twenty-five (25 years of age. Unmarried, not owner or principal operator under twenty-one (21) years of age. Unmarried, not owner or principal operator twenty-one (21) or more years of age but under twenty-five (25) years of age. Unmarried, owner or principal operator under twenty-one (21) years of age. Unmarried, owner or principal operator twenty-one (21) or more years of age but under twenty-five (25) years of age. 7 Unmarried, owner or operator twenty-five (25) to twenty-nine (29) years of age. NOTE: A vehicle garaged on a farm or ranch and not used in any occupation other than farming or ranching shall be rated as Farming (F). NOTE: A forty percent (40%) surcharge shall be assigned if an automobile (other than classification 3) is used for business. NOTE: Any driver twenty-nine (29) years of age and younger, divorced, or separated with custody of a minor child will have to provide a birth certificate for that minor child at the time of application in order to be given the married rating. If the birth certificate is not provided with the application, the policy will be re-rated at renewal. NOTE: If the spouse of any driver twenty-nine (29) years of age or younger is not licensed, you will need to provide a copy of their marriage certificate with the application in order to obtain the married rating. NOTE: If the spouse of any applicant twenty-nine (29) years of age or younger does not carry the same surname as the applicant, you will need to provide a marriage certificate with the application in order to obtain the married rating. Pennsylvania Rates & Rules 8 Effective 9/1/2010

9 Discounts CAPITOL INSURANCE COMPANY Restraint Systems A discount applies to all first party benefits coverages (Medical Payments, Income Loss, Funeral Expense Benefit, Accidental Death Benefit, Extra Ordinary Medical Expense Benefits, and Combination First Party Benefits Coverage) for each vehicle equipped with one of the following restraint devices. If a vehicle contains more than one type of device, only the highest discount applies: 1. Passive Seat Belts 15% discount for each vehicle which is equipped with a passive seatbelt system which fastens automatically without any action by the driver or front seat passenger. 2. Single Airbag 20% discount for each vehicle which is equipped with an active airbag on the driver s side of the vehicle. 3. Double Airbag 30% discount for each vehicle which is equipped with two airbags. Anti-theft Devices A 10% discount will be applied to the Comprehensive coverage of each vehicle that is equipped with a passive anti-theft device. A passive anti-theft device is defined as an item or system which is designed to prevent unauthorized use of the vehicle. It must be installed in the automobile and must activate automatically when the operator turns the ignition key to the off position. This does not include an ignition interlock, which is provided as a standard anti-theft device by the original manufacturer. Devices such as the club are not considered passive, and therefore, do not qualify for this discount. Driver Improvement Course A discount of 5% will apply to all coverages for each vehicle on a policy under which all named insureds aged 55 and older, have successfully completed a motor vehicle driver improvement course. This course must meet the minimum standards set forth by the Pennsylvania Department of Transportation. The discount will be applied for all policy periods beginning within the three-year period immediately following the successful completion of the course. To be eligible for the discount, all named insureds aged 55 and older must submit proof of course completion. To maintain eligibility for the discount, each participant must take an approved course every three years. It is the duty of the insured to submit proof of completion for both the initial and subsequent courses completed. Pennsylvania Rates & Rules 10 Effective 9/1/2010

10 To continue to be eligible for the discount after the policy expiration, all named insureds in the policy may not be: 1. involved in a chargeable accident; or 2. convicted, or have accepted Accelerated Rehabilitative Disposition (ARD) for driving under the influence of alcohol or a controlled substance. This discount will not apply in the event that the course was ordered by the court or other governmental entity resulting from a conviction of an offense enumerated in Section Pennsylvania Rates & Rules 10 Effective 9/1/2010

