CONEMAUGH VALLEY MUTUAL INSURANCE COMPANY JOHNSTOWN, PENNSYLVANIA STANDARD HOMEOWNERS ML-1, 2, 3, TENANT ML-4 & PREFERRED ML-5 PROGRAMS

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1 CONEMAUGH VALLEY MUTUAL INSURANCE COMPANY JOHNSTOWN, PENNSYLVANIA STANDARD HOMEOWNERS ML-1, 2, 3, TENANT ML-4 & PREFERRED ML-5 PROGRAMS

2 CONEMAUGH VALLEY MUTUAL INSURANCE COMPANY HOMEOWNERS UNDERWRITING RULES AND GUIDELINES I. UNDERWRITING RULES A. BINDING AUTHORITY OF AGENTS Homes that have been reviewed by agents of CVMIC and that do not fall under the list of either Unacceptable Exposures or that fall under the list of Exposures Requiring Prior Underwriting Approval may have coverage bound for the following maximum limits. Any limits exceeding these maximums must be submitted to the company on a Prior Company Approval basis. Replacement Cost Coverage Coverage A. Up to $300,000 Coverage C. Up to $225,000 Personal Liability Limit Up to $500,000 Medical Payments Limit Up to $5000/ $25,000 Actual Cash Value (ACV) Coverage Coverage A. Up to $ 150,000 Coverage C. Up to $ 125,000 Liability and Medical Payments Same as Replacement Cost B. PROPERTIES REQUIRING PRIOR COMPANY APPROVAL BEFORE BINDING COVERAGE The following situations require underwriting review before binding coverage to so that disputes with regard to pricing or coverage acceptability can be avoided. Without prior company approval the following may not be bound. 1. Homes or Prospective Insured s having been cancelled or non-renewed by another company or by CVMIC during the past 5 years. 2. Homes that are or will be unoccupied for extended periods exceeding 3 months. 3. Homes that are currently for sale and are actively listed by the insured or by real estate agents. 4. Homes that have more than one boarder in residence. 5. Homes having horse exposures or farming operations being conducted on the insured premises. 6. Homes where there has been a lapse in coverage for any period of time. 7. Homes where the insured is known to have poor premium payment history or coverage lapses. 8. Homes under construction may be written under the Standard program providing that the home will be completed and occupied by the Insured within 120 days of the original application. During the construction phase no discounts of any kind will be granted. ED. 5/01/13 1

3 C. UNACCEPTABLE EXPOSURES The following homeowners exposures are unacceptable to the company. The company underwriting staff will not permit homeowners coverage for these kind of exposures. 1. Homes that are vacant; 2. Homes having substandard maintenance The company makes a practice of conducting safety inspections on selected new business periodically on renewals. Elements of substandard maintenance can be readily observed. Some of the common items indicating that the home will not meet the company s underwriting standards are the following. a. Poor housekeeping both exterior and interior look for the presence of trash and junk lying around the property; b. The presence of any homemade wood burning stoves or furnaces; c. Deteriorated roof condition watch for buildup of moss, curled or missing roof shingles evidence of extensive roof patching; d. Evidence of electrical system problems uncovered breaker boxes or junction boxes, use of extension cords, temporary wiring, over fusing, outdated or inadequate wiring and service; e. Evidence of plumbing problems water damage to floors, ceilings and walls, outdated plumbing fixtures, evidence of incomplete plumbing repairs; f. Liability hazards lack of handrails, broken or rotted porch floorboards, torn carpeting, broken chimneys, raised sidewalks and insecure television antennas. 3. Homes with unfenced in-ground pools Pennsylvania State law requires that all inground pools have adequate fences with self-closing locking gates. Building Code requires a high degree of care on the part of in-ground pool owners. The exposure to small children makes an unfenced in-ground pool an uninsurable hazard. 4. Pools with diving boards. 5. Dog Breed and Disposition No insured will readily admit that their dog may be a hazard, however a sizable percentage of homeowners loss dollars are paid for dog bites. Any aggressive dogs must be noted on the application along with the breed of any dogs owned by the insured. The following breeds are known to be aggressive. These breeds will be considered only in rare circumstances: a. Rottweiler b. Pit Bull c. Doberman d. Siberian Husky e. German Shepard f. Chow g. Akita Any dog can be aggressive and the training and discipline exercised by the owner is a factor as important as the breed of the dog. CVMIC inspectors are required to note on reports any aggressive behavior exhibited by dogs without regard to the breed. The company reserves the right to decline or non-renew policies where aggressive dogs have been reported. The company requires signed dog exclusion, excluding claims arising out of the ownership, care, or control of dogs in the household if the Underwriter makes an exception with regard to dog breeds and disposition. ED. 5/1/08 2

4 6. Horses, Cattle and Large Animals whenever there are large farm animals located at the insured premises, special underwriting consideration must be made. The condition of fences, the proximity of animals to traveled roadways, and the knowledge and experience of the owners in caring for and handling these animals are all factors to consider when underwriting the exposures. Our underwriters will need additional information with regard to these items in order to grant binding authority. If the exposure more than a minor one the account will be referred to our commercial farm owners underwriting unit for consideration under the farm program. 7. Homes where the insured is known to have poor financial Management- Bankruptcy within the prior 5 years. 8. Submissions where the application information is not complete. II. UNDERWRITING GUIDELINES CVMIC is able to insure a wide range of homes under its preferred, standard and non-standard programs. The company uses URB policy forms and has developed these underwriting guidelines to assist its agents in selecting both the pricing track and the coverage program best suited for those homes that fall into the acceptable risk range. The company s underwriting knowledge of the Pennsylvania marketing region combined with attractive pricing and superior levels of policy and claims service makes CVMIC the right choice for homeowners insurance. ACORD POLICY APPLICATIONS CVMIC exclusively uses the ACORD application format for all Homeowners submissions. The use of the ACORD format is an industry standard that will prepare the way for the day when we will be able to accept application transactions on line. We require a fully completed ACORD application that is signed both by the prospective insured and by the licensed agent. We will be unable to process or bind coverage where the application is unsigned or the information is not completed. Incomplete applications received without full information will be returned as unbound coverage. REPLACEMENT COST AND ACV OPTIONS CVMIC offers both Replacement Cost and Actual Cash Value Options under its Standard Program. Certain homes with relatively low Coverage A values may be accommodated under the ACV program. It is important to note that low valued properties must be correctly evaluated for both their condition and coverage amounts. A current edition cost estimator will develop the replacement cost estimate and must be completed. A depreciation table is used to develop an appropriate ACV amount. Homes that are more than 35 years of age but are otherwise in good condition must have had the following renovations in order to be considered for Replacement Cost Coverage. 1. Roof Covering Replacement within the past 15 years; 2. Electrical System updated with a modern breaker system and a minimum 100 amp service within the past 30 years; 3. Heating system substantially renovated or replaced within the past 25 years; 4. Plumbing system updates with PVC or copper pipes within the past 35 years. *Note: Presence of any galvanized water pipes will require ACV coverage.* Replacement Cost Coverage is not generally available for homes built before ED. 5/1/08 3