11 Multi-Car Discount CAPITOL INSURANCE COMPANY A Multi-Car Discount will be applied to Bodily Injury, Property Damage, Medical Expense, Income Loss, and Collision coverage on each vehicle on a multi-car risk. All vehicles must be listed on the same policy to qualify for the discount. A 15% discount will be given on a policy when the number of designated drivers exceeds the number of vehicles insured on this policy. A 20% discount will be given in all other multi-car policies. If a policy is endorsed mid-term and becomes a multi-car risk, the discount will be prorated on the existing vehicle. Transfer Discount (Prior Insurance) A 5% discount applies to all coverages on a new policy where: 1. the applicant/named insured has been continuously insured for liability with another company for a minimum of 6 months prior to our policy inception. A lapse of no longer than ten (10) days between expiration of the prior insurance and our policy inception is permitted, and 2. all drivers have been continuously licensed for the 12 months prior to policy inception (Note: Temporary suspensions and revocations of license or a restricted license during the most recent 12 months disqualify the operator for the discount). Renewal Discount After completing one policy term, the policy is eligible for the 5% Renewal discount, and for every renewal thereafter. Discount applies to all coverages. Paid in Full Discount A ten (10%) percent discount will be applied to the base rate on all coverages for any insured who pays the premium in full at inception of the policy period. Pennsylvania Rates & Rules 11 Effective 9/1/2010

12 Surcharge Disclosure Plan The vehicle with the highest base premium shall be rated with any assessed conviction points and surcharges assigned under the following Surcharge Disclosure Plan rules. Capitol Insurance Company uses CLUE Reports, the Motor Vehicle Records supplied by the State of Pennsylvania, and information supplied on the application, to underwrite automobile policies. Any accidents that appear on the CLUE reports, or on the state s motor vehicle record, or that are noted on the application, will be reviewed and the following will be used to determine if the driver was or was not at fault: 1. Police Report 2. Letter from insuring carrier at time of accident. 3. Letter from adverse carrier indicating that their insured was at fault. 4. Copy of a claim check indicating that the adverse carrier accepted liability. A. Assignment of Points Any private passenger automobile is to be rated under this Plan. The experience period shall be the three years immediately preceding the effective date of the policy, or the three years ending 30 days prior to the effective date of the next renewal. B. Convictions Points shall be assigned in accordance with the following for motor vehicle violations for which the prospective insured, named insured, or any operator of the vehicle currently resident in the same household has been convicted during the experience period. (1) Four points shall be assigned for the conviction of: (a) driving while intoxicated or under the influence of drugs (this includes refusal to submit to testing for alcohol or drugs); (b) driving during a period while the license is suspended or revoked; (c) Driving a vehicle without a license; (d) Felony involving a motor vehicle; (e) Permitting an unauthorized person to drive; (f) For racing on the highway (including drag racing); (g) Driving on left side of divided highway; (h) Trespass by motor vehicle; (i) Vehicular homicide; (j) Reckless driving. (2) Three points shall be assigned for the conviction of: (a) Failure to stop and report when involved in an accident which results in bodily injury to any person; if an at fault accident results in property damage, points will be charged for the accident only; (b) Homicide or assault arising out of the operation of a motor vehicle; or (c) Suspension of driver s license due to violations, other than one (1) Section 1535 violation. (3) Two points shall be assigned for the accumulation of points under a State Point System or a series of convictions requiring the filing of evidence of Financial Responsibility under any Financial Responsibility Law as of the effective date of the policy. This rule does not apply if points were assigned under (1) & (2) above for the same occurrence. (4) One point shall be assigned for the conviction of any other moving traffic violation resulting in: Pennsylvania Rates & Rules 12 Effective 9/1/2010

13 (a) the filing of evidence of financial responsibility under any Financial Responsibility Law required as of the effective date of the policy. (b) Any moving violations not otherwise listed, and not the first 1535 violation. The Experience Period for assignment of points for conviction is: The three years immediately preceding the date of application or the preparation of the renewal. No points will be assessed solely because of one conviction of an offense enumerated in 75 Pa.C.S If Capitol Insurance Company assesses a surcharge because of payment for an at fault accident, Capitol Insurance Company will not increase the points solely because of one 75 Pa.C.S conviction connected with the same accident. C. Accidents 1. A surcharge of forty (40%) percent will be assessed for an accident occurring during the preceding three year experience period, if the aggregate claim paid by an insurer is determined to be more than the threshold limits described herein, in excess of any selfinsured retention or deductibles applicable to the named insured, and if the accident involved the applicant, the named insured, or any resident operator (unless covered by his/her own policy), while operating an automobile. A one hundred (100%) percent surcharge will be assessed, if a second accident occurs within the experience period, and meets the above criteria. 2. The applicable threshold limits determined by the accident date, as follows: $750 for accidents occurring before 7/1/1996; $850 for accidents occurring on or after 7/1/1996, but before 7/1/1999; $950 for accidents occurring on or after 7/1/1999, but before 7/1/2002; $1,050 for accidents occurring on or after 7/1/2002, but before 7/1/2005; $1,150 for accidents occurring on or after 7/1/2005, but before 7/1/2008; $1,350 for accidents occurring on or after 7/1/2008, but before 7/1/2011; $1450 for accidents occurring on or after 7/1/ The Experience Period shall be the three-year period between the date of the initial claim payment resulting from any one accident which meets the applicable dollar threshold, and the date of the application or preparation of the renewal. Pennsylvania Rates & Rules 13 Effective 9/1/2010