5 Homes that have not met these minimum update requirements will be considered only for Actual Cash Value (ACV) coverage. Use CVMIC Renovated Home Questionnaire RHQ to qualify older homes for replacement cost coverage and the appropriate updated credits applicable under the Standard Homeowners Program. Whenever the home qualifies for Replacement Cost Coverage CVMIC requires that homes be insured for at least 90% of Replacement Cost for the Preferred Program and at least 80% of Replacement Cost for the Standard Program. For Actual Cash Value Policies insured under the Standard Homeowners Program, these homes should be insured for at least 80% of the Actual Cash Value amount as determined by use of the Depreciation Table on the Square Foot Cost Estimator Worksheet. Coverage for lesser amounts may be insured under the Dwelling Fire Insurance Program when the physical risk characteristics are acceptable. RURAL PROPERTIES the Pennsylvania market region includes a significant rural population. Insuring homes in rural areas presents some unique exposures in addition to those usual to homes insured in suburban or urban areas. The presence of farm animals, farm structures and part time business ventures operating from the home may make other forms of insurance coverage necessary. Our underwriters will be happy to assist you in determining if homeowner s coverage is appropriate or if the account needs to be insured under the Farm Program or with a supplemental commercial policy. With many small farms now having been converted to residential property, the existence of farm barns and structures beyond the normal appurtenant structure is a real possibility. CVMIC has developed a form that excludes coverage for such farm barns to make it clear that the homeowner s policy do not cover such farm barns and structures under Coverage B of the Homeowners Policy. Separate fire insurance policies can be purchased to provide coverage for farm barns and structures that are in insurable condition. TRAMPOLINES the injury potential that exists because of the popular trampoline is uninsurable. CVMIC uses the Trampoline Exclusion on all of its homeowner s policies. Please advise all of your clients that the Pennsylvania homeowner policy will not respond to claims arising out of the presence or use of trampolines. SOLID FUEL HEATING SYSTEMS many homes in the Pennsylvania Marketing region use solid fuel (wood or coal) supplemental heating systems. CVMIC has successfully underwritten this additional exposure by use of inspections and the Pennsylvania Check List for a Safe Wood Stove Installation. The homeowner product may be used where solid fuel heating systems provide the primary or sole source of heat in the home when the policy is written using the ML-1R form with an ACV valuation. The preferred product may only be written where there are properly installed wood pellet stoves or wood burning fireplaces as supplemental solid fuel heat sources. For all solid fuel heating proper installation and ongoing maintenance are critical both for life safety and for property preservation. INDIVIDUAL EXPOSURES this underwriting guideline is produced to assist agents in determining how the company views common issues and exposures related to the homeowner s line of business. An underwriting guideline is not an exhaustive list of every possible issue or situation that arises. If you have any questions or you perceive that an exposure may create a problem please call our underwriting department for some dialogue and assistance. ED. 5/1/08 4

6 CONEMAUGH VALLEY MUTUAL INSURANCE COMPANY SPECIAL DAY CARE HOMEOWNERS PROGRAM UNDERWRITING: Minimum $250 Deductible. Coverage A - Minimum Actual Cash Value - $35,000. Coverage A - Minimum Replacement Cost - $75,000. (must be 80% to value) Coverage C - Replacement Cost Contents available at l5% surcharge. Central Heating System - No wood stoves, pellet stoves, space or kerosene heaters. Roof must be under years old with no obvious defects. Plumbing must be updated in last years, and/or copper or plastic in good repair. Electric must have circuit breakers, ground fault interrupters in kitchens and baths. One family dwellings only. Maximum age limit of dwelling not to exceed 60 years. Maximum limit of liability - $300,000. Insured must be a licensed operator with the State of Pennsylvania. Insured must be a licensed Child Day Care Provider, licensed by the State of Pennsylvania. Professional Day Care Liability must be in place and written by an admitted carrier rated A+ or better. Proof of coverage must be submitted with application. Limits for Day Care Professional liability must not be lower than the Homeowners Liability limit. Exposures Requiring Prior Underwriting Approval: Play Ground Equipment All risks with any types of playground equipment exposures must be referred to the Company for prior underwriting approval. Unacceptable Exposures: Swimming Pools All risks with swimming pool exposures.

7 INDEX DESCRIPTION RULE NO. PAGE Basic Policy Coverage and Limits 2 2 Eligibility 1 1 General Rules 3-a to 3-i 3 Mandatory Forms 2 2 Optional Section I- Coverages 5-a to 5-ii 5-9 and Endorsements - Description Optional Section II - Coverages 6-a to 6-p 9-13 and Endorsements - Description Premium Section - Property Coverages 5-a to 5-ii Premium Section - Liability Coverages 6-a to 6-p Premium Tables Section I-Other Credits and Surcharges 7-a to 7-c 14 Section II-Other Credits and Surcharges 7-a to 7-c 27 Rating 4 4 Rating Definitions 4-a to 4-j 4-5 Territorial Zones and Premium Group Charts