14 D. Circumstances under which surcharge(s) cannot be assessed: 1. No point(s) will be assessed for the payment of a claim arising from one or more accidents where the insured is not at fault in causing or contributing to the accident. 2. No point(s) shall be assessed for an accident, if the named insured demonstrates that the accident occurred under the following circumstances: (a) The motor vehicle was lawfully parked and was struck by another vehicle. If the parked vehicle rolled from the parked position, then the accident is charged to the person who parked the vehicle; (b) The named insured, or owner of the motor vehicle, has a judgment against a person who is responsible for the accident; (c) The motor vehicle is struck in the rear by another vehicle and the insured has not been convicted of a traffic violation in connection with the accident; (d) The driver of the other motor vehicle involved in the accident was convicted of a moving traffic violation and the insured was not convicted of a moving traffic violation in connection with the accident; (e) The motor vehicle driven by the insured is struck by a "hit-and-run" vehicle, if the accident is reported to the proper authority within 24 hours by the insured; (f) The accident involves damage by contact with animals or fowl. (g) The accident involves physical damage, limited to and caused by flying gravel, missiles, or falling objects. (h) The accident occurs when the insured is using the motor vehicle in response to an emergency if the insured was a paid or voluntary member of a police or fire department, first-aid squad, or a law enforcement agency at the time of the accident. This exception does not include an accident occurring after the motor vehicle ceases to be used in response to the emergency. (i) The insurer is reimbursed by or on behalf of the named insured or other resident operator for at least sixty (60%) percent of the total amount of the paid claim received through subrogation or from a settlement or judgment against the individual responsible for the accident. (j) The accident resulted in causing the insurer to pay a first party medical claim. 3. No premium surcharge will be assessed for the payment of a claim made under the comprehensive portion of the policy, unless the loss was intentionally caused by the insured. E. Inexperienced Operator A fifty percent (50%) surcharge will be assessed if the principal operator of the motor vehicle has no surcharge for an accident, but has been licensed less than three years. F. Refund of Surcharge Premium If a surcharge has been applied for an accident occurring while with Capitol Insurance Company and later it is determined that the accident falls under one of the exceptions in this rule, Capitol Insurance Company will refund the increased portion of the premium generated by the accident. G. Policy Period All policies are written on a semi-annual basis, and no policy may be written for a period longer than six (6) months. Pennsylvania Rates & Rules 14 Effective 9/1/2010

15 H. Surcharge Disclosure Factors Point Factor Two Points 1.40 Three Points 1.85 Four Points 3.00 At-Fault Accident Factor One At-Fault Accident (see C and D above) 1.40 Two At-Fault Accidents (see C and D above) 2.00 Other Surcharge Factors Inexperienced Operator Licensed Less Than 3 Years 1.50 I. Named Driver Exclusion 1. Any household members over the age of fourteen, who do not hold a valid drivers license for any reason, must be excluded from the policy. 2. You may NOT exclude a licensed spouse for any reason. 3. You may exclude other licensed operators from coverage, provided that you can prove other insurance in the form of a declaration page submitted with the original application. 4. If a driver is excluded due to a current license suspension, please provide the driver s license number and social security number. 5. To remove an exclusion, a completed ACORD Policy Change Request, signed by the first Named Insured, must be submitted. Pennsylvania Rates & Rules 15 Effective 9/1/2010