8 HOMEOWNERS POLICY PROGRAM Rule No. 1. ELIGIBILITY: The Homeowners Policy Program contains rules, classifications, rates and premiums for writing property and liability insurance for: a. the owner-occupant of a dwelling used only for private residential purposes; b. a tenant (non-owner) of a dwelling, apartment, or the owner of a Condominium Unit if the residence occupied by the insured is used for residential purposes; c. co-owners, provided each occupies separate apartments within the dwelling. A tenant policy may be issued to the other co-owner; d. covering the interests of the intended owner-occupant of a dwelling under construction; e. covering a seasonal dwelling (seasonal occupancy shall be so identified on the Declarations Page); f. covering non-owner occupied condominium units used exclusively for residential purposes when there is a rental manager/agent on premises 12 months in each year; or g. modular homes installed on permanent foundations. h. manufactured double-wide mobile homes of less than 15 years of age and having a minimum Coverage A value of $60,000 may be written under that Standard Program when such homes are set on a *permanent foundation. i. A residence held in trust when one of the insureds is both a grantor (settlor or trustor) and a resident of the insured premises. None of the trustees can be a partnership, joint venture, corporation, limited liability company or other organization. In addition, none of the trustees can be a licensed professional who administers trusts, unless that trustee is a relative of the grantor (settlor or trustor) A policy may be issued only when the main residence insured: a. is used exclusively for residential purposes (except for those incidental occupancies permitted by this manual and which have been declared and the appropriate premium charge made); and b. contains no more than two families with no more than two roomers or boarders per family. Ineligible Risks: a. Manufactured homes, trailer homes or house trailers whether or not set on foundations; (See eligibility h above for double wide homes. Permanent foundation means a foundation slab of at least 4 inches thickness with support piers extending below frost line with fully enclosed skirting or masonry footers extending below frost line with masonry foundation walls extending at least 12 inches above ground level. b. Property to which farm forms or rates apply. ED. 4/2017 1

9 Optional property and liability endorsements or coverages are made available in the following manual sections: OPTIONAL PROPERTY & LIABILITY COVERAGES & ENDORSEMENTS 2. BASIC POLICY COVERAGE AND LIMITS: The homeowner s policy provides coverage and minimum limits of liability as follows: Section I Coverages Form Form Form Form Form ML-8 ML-1 ML-2 ML-3 ML-4 ML-5 A. Residence Not 35,000 35,000 60, ,000 Available B. Private 10% of 10% of 10% of % of Structures amount on amount on amount on amount on Residence Residence Residence Residence C. Personal 50% of 50% of 50% of 10,000 70% of Property amount on amount on amount on amount on Residence Residence Residence Residence D. Additional 10% of 20% of 20% of 40% of 20% of Living amount on amount on amount on amount on amount on Expense & Residence Residence Residence Personal Residence Loss of Rent Property The following peril forms are available: ML-1 ML-2 ML-3 ML-4 ML-5 Standard Form Broad Form Special Form Tenants Form Superior Form See forms for causes of loss that apply. Premiums for all forms are shown in the Homeowners Premium Table. Section II Coverage s L. Personal Liability (ML-9) $100,000 Each Occurrence M. Medical Payments $1000 Each Person MANDATORY FORMS - The following forms are mandatory: Section I - ML-20, Causes of Loss (ML-1, 2, 3, 4 or 5). Section II - ML-9, ML-52A (if liability is included). ED. 4/2017 2

10 3. GENERAL RULES: 3-a CANCELLATION - If insurance is cancelled or reduced at the request of the insured, the earned premium shall be computed on a pro-rata basis. Cancellation is based upon the parameters defined in PA Title 40 P. S (a) (9). 3-b CONTRIBUTING INSURANCE - (ML-178) Coverage may be divided between two or more companies using the rates, rules, forms and endorsements of this manual. 3-c CONTINUOUS POLICIES - Conemaugh Valley Mutual writes continuous policies with annual terms being rated with rates in effect at the time of the beginning of each annual policy period. 3-d INTERPOLATION - To determine the premium for an amount of insurance between two amounts shown in the premium table, add the pro-rata premium for the difference between the nearest amounts shown to the premium for the lower amount. 3-e MAXIMUM & MINIMUM CHARGES - No additional premium shall be charged and no return premium shall be allowed when such additional or return premium is less than $5.00. Minimum Earned and Retained Premium Policy Fee - $ f RATE REVISIONS - When the company announces a rate revision the revised rates shall apply to each new and renewal policy and all binders having inception dates or policy rating terms on or after the effective date(s) of the rate revision. Endorsements shall be rated with the rates in effect for the policy term to which such endorsement applies. 3-g RESTRICTION OF INDIVIDUAL POLICIES - The policyholder may request a restriction of the policy at no reduction in the premium. The request, bearing the signature of the applicant, shall be referred to the Company. 3-i WHOLE DOLLAR PREMIUM - The premium for each exposure shall be rounded to the nearest dollar, separately for each coverage provided by the policy. A premium involving 50 cents or more shall be rounded to the next higher dollar. ED. 5/1/08 3

11 4. RATING : All premiums in this manual are ANNUAL per $1,000 of insurance unless otherwise specified. The basic policy premiums are for property and liability coverages for exposures arising from the residence and the personal liability of an insured. PROPERTY & LIABILITY COVERAGES : 4-a-1 4-a-2 4-a-3 4-a-4 4-a-5 Determine the basic policy premium based upon the amount of Coverage A or C. This basic premium shall reflect revised amount of Coverage C. Use the Policy Amount Factor Table multiplied by the Appropriate Premium shown in the Zone Premium Base Table for either Coverage A or Coverage C. Apply applicable zone factor. Apply deductible debits or credits. Modify the amount in 4-a-2 by premium credits or charges - Section I - Property Coverages. Add premiums for increased liability limits and optional liability coverages. 4-b Add any premiums for other coverages that are written with this policy. 4-c Total premium is determined by adding the amounts calculated in 4-a & 4-b. CONSTRUCTION : 4-d FRAME - A building shall be classified as frame when the wall area of frame, metal-sheathed or stucco construction exceeds 33 1/3% of the total exterior wall area. 4-e MASONRY - A building shall be classified as masonry when more than 66 2/3% of the exterior wall area is of masonry or masonry veneered construction. PROTECTION : 4-f PROTECTED - Building is located within 1,000 feet of an approved fire hydrant and is within 5 road miles of a responding fire department. 4-g SEMI-PROTECTED - Building is located more than 1,000 feet of an approved fire hydrant and is within 5 road miles of a responding fire department. 4-h UNPROTECTED -All others. ED. 5/1/08 4

12 RESIDENCE REPLACEMENT COST / ACTUAL CASH VALUE PROVISIONS : 4-i REPLACEMENT COST - Replacement cost premiums are to be used when the residence is insured for at least 80% of the replacement cost. Losses will be settled according to the replacement cost provision. The replacement cost option is available for well-maintained dwellings of modern design and construction. 4-j ACTUAL CASH VALUE - The actual cash value premiums are to be used when the residence is insured for less than 80% of the replacement cost. Losses will be settled on an actual cash value basis including deduction for depreciation. The company generally will require the use of the ACV option for dwellings constructed before 1940 or other dwellings that are not updated to modern standards. NOTE: ML-13 may be added to actual cash value policies. 5. OPTIONAL SECTION I - COVERAGES & ENDORSEMENTS: 5-a ADDITIONAL LIVING EXPENSE - Enter total amount of coverage on policy face. Coverage in excess of the amount provided shall be charged at the premiums shown in the Premium Section of the manual. 5-b AMENDMENT OF POLICY CONDITIONS (ML-83) This form is a reinstatement of the original cancellation on notice of payment dishonor. 5-c BUILDING ADDITIONS AND ALTERATIONS (ML-4)-(ML-51) Coverage in excess of the amount provided shall be charged at the premium shown in the Premium Section. 5-d CONDOMINIUMS AND SHARED OWNERSHIP HOUSING - (ML-15) This form is intended to offer choices of building orientated coverage under forms ML-2, ML-3 or ML-5 for condominium unit owners. 5-e CONDOMINIUM UNIT-OWNERS SUPPLEMENTAL COVERAGES: 5-e-1 5-e-2 GLASS BREAKAGE - (ML-37) Coverage may be provided for breakage of window and door plates that are part of the Unit-Owners portion of the building at the premiums shown in the Premium Section of the manual. LOSS ASSESSMENT COVERAGE - (ML-35) The policy may be extended to cover loss assessment for which the insured may be liable to the association of Condominium Unit-Owners, at the additional premiums shown in the Premium Section of the manual. Earthquake coverage (ML-35A) may be added to policies issued under this rule at the earthquake rates shown in the Premium Section of the manual. ED. 5/1/08 5

13 5-e-3 RELATED PRIVATE STRUCTURES AND CONDOMINIUM FIXTURES - (ML-34) The policy may be extended to cover private structures owned solely by the insured and located on the described premises at the additional premiums shown in the Premium Section of the manual. The policy may also be extended to cover Unit-Owners Additions and Alterations that are outside the finished interior surfaces of the perimeter walls, at the premiums shown in the Premium Section of the manual. 5-e-4 CONDOMINIUM UNIT OWNER-ADDITIONS SPECIAL COVERAGE - (ML-32) Coverage may be provided against covered causes of loss except as excluded or limited, at the premiums shown in the Premium Section of the manual. 5-e-5 UNIT-OWNERS ADDITIONS AND ALTERATIONS - (ML-31) The amount of insurance may be increased at the premiums shown in the Premium Section of the manual. 5-e-6 UNIT-OWNERS RENTAL TO OTHERS - (ML-33) The policy may be extended to cover personal property while the premises are rented to others at the additional premium shown in the Premium Section of the manual. 5-f COVERAGES - OTHER PROGRAMS - It is permissible to attach any filed form offering supplemental coverage not included in this section. The appropriate rates are to be used. 5-g CREDIT CARD, FORGERY AND COUNTERFEIT MONEY - (ML-57) Coverage for Credit Card, Forgery and Counterfeit Money may be increased at the premiums shown in the Premium Section of the manual. 5-i DEBRIS REMOVAL EXTENSIONS - (ML-366) Coverage may be extended at the premium shown in the Premium Section of the manual. 5-j DEDUCTIBLES - Forms used in conjunction with the premiums shown in this manual contemplate a five hundred dollar ($500) All Causes of Loss Deductible Clause applying per occurrence on forms 1,2,3 &5 and two-hundred fifty dollar ($250) for form 4. This deductible can be increased or reduced by applying the rate credits or surcharges as shown in the Premium Section of the manual. 5-l EARTHQUAKE - (ML-54), (ML-35A) Earthquake coverage may be written at the premiums shown in the Premium Section of the manual. Please include increased Coverage B or C when calculating premium. ED. 5/01/08 6

14 5-m GLASS COVERAGE - [Not Applicable to ML-4] -(ML-68) Coverage may be provided for specific items of glass using the rules and rates filed for the Company. 5-n HIGHER LIMIT OF LIABILITY ON CERTAIN PROPERTY - (ML-65H) Certain properties that are subject to limitations may be increased at the premiums shown in the Premium Section of the manual. 5-o HOMEOWNERS ASSOCIATION LOSS ASSESSMENT COVERAGE - (ML-50) The policy may be extended to cover loss assessments charged by the association of homeowners, at the additional premiums shown in the Premium Section of the manual. Earthquake coverage may be added to policies issued under this rule at the earthquake rates shown in the Premium Section of the manual. (ML-53) 5-p HOMEOWNERS INCREASED COVERAGE; (ML-147) HOMEOWNERS PLUS COVERAGE; no liability increase (ML-150A) Coverage may be written for these forms at the additional premiums shown in the Premium Section of the manual. 5-q HURRICANE RESISTANT GLASS - (ML-166) A premium credit may be allowed for hurricane resistant glass as shown in the Premium Section of the manual. 5-r INCREASED AMOUNT OF COVERAGE C - 5-r-1 INCREASED AMOUNT OF INSURANCE - The Coverage C amount of insurance may be increased at the premiums shown in the Premium Section of the manual. 5-r-2 INCREASED AMOUNT OF INSURANCE AWAY FROM PREMISES - (ML-66) The Coverage C amount of insurance for personal property away from premises may be increased at the additional premiums shown in the Premium Section of the manual. 5-s INFLATION GUARD COVERAGE - (ML-243) - [Not applicable to ML-4] Amounts of insurance may be automatically increased for Coverages A, B, C and D on a quarterly basis. Refer to the charges shown in the Premium Section of the manual. ED. 5/1/08 7