16 Rating Procedures CAPITOL INSURANCE COMPANY Single Car: Use surcharge factors, and driver classification of the operator which will develop the highest total premium. Multi-car: Assign all surcharge factors, and the driver classification which will develop the highest total premium to the highest rated vehicle. Assign the next highest rated driver classification to the next highest rated vehicle, and so on. Business Use Guidelines Eligible Risks: The vehicle must be individually owned by the Named Insured. It may be operated by the Named Insured or other family members, to and from work more than twenty miles round trip. Ineligible Risks: Pickups, vans, utility vehicles used for business purposes are unacceptable, with the exception of artisan vehicles used to carry tools and supplies between the insured s home and the job site. Vehicles used as taxi or for the delivery of persons or goods are unacceptable. The Business Occupational Use form must be completed and attached to each application. All Business and Occupational Usage must be fully documented on the application. Pleasure Use Guidelines A private passenger vehicle used exclusively for pleasure, or to and from work less than Twenty (20) miles round trip. Farm use is prohibited. Certified Risks - Financial Responsibility Factor The premium for bodily injury, property damage, and medical expense shall be increase 10% (multiplied by a 1.10 factor) for risks on which a certificate of insurance is filed to comply with the requirements of an automobile financial responsibility law. Pennsylvania Rates & Rules 16 Effective 9/1/2010

17 Direct Billing Procedures 1. A $35.00 (thirty-five dollar) non-refundable application fee will be assessed on new business. 2. An insured may elect to pay-in-full the six-month premium and fee, or elect to be billed in installments. 3. If the installment plan is desired for new business, select the monthly billing plan on the application. The down payment is the application fee plus either [25% (twenty-five percent) or 18% (eighteen percent) of the six-month premium] or [17% (seventeen percent) or 20% (twenty percent) of the six-month premium if the EFT option is selected]. The insured will be billed in four or five monthly installments for the balance of the premium, unless the EFT option is selected in which case they will be billed 5 monthly installments. The first installment is due 30 (thirty) days from the policy effective date. If the insured chooses 18% (eighteen percent) down payment, the first installment is due 15 (fifteen) days from the policy effective date. Additional installments will be due at thirty day intervals. 4. If the installment plan is desired for renewal business, the premium will be billed divided into six (6) monthly installments. The billing date is backed up 20 days, unless on the EFT plan. 5. There will be an $9.00 (nine dollar) charge per installment, or $6.00 (six dollar) charge per installment for the EFT plan, for either new or renewal business. 6. The insured may pay the policy balance at any time. Installments The first installment bill shall reflect the current premium due minus the deposit to arrive at an outstanding balance. Each installment bill should display the status of the account and is to be sent to the applicant every 30 days after the first installment until the outstanding balance is paid in full. The amount of each installment includes a portion of the outstanding premium balance plus other charges including installment fees, late charges, endorsement change charges, and the like. At any point during the installment billing period, should the policyholder elect to pay the outstanding balance, the service charge for the current bill would apply. Pennsylvania Rates & Rules 17 Effective 9/1/2010

18 Cancellations Cancellation at Request of Insured In the event the insured requests cancellation of the policy, Capitol Insurance Company will retain the earned premium for the time of coverage plus ten (10%) percent short rate, and return the balance to the insured, except in the following cases when the return premium will be computed pro rata: 1. If the insured has disposed of the automobile, provided the insured takes out a new policy with Capitol Insurance Company on another automobile to become effective within thirty (30) days of the date of cancellation, or 2. If the insured automobile is repossessed under terms of a financing agreement, or 3. If an automobile is canceled from a policy, the policy remaining in force on other automobiles; or if there remains in force in the name of the insured or spouse, if a resident of the same household, a concurrent automobile policy covering another automobile, or 4. If the insured enters into the armed forces of the United States of America, or 5. If the insured automobile is stolen or destroyed (total or constructive total loss) and cancellation is requested by the insured within thirty (30) days following the date the automobile is stolen or destroyed Cancellation by Capitol Insurance If the policy or binder has been in effect less than 60 days, and this policy is not a renewal, Capitol Insurance has the right to cancel the insurance by giving notice as required in the policy or binder if the insured: 1. Is not, or ceases to be, eligible or in good faith entitled to insurance, or 2. Has failed to comply with reasonable safety requirements, or 3. Has violated any of the terms or conditions upon the basis of which the insurance was issued, or 4. Fails to respond to at least two written requests for pertinent underwriting information which would have a direct bearing on the rating of the policy, or 5. Has failed to remedy defects in the application as requested by the company, or 6. Has failed to make his/her vehicle available for inspection of physical damage, within thirty (30) days of a request from Capitol Insurance to do so, at a time and a place convenient for the insured and the company or its representative appraiser. 7. Or any operator who usually drives the motor vehicle fails to obtain a Pennsylvania operator s license in accordance with the standards of the Pennsylvania Department of Transportation. Pennsylvania Rates & Rules 18 Effective 9/1/2010