15 5-t IDENTITY FRAUD-(ML-189)-MANDATORY FORM FOR ML-1, 2, 3, & 5 Endorsement provides coverage for necessary expenses incurred as a direct result of identity fraud involving a person or property. Available limit of $10,000 (applies only to insured s primary residence policy.) 5-u NEW HOME DISCOUNT - New home discounts are applied to qualified homes at the rate credits shown in the Premium Section of the manual. 5-w OUTSIDE ANTENNA - (ML-49) Increased amount of insurance may be written on outside antennas at the premiums shown in the Premium Section of the manual. 5-x PHYSICIANS, SURGEONS, DENTISTS AND VETERINARIANS - (ML-69) Increased amounts of insurance on Physicians, Surgeons, Dentists and Veterinarians property may be written at the premiums shown in the Premium Section of the manual. 5-y PRIVATE STRUCTURES - 5-y-1 INCREASED LIMITS - (ML-48) or (ML-89) Increased amounts of insurance may be written on a specific private structure at the premiums shown in the Premium Section of the manual. 5-y-2 RENTED TO OTHERS - (ML-40) or (ML-89) Coverage may be written on a specific private structure held for rental at the premiums shown in the Premium Section of the manual. 5-z PROTECTIVE DEVICE CREDIT - (ML-216) Premium credits may be allowed for the installation of approved and properly maintained alarm and/or sprinkler systems in a residence as shown in the Premium Section of the manual. 5-aa REDUCED AMOUNT ON COVERAGE C - The amount of insurance for Coverage C may not be reduced by policyholder to less than 40% of the amount of insurance for Coverage A at the credit shown in the Premium Section of the manual, excepting condominiums rented to others. ED. 3/1/13 8

16 5-bb REPLACEMENT VALUE - PERSONAL PROPERTY - (ML-55) Personal property may be insured for replacement value at the charges shown in the Premium Section of the manual. 5-cc RESIDENCE RENTAL THEFT (ML-58) Coverage for theft while the premises is rented to others may be added at the additional premium shown in the Premium Section of the manual. 5-dd STORM EXTENDER ENDORSEMENT- (ML-79) Coverage may be provided at the additional premium shown in the Premium Section of the manual. 5-ee THEFT OF BUILDING MATERIALS - (ML-17) Coverage may be provided for loss or damage caused by theft or attempted theft of building materials, supplies and fixtures on or next to the insured premises where the insured has a covered structure under construction, at the premium shown in the Premium Section of the manual. 5-ff RESIDENCE SPECIAL LOSS SETTLEMENT ENDORSEMENT-(ML-24A) Limited Form Residence may be insured for the full cost of replacement, subject to a maximum or 125% of the coverage A amount of insurance, at the charges shown in the Premium Section. 5-gg ROOF SURFACE ACTUAL CASH VALUE LOSS SETTLEMENT (ML-124) Coverage on policies written on a Replacement Cost basis may be restricted to Actual Cash Value Settlement when roof surfaces are damaged by wind or hail. This endorsement may be Applied when increased hazard is detected through inspection or re-inspection of the subject property is located in a high wind area. The Underwriter may apply this endorsement to policies written as new business after 2/15/2014. The insured may choose this option at any time. 5-hh UNDERGROUND UTILITY LINE ENDORSEMENT (ML-342) Coverage is provided for direct physical loss to underground utility line covered property that is caused by an underground utility line occurrence on the insured premises. This coverage is available for policies insured for Peril Forms ML-2, ML-3 or ML-5 and is included on new and renewal policies with the listed perils. If this coverage is not wanted by the Insured a request to remove the coverage can be submitted to the Company. The rates for this endorsement are shown in the Premium Section of the Manual. 5-ii EQUIPMENT BREAKDOWN ENHANCEMENT ENDORSEMENT (ML-346B) This coverage is available for policies insured for Peril Forms ML-3 or ML-5. The rates for this endorsement are shown in the Premium Section of the Manual. ED. 1/25/17 9

17 5-jj COV A REPLACEMENT COST PROVISION MODIFIERS (CVMIC ML-131 & CVMIC ML-132) (FOR USE WITH ML-2, ML-3) 5-jj-1 REPAIR COST (CVMIC ML-131) This endorsement provides coverage for the cost of repairs for partial losses when Coverage A is less than 80% of the dwelling's actual replacement cost. If repairs are not made, then a claim would be settled on an Actual Cash Value basis. The endorsement is only available with coverage forms ML-2 or ML-3. Additional charges are shown in the Premium Section of the manual. 5-jj-2 MODIFIED REPLACEMENT COST - (CVMIC ML-132) This endorsement provides replacement cost coverage for partial losses when Coverage A is less than 80% of the dwelling's actual replacement cost. The endorsement is only available with coverage forms ML-2 or ML-3. Additional charges are shown in the Premium Section of the manual. 6. OPTIONAL LIABILITY COVERAGE & ENDORSEMENTS : All mandatory or optional Section II Coverages must be written at the same limit. 6-a DESCRIBED RESIDENCE PREMISES - 1 OR 2 FAMILY - (ML-9) Personal Liability and Medical Payments limits of liability may be increased at the premiums shown in the Premium Section of the manual. 6-b ADDITIONAL RESIDENCE PREMISES - 6-b-1 6-b-2 Additional Residence Premises - those occupied by the insured may be covered at the premiums shown in the Premium Section of the manual. Additional Residence Premises - Rented to others - (ML-70) - those rented to others may be covered at the premiums shown in the Premium Section of the manual. 6-c RESIDENCE EMPLOYEES - Additional premiums for each employee in excess of two are shown in the Premium Section of the manual. 6-d ADDITIONAL INTERESTS - (ML-41) The policy may cover additional owners at no additional premium. This coverage is limited to the building plus premises liability. 6-e BUSINESS PURSUITS - (ML-71) Coverage may be provided for the liability of an insured arising out of business activities, other than a business of which the insured is sole owner or partner, at the additional premiums shown in the Premium Section of the manual. Classify as shown below and apply the charges to each person insured. ED. 3/1/17 10

18 Classifications: 6-e-1 Clerical Office Employees - engaged wholly in office work and having no other duty in or about the employer's premises. 6-e-2 6-e-3 6-e-4 6-e-5 Salespersons, Collectors or Messengers - no installation, demonstration or service operations. Salespersons, Collectors or Messengers - including installation, demonstration or service operations. Teachers - athletic, laboratory, manual training, and swimming instruction, excluding liability for corporal punishment of pupils. Teachers - not otherwise classified, excluding liability for corporal punishment of pupils. Occupations not classified - Refer to Company. 6-f CREDIT FOR ELIMINATION OF SECTION II - Section II may be omitted by policyholder from the policy or endorsement covering the additional residence if the primary policy provides Section II coverage for such residences, at the premium credit shown in the Premium Section of the manual. 6-g DOG LIABILITY EXCLUSION ML-MC-1 Liability Coverage arising out of the ownership or keeping of dogs may be excluded from the policy. At the underwriter s discretion and by agreement of the insured dogs having a propensity for doing injury to persons or property may be excluded from coverage. A premium credit is shown in the Premium Section of the manual. 6-h LIABILITY COVERAGE SECTION - FARM (ML-10F) (Form ML-10F replaces Form ML-9) Farm liability exposures on or away from the residence premises location may be covered at the additional premiums shown in the Premium Section of the manual. The following may not be covered : a. Farms where the principal purpose is to supply commodities for manufacturing or processing by the insured for sale to others. b. Farms where the principal purpose is the raising and using of horses for racing purposes. c. Incorporated farms. Charges must be made for the initial farm exposure and each additional farm premises, if they exist. 6-h-1 Initial Farm Exposure. This includes: a. the principal farm premises, which is the largest parcel of farm land with out-building(s), whether owned and operated by the insured or rented to others; and b. all farm land without out-buildings used in conjunction with the above, including any vacant farm land. Any other dwellings located on the farm shall be rated as additional residence premises. ED. 5/1/08 11

19 6-h-2 6-h-3 6-h-4 6-h-5 Each additional farm premises - This includes any additional farm with out-building(s), whether owned and operated by the insured or rented to others, and all vacant farm land used in conjunction with it. Any dwellings located on the farm shall be rated as additional residence premises. Farm employees - Coverage may be provided to include liability and medical payments for farm employees of any insured for injuries sustained during the course of their employment. (ML-311) Farm employees employed in violation of the law may be specifically excluded. (ML-319) Animal collision - Coverage may be provided at the additional premium shown in the Premium Section of the manual. 6-i GOLF CART LIABILITY EXTENSION - (ML-82) Coverage may be provided at the premium shown in the Premium Section of the manual. 6-j LEAD EXCLUSION - (ML-59) Coverage may be excluded for the liability arising out of business uses of the residence, at the premiums shown in the Premium Section of the manual. The following conditions apply: 1. This exclusion applies to those areas of the residence used or held for business pursuits including, but not limited to, child or adult care services, rental or holding for rental to tenants for residential purpose or any other business use by any insured or other occupants. 2. This exclusion does not apply to those areas of the residence used by any insured, in whole or part, for residential purposes. 3. This exclusion does not apply to residences newly constructed after This exclusion does not apply to residences that are certified as having undergone total lead abatement or have been otherwise tested and certified as being lead free. 6-k OFFICE, PROFESSIONAL, PRIVATE SCHOOL OR STUDIO OCCUPANCY - Incidental office, professional, private school or studio occupancies are permitted provided: a. the premises are occupied principally for residential purposes, and b. there is no other business conducted on the premises. At the additional premium shown in the Premium Section of the manual, coverage may be provided for the liability of an insured arising from: 6-k-1 6-k-2 6-k-3 an office, professional, private school or studio occupancy in the home or in a separate structure on the premises. The limit for Coverage C shall be not less than 60% of the Coverage A limit. (ML-42) professional instruction, given by the insured, in the home. The insured employs no assistants and the home has not been altered to accommodate the occupancy. (ML-42) an office, professional, private school or studio occupancy in an additional residence premises occupied by the insured, other than the described home. (ML-43) ED. 5/1/08 12

20 Space in the described or additional dwellings rented to a person other than an insured shall not be deemed business property while used by that person as an office, professional school, private school or studio. The policy may be so endorsed at no charge. Please refer to company for Medical Payments charges on incidental day nurseries or nursery schools. 6-l OUTBOARD MOTORS AND WATERCRAFT - (ML-75) Coverage may be provided for watercraft not otherwise covered by the policy at the premiums shown in the Premium Section of the manual. a. When two or more outboard motors are regularly used together with any single watercraft owned by the insured, the horsepower of all such outboards shall be accumulated for rating purposes. b. Sailboats 26 to 40 feet in length with auxiliary power are classed as inboard motor boats. 6-m PERSONAL INJURY - (ML-46) Coverage may be provided for the named insured's legal liability resulting from the false arrest, libel, slander, or invasion of privacy of another, at the additional premiums shown in the Premium Section of the manual. 6-n PRIVATE STRUCTURES - RENTED TO OTHERS - (ML-40) When coverage under Section I is provided for private structures rented to others, apply the additional premiums shown in the Premium Section of the manual. 6-o TRAMPOLINE EXCLUSION - (ML-52A) MANDATORY FORM All POLICIES Coverage is to be excluded for the liability arising out of ownership or use of a trampoline, at the credit shown in the Premium Section of the manual. 6-p WATERBED LIABILITY - (ML-209) Coverage may be provided for Waterbed Liability at the premiums show in the Premium Section of the manual. 6-q RESIDENCE HELD IN TRUST - (ML-22) This endorsement is for use on policies in which the grantor (settlor or trustor) has placed the title of their residence premises in a trust. At least one grantor (settlor or trustor) must be a resident of the insured premises. This endorsement will allow coverage to be extended to any trustee(s) named in the schedule, but only with respect to the trustee s duties as a trustee of the trust named in the schedule. None of the trustees can be a partnership, joint venture, corporation, limited liability company or other organization. In addition, none of the trustees can be a licensed professional who administers trusts, unless that trustee is a relative of the grantor (settlor or trustor). ED. 4/