19 All policies or binders may be cancelled by Capitol Insurance Company for one or more of the following specified reasons 1. Nonpayment of premium discovered less than 60 days after its due date. 2. The driver s license or motor vehicle registration of the named insured has been under suspension or revocation during the policy period; the applicability of this reason to one who either is a resident in the same household or who customarily operates an automobile insured under the policy shall be proper reason for excluding such individual from coverage under the policy but not for canceling the policy. 3. A determination that the insured has concealed a material fact, or has made a material allegation contrary to fact, or has made a misrepresentation of a material fact and that such concealment, allegation or misrepresentation was material to the acceptance of the risk by Capitol Insurance Company. Each cancellation initiated by Capitol Insurance Company will be on a pro rata basis, with the balance returned to the insured. In all cases, a copy of each cancellation notice, which will provide the reason for cancellation, will be furnished to the insured within 15 days (plus two days mail time) prior to the effective date of cancellation. If Capitol Insurance Company issues a cancellation notice for nonpayment of premium to the named insured, and the insured s payment received by the company subsequent to the issuance of such cancellation notice is justifiably dishonored by the financial institution, Capitol Insurance Company will terminate the policy on the effective date and time shown on the cancellation notice originally issued for nonpayment of premium. Cancellations issued will be effective on the date specified and coverage will cease on such date. Nothing herein will be deemed to affect the Capitol Insurance Company s right to rescind a policy for fraud or misrepresentation on policies in effect less than 60 days, or to invoke other remedies as provided by law. A policy in effect for 60 days or more may only be rescinded if there was an intentional material misrepresentation by the insured, where such misrepresentation could not have reasonably been discovered by the insurer in less than 60 days, and the undisclosed information would have prompted the insurer to refuse acceptance of the risk. Rewrites and Reinstatements Reinstatements and re-writes are offered at the discretion of Capitol Insurance Company. Please contact the Underwriting Department prior to offering a reinstatement or rewrite to any insured. Pennsylvania Rates & Rules 19 Effective 9/1/2010

20 RATING RULES: CAPITOL INSURANCE COMPANY Coverages Extra- Rating Steps Calculate Bodily Lessor Medical Income Accdntl. Funeral ordinary Factor Injury Liab Expense Loss Death Expense Medical UMBI UIMBI Territory Rate - Full Tort Limited Tort Adj. x x x x x x x x x x Tier Rating x x x Stacked/Multi Vehicle + + Increased Limits Factors or $s x x x x +$ +$ + +$ +$ Driver Class x x x Passive Restraint Factor 1-disc.% x x x x x Business Use Factor 1+surch.% x x x x x x x x Financial Responsibility Factor x x MVDI Discount Factor 1-disc.% x x x x x x x x x SDP Factors, apply separately x x x Multicar Factor 1-disc.% x Prior Insurance Credit +% Renewal Credit +% Pay-in-Full Credit +% Credit Factor 1-sum% x x x x x x x x x Expense Constant mo Term Factor 0.5 x x x x x x x x x Note: Dollar round after each multiplication step. Pennsylvania Rates & Rules 20 Effective 9/1/2010

21 RATING RULES (continued): Coverages Rating Steps Calculate Property Compre- Factor Damage hensive Collision Rental Territory Rate Tier Rating x x x Model Year Relativities x Vehicle Symbols x MY/Symbol Factor 2 decimals x x Increased Limits Factors or x Deductibles x x Driver Class x x x Business Use Factor 1+surch.% x x x x Financial Responsibility x Antitheft Discount Factor 1-disc.% x MVDI Discount Factor 1-disc.% x x x x SDP Factors, apply x x x Multicar Factor 1-disc.% x Prior Insurance Credit +% Renewal Credit +% Pay-in-Full Credit +% Credit Factor 1-sum% x x x x Expense Constant mo Term Factor 0.5 x x x x Note: Dollar round after each multiplication step. Pennsylvania Rates & Rules 21 Effective 9/1/2010