21 OTHER CREDITS AND SURCHARGES 7-a CLAIMS FREQUENCY SURCHARGES At the time of policy issuance and at each annual rating period the policy will be reviewed for loss history for the immediate preceding three years to determine if there were any paid losses for the insured location or residence location of the insured for prior home addresses. Based on that loss history one of the following factors will be applied to the final policy premium. This applies to all programs available. 2 Paid Losses Factor Paid Losses Factor Paid Losses Factor b RENOVATED HOME CREDITS These credits apply to Standard Homeowners Program ML-1R, 2, & 3 only. Not applicable to Tenant Homeowners, Preferred Homeowners, Seasonal Homeowners, Day Care Homeowners, and Non Standard Programs. Renovated home credits do not apply where the home has received a New Home Discount. The following credits apply when a completed renovation questionnaire has received approval from the company underwriter. The purpose of the credits is to reflect the reduce loss potential when substantial renovations have been completed on roof, electrical, heating, and plumbing systems. (RHC form must be completed, signed, and attached to the application or endorsement request.) ROOF Renovations completed within the last 15 years 3% Credit ELECTRICAL Renovations completed within the last 30 years 3% HEATING Renovations completed within the last 25 years 3% PLUMBING Renovations completed within the last 35 years 3% 7-c LOSS FREE CREDIT This credit applies to the Standard Homeowners Program and the Preferred Homeowners Program only where the Insured has been (paid) loss free for three years with CVMIC or any other company with no lapse in coverage. 7-d TRANSFER CREDIT In the event that a policy is transferred from a licensed insurance company that we are acquiring, a maximum discount up to 20% will be applied to match the expiring premium in order to minimize the impact on the insured. The discount will be reduced at future renewals or removed in the event of a rate change that eliminates the need for the discount. The reduction on the first renewal will be 50% with the balance of the discount removed at the second renewal. ED. 3/1/17 14

22 PREMIUM SECTION OPTIONAL COVERAGES ANNUAL PREMIUMS PROPERTY COVERAGES MAXIMUM AMOUNT OF RATE PER ADD'L SECTION I INSURANCE AMOUNT AMOUNT Rule No. 5-a ADDITIONAL LIVING EXPENSE - 1,000 3 NONE (Coverage D) 5-c BUILDING ADDITIONS AND ALTERATIONS - ML-4 ONLY - 1,000 4 NONE (ML-51) 5-d CONDOMINIUMS AND SHARED OWNERSHIP HOUSING - (ML-15) Select form ML-2, ML-3 or ML-5 apply a 10% surcharge to the table premium Apply an additional 10% surcharge if non-owner occupied 5-e CONDOMINIUM UNIT-OWNERS SUPPLEMENTAL COVERAGES : 5-e-1 GLASS BREAKAGE - (ML-37) $10 per policy 5-e-2 LOSS ASSESSMENT COVERAGE - (ML-35) Amount of Insurance ML-1R, 2, 4, 5 ML-3 $ 1,000 $ 5 $ 6 5, , Each add l 5, ED. 5/1/08 15

23 MAXIMUM AMOUNT OF RATE PER ADD'L Rule No. INSURANCE AMOUNT AMOUNT 5-e-3 5-e-4 5-e-5 5-e-6 RELATED PRIVATE STRUCTURES AND CONDOMINIUM FIXTURES - (ML-34) MISCELLANEOUS REAL PROPERTY 1, NONE UNIT-OWNERS PRIVATE STRUCT. 1,000 9 NONE CONDOMINIUM UNIT OWNER-ADDITIONS SPECIAL COVERAGE - (ML-32) 1,000 2 NONE HIGHER LIMIT 1,000 7 NONE UNIT-OWNERS ADDITIONS AND ALTERATIONS - (ML-31) 1,000 4 NONE UNIT-OWNERS RENTAL TO OTHERS- (ML-33) 1, NONE 5-g CREDIT CARDS, FORGERY AND COUNTERFEIT MONEY - (ML-57) LIMIT OF LIABILITY RATE 2, , , , i DEBRIS REMOVAL EXTENSIONS - (ML-366) $15. per residence 1) COVERED DEBRIS PERCENTAGE INCREASE 10% $3 NONE EXCESS COVERAGE 1,000 $3 NONE ED. 5/1/08 16

24 MAXIMUM AMOUNT OF RATE PER ADD'L Rule No. INSURANCE AMOUNT AMOUNT 5-j DEDUCTIBLES ML-1, 2, 3, 5 DEDUCTIBLE OPTIONS SURCHARGE CREDIT (Not available for preferred program) % 250 8% ,000 7% 2,500 20% 5,000 30% DEDUCTIBLE-ML-4 OPTIONS SURCHARGE CREDIT % % 1,000 10% 5-l EARTHQUAKE - (ML-54), (ML-35A) Frame Mas.or Mas.Veneer ML-1, 2, 3, 5 1, ML-4 1, n HIGHER LIMITS ON CERTAIN PROPERTY - (ML-65H) Business property NONE Dismounted camper bodies NONE Grave markers NONE Guns NONE Money - ML ML-2, 3, 4, Motorized vehicles 1,000 5 NONE Securities - ML ML-2, 3, 4, Silverware, goldware & pewterware Up to $2,000 add'l NONE Over $2, NONE Unscheduled jewelry, etc. ($500 limit per article) ,500 Watercraft, etc NONE ED. 5/1/08 17