22 TIER RATING Based on underwriting criteria which has been established, all insureds will be assigned a risk factor which will put them in a unique tier. Determine the tier rating factor in the following table. Individually multiply the premium for bodily injury, property damage, medical expense, work loss, comprehensive and collision by the tier rating factor and dollar round the result. apply to new business after 9/1/ a. Tiers are assigned using mutually exclusive underwriting characteristics. b. Tier rating will not be used in a duplicative manner with the SDIP, Classification or any other rating characteristic, and c. When a policy tier assignment is being changed after initially being assigned for new business, it can only be changed to a lower rated tier. FULL TORT BASE RATES, BY TERRITORY, ARE PUBLISHED ON PAGE Bodily Injury Limits Premium per car factor (Percentage of $15,000/30,000 Bodily Injury Rates shown on page 21) $15,000/30, % (Base Rate) $25,000/50, % $50,000/100, % $100,000/300, % Calculate Limited Tort rate by Multiplying Full Tort Rate by.600 For increased limits, multiply base rate by percentage indicated. 2. Property Damage Limits Premium per car factor (Page 21) $ 5, % (Base Rate) $10, % $25, % $50, % For increased limits, multiply base rate by percentage indicated. 2a. Lessor Liability (100/300/50) Premium per car factor (base rates on page 21) Primary BI/PD Limit $15,000/30,000/5, % (Base Rate) $25,000/50,000/10,000 64% $50,000/100,000/25,000 29% $100,000/300,000/50,000 NA Calculate Limited Tort rate by Multiplying Full Tort Rate by First Party Benefits Premium per car factor (Page 21) A. Medical Benefits Aggregate Limit $ 5, % (Base Rate) $10, % $25, % $50, % $100, % Calculate Limited Tort rate by Multiplying Full Tort Rate by.600 For increased limits, multiply base rate by percentage indicated. Pennsylvania Rates & Rules 22 Effective 9/1/2010

23 B. Income Loss Benefit Monthly/Aggregate Limit (refer to page 21). $ 1,000/5,000 Annual Full Tort Base Rate $ 1,000/15, % $ 1,500/25, % $ 2,500/50, % Calculate Limited Tort rate by Multiplying Full Tort Rate by.600 For increased limits, multiply base rate by percentage indicated. C. Funeral Expense Benefits Limit Annual Full Tort Base Rate Per Car $ 1,500 $ 2.00 $ 2,500 $ 4.00 Calculate Limited Tort rate by Multiplying Full Tort Base Rate by.600 D. Accidental Death Benefits Limit Annual Full Tort Base Rate Per Car $ 5,000 $ 4.00 $15,000 $ $25,000 $ Calculate Limited Tort rate by Multiplying Full Tort Base Rate by.600 E. Combination First Party Benefits Coverage Premium Per Car Percentage of Basic First Party Benefit. (Multiply Medical Benefit Base Rate by multiplier, then multiply Income Loss Benefit Base Rate by Multiplier, and then add results together for premium. Base rates shown on Rate Schedules. Total Funeral Accidental Multiplier Benefit Expense Death Limit Benefit Benefit $177,500 $ 2,500 $25, % Calculate Limited Tort rate by Multiplying Full Tort Base Rate by.600 Total Benefit Limit is the total Coverage afforded when Combination First Party Benefits apply. F. Extra Ordinary Medical Expense Benefits See rates on page 25. 4a. Uninsured and Underinsured Coverages: See rates on pages 23 & 24. 4b. Rental Reimbursement Coverage Option Annual Base Rate Per Car Basic $ Plus $ Pennsylvania Rates & Rules 23 Effective 9/10/2010

24 5. Physical Damage Rating Factors A. The model year of the automobile is the year assigned by the manufacturer. Model Year Comp. Coll If the rates for a model year are not displayed on the rate schedule, determine the base rates shown for the latest model year (2010), then multiply by 1.05 for each succeeding model year. Comp and Collision not available on automobiles older than ten (10) model years. B. Vehicle symbol factors. ISO symbols are used for rating purposes. For 2010 and Prior Model Years Symbol Comp. Coll. Symbol Comp. Coll (a) (b) (a) Add 0.74 to symbol 26 relativity for each $10,000 or fraction of $10,000 above $ (b) Add 0.35 to symbol 26 relativity for each $10,000 or fraction of $10,000 above $ Pennsylvania Rates & Rules 23 Effective 9/1/2010

25 2011 & Subsequent Model Years Symbol Comp Coll Symbol Comp Coll (a) (b) (a)add 0.74 to symbol 70 relativity for each $10,000 or fraction of $10,000 above $150,000. (b)add 0.35 to symbol 70 relativity for each $10,000 or fraction of $10,000 above $150,000. Pennsylvania Rates & Rules 24 Effective 9/1/2010

26 C. Deductible Deductible Comp. Coll , Driver Classification Rating Factors Class Liability Phys.Dam. 1A AF B C A AF B BF C CF A AF B BF C CF F Pennsylvania Rates & Rules 25 Effective 9/1/2010

27 Annual Full Tort Base Rates 1,000/5,000 15/30 100/300/50 5,000 Income Territory BI Lessor Med.Exp. Loss Expense Constant Pennsylvania Rates & Rules 26 Effective 9/1/2010

28 Annual Base Rates Model Year 2009 Symbol 11 5, Ded 500 Ded Territory PD Comp Coll , Expense Constant Pennsylvania Rates & Rules 27 Effective 9/1/2010

29 Uninsured and Underinsured Motorist Bodily Injury Base Rates Uninsured and Underinsured Motorist Bodily Injury Base Rates Revised 12-Month Base Rates Tort Single/ Territories Limit/Coverage Type Multi Car 1,14 41,42 All Other Uninsured Motorist - Stacked Coverage $15,000/$30,000 Full Single $447 $126 $34 Multi $531 $154 $40 Limited Single $268 $76 $20 Multi $319 $92 $24 Uninsured Motorist - Non-Stacked Coverage $15,000/$30,000 Full Single $447 $126 $34 Multi $358 $104 $26 Limited Single $268 $76 $20 Multi $215 $62 $16 Underinsured Motorist - Stacked Coverage $15,000/$30,000 Full Single $118 $66 $35 Multi $174 $100 $56 Limited Single $71 $40 $21 Multi $104 $60 $34 Underinsured Motorist - Non-Stacked Coverage $15,000/$30,000 Full Single $118 $66 $35 Multi $99 $53 $26 Limited Single $71 $40 $21 Multi $59 $32 $16 Pennsylvania Rates & Rules 28 Effective 9/1/2010

30 Uninsured and Underinsured Motorist Bodily Injury Increased Limits Stacked vs 12-Month Rates Territories Tort/Coverage Non-Stacked Limits 1,14 41,42 All Other Full Tort Add'l Premium for Higher Limit Uninsured Motorist Stacked 25/50 $116 $45 $14 50/100 $268 $104 $20 100/300 $547 $209 $34 Non-Stacked 25/50 $84 $33 $6 50/100 $195 $76 $14 100/300 $400 $154 $34 Underinsured Motorist Stacked 25/50 $150 $47 $11 50/100 $380 $109 $15 100/300 $814 $228 $35 Non-Stacked 25/50 $112 $33 $5 50/100 $273 $80 $11 100/300 $590 $166 $26 Limited Tort Add'l Premium for Higher Limit Uninsured Motorist Stacked 25/50 $70 $27 $8 50/100 $161 $62 $12 100/300 $328 $125 $20 Non-Stacked 25/50 $50 $20 $4 50/100 $117 $46 $8 100/300 $240 $92 $20 Underinsured Motorist Stacked 25/50 $90 $28 $7 50/100 $228 $65 $9 100/300 $488 $137 $21 Non-Stacked 25/50 $67 $20 $3 50/100 $164 $48 $7 100/300 $354 $100 $16 Pennsylvania Rates & Rules 35 Effective 9/1/2010

31 EXTRAORDINARY MEDICAL BENEFITS COVERAGE Annual Full Tort Base Rate Single Multi Limit Car Cars 100, , , ,000, Pennsylvania Rates & Rules 30 Effective 9/1/2010

32 Pennsylvania Rates & Rules 31 Effective 9/1/2010 RATING TERRITORIES Zip Terr Zip Terr Zip Terr Zip Terr

33 Pennsylvania Rates & Rules 35 Effective 9/1/

34 Pennsylvania Rates & Rules 35 Effective 9/1/ ,