25 MAXIMUM AMOUNT OF RATE PER ADD'L Rule No. INSURANCE AMOUNT AMOUNT 5-o HOMEOWNERS ASSOCIATION - (ML-50) LIMIT OF LIABILITYRATE First $1,000 $10 Next $4,000 6 Next $5,000 4 Each add l $5, p-1 HOMEOWNERS INCREASED COV. (ML-147) Included 5-p-2 HOMEOWNERS PLUS COV. - (ML-150A) NO INCREASE IN LIABILITY $2500 water backup $25. per policy $5000 water backup $55. per policy (Preferred no charge ) 5-q HURRICANE RESISTANT GLASS - (ML-166) 3% credit on basic premium per location 5-r-1 INCREASED LIMIT (COV. C) 1,000 2 NONE 5-r-2 INCREASED LIMIT (COV. C) - (ML-66) AWAY FROM PREMISES 1,000 8 NONE ED. 5/1/08 18

26 MAXIMUM AMOUNT OF RATE PER ADD'L Rule No. INSURANCE AMOUNT AMOUNT 5-s INFLATION GUARD - (ML-243) AMOUNT OF QUARTERLY SURCHARGE INCREASE % % % % % 5-t IDENTITY FRAUD - (ML-189) Mandatory ML 1, 2, 3, & 5 (if owner occupied, primary residence) Optional ML 4 $10.00 per policy $10.00 per policy 5-u NEW HOME DISCOUNT - The following discounts are applied to qualified new homes. These credits apply to the basic policy premium and shall apply at the time each new policy or renewal policy is issued. Age of home equals year of policy effective date minus year built. NEW HOME AGE CREDIT 1-10 years 15% years 10% years 5% 65 or more +5% surcharge 5-w OUTSIDE ANTENNA NONE (ML-49) 5-x PHYSICIANS, SURGEONS, DENTISTS AND VETERINARIANS NONE (ML-69) ED. 1/25/17 19

27 MAXIMUM AMOUNT OF RATE PER ADD'L Rule No. INSURANCE AMOUNT AMOUNT 5-y PRIVATE STRUCTURES : 5-y-1 INCREASED LIMITS - PRIVATE STRUCTURES 1,000 3 NONE (ML-48), (ML-89) 5-y-2 INCREASED LIMITS PRIVATE STRUCTURES - RENTED TO OTHERS - 1,000 4 NONE (ML-40), (ML-89) 5-z PROTECTIVE DEVICE CREDIT - (ML-216) CREDIT Central station burglary and/or fire alarm systems 10% Fire and/or police department alarm systems 5% Local fire alarm systems and smoke detectors 2% Fire extinguisher 2% Sprinkler systems 3% (Maximum credit for protective devices 10%) 5-aa REDUCED AMOUNT (COV. C) $1 credit per $1,000 5-bb REPLACEMENT VALUE - PERSONAL PROPERTY - (ML-55) ML-1, 2, 3 ML-4 Increase limit of Cov. C to 70% of cov. A and increase basic policy premium by 10%. Min. add'l. charge - $20 Increase basic policy premium by 20%. Min. add'l. charge - $10 ED. 1/25/17 20

28 MAXIMUM AMOUNT OF RATE PER ADD'L Rule No. INSURANCE AMOUNT AMOUNT 5-cc RESIDENCE RENTAL THEFT - $12 per policy (ML-58) 5-dd 5-ee STORM EXTENDER ENDORSEMENT - (ML-79)$20 per location THEFT OF BUILDING MATERIALS - (ML-17) First $1,000 $20.00 Each additional $1,000 $ ff RESIDENCE SPECIAL LOSS SETTLEMENT ENDORSEMENT (ML-24A) Limited Form ML-2, 3 & 5 only RC Estimator, other valuation, Appraisal or outside inspection, Coverage A Minimum 100% of RC $5.00 per Policy 5-gg ROOF SURFACE ACTUAL CASH VALUE LOSS SETTLEMENT (ML-124) When this option is selected a rate credit of $2.00 shall apply to the policy. 5-hh UNDERGROUND UTILITY LINE ENDORSEMENT (ML-342) *Available only with ML-2, ML-3, & ML-5* $15.00 per Policy 5-ii EQUIPMENT BREAKDOWN ENHANCEMENT ENDORSEMENT (ML-346B) *Available only with ML-3 & ML-5* TIV is the sum of Coverages A, B, C, & D TIV Less than $500,000 $25.00 TIV $500, ,999 $50.00 TIV $1,000,000 & Over $ jj-1 REPAIR COST (CVMIC ML-131) Only for use with ML-2 or ML-3 % of Dwelling Replacement Cost Surcharge to Base Cov A Premium % % under 50 49% 5-jj-2 MODIFIED REPLACEMENT COST (CVMIC ML-132) Only for use with ML-2 or ML-3 % of Dwelling Replacement Cost Surcharge to Base Cov A Premium % % under 50 52% ED. 3/1/17 21

29 PREMIUM SECTION OPTIONAL COVERAGES ANNUAL PREMIUMS LIABILITY COVERAGE MED PAYMENTS (ADD FOR EACH ADD'L $500) SECTION II LIMIT* (3) (4) (5) (6) (7) Rule No. 6-a DESCRIBED RESIDENCE PREMISES - 1 OR 2 FAMILY - (ML-9) Zones Zone b ADDITIONAL RESIDENCE PREMISES 6-b-1 OCCUPIED BY THE INSURED b-2 RENTED TO OTHERS 1 family - (ML-70A) family c RESIDENCE EMPLOYEES Limits not available (1) & (2) *Liability/Med Payment 1. $25,000/ $50,000/ $100,000/ $200,000/ $300,000/ $500,000/ $1,000,000/1000 ED. 5/1/08 22

30 MED PAYMENTS (ADD FOR EACH ADD'L $500) SECTION II LIMIT* (3) (4) (5) (6) (7) Rule No. 6-e BUSINESS PURSUITS - (ML-71) 6-e e e e e f CREDIT FOR ELIMINATION OF SECTION II CREDIT $27 6-g CREDIT FOR DOG EXCLUSION FORM ML-MC-1 CREDIT $2 6-h LIABILITY COVERAGE SECTION -FARM - (ML-10F) 6-h-1 INITIAL FARM EXPOSURE acres acres Over 500 acres Limits not available (1) & (2) *Liability/Med Payment 1. $25,000/ $50,000/ $100,000/ $200,000/ $300,000/ $500,000/ $1,000,000/1000 ED. 5/1/08 23