Underwriting Guidelines Dwelling Property Arizona

Transcription

1 Underwriting Guidelines Dwelling Property Arizona Edition Date 10/16/2014 General Procedures Policy Period The CSE Dwelling Fire policy is written for a term of 12 months. Renewals are continuous and based upon the premiums in effect at the time of renewal. The current editions of the applicable forms and endorsements shall be made a part of the policy. All rates listed in the manual are based on a 12-month policy term. Premium Collections New Business All new business applications must be accompanied by either: Full payment of the 12-month policy premium, or The initial premium payment if the policy is being issued under the installment payment plan (see Installment Payment Plan below). Exception Applicant is an existing CSE policyholder (indicate policy number on application) If the payment is to be paid by an escrow or mortgage company, the new business application may be sent without payment. The escrow or mortgage company must remit the full 12-month policy premium upon policy issuance. Note: Be sure to indicate in the designated space on the application the name and address of the individual, and the escrow or mortgage company to be billed for the premium, as well as any special billing procedures. Qualified applications accepted without premium payment will be billed by the Company to the appropriate party, and full payment is due by the effective date of the policy or fifteen (15) days from the issue date of the policy, whichever is later. Late Payment If payment has not been received by the cancellation effective date, a cancellation notice will be sent to any additional insureds and loss payees or mortgagees indicating that the policy was canceled for non-payment. Format Date 10/23/2014 1

2 Non-Pay Cancellation Procedure If premium payment has not been received by the fifteenth (15th) day after the effective date of coverage, a cancellation pending notice will be sent to all concerned parties indicating that if payment is not received within twenty (20) days, the policy will be cancelled effective on that twentieth (20th) day. If payment has not been received by the cancellation effective date, then a cancellation notice will be sent to any additional insureds and loss payees or mortgagees indicating that the policy was cancelled for non-payment on that twentieth (20th) day. Renewals All renewals are billed to the appropriate party per the agent s instructions 45 days prior to the renewal date, and the premium payment is due by the renewal date. If a premium payment is not received within five (5) days after the due date, a lapse notice is mailed to all concerned parties. If premium payment is not received within twenty (20) days of the due date, a notice of cancellation will be sent to all parties. Short Payments The CSE Dwelling Fire premium payment plan is a paid-to-date program. This means that when a partial payment is made and no further payments are received, the policy will be canceled as of the date that the coverage purchased by the initial payment ceases. A cancellation pending notice will be issued to all concerned parties 15 days prior to the time coverage ceases. A notice of cancellation will be issued on the date coverage ceases. There is no mid-term billing of any outstanding balance other than the second payment due from the insured paying under the installment plan. If paid-to-date coverage extends into the renewal billing cycle, any balance due will be carried forward and added to the premium due on renewal. If paid-to-date coverage ends before the renewal billing cycle begins, the policy will be canceled unless payment of the amount due is received. Installment Payment Plan CSE offers 2 payment plans for insureds who do not wish to pay the full 12-month premium at one time. The first installment plan enables the insured to pay in 4 installments. The second payment plan allows the insured to pay in 6 installments. Format Date 10/23/2014 2

3 Service Charge If the insured wishes to pay by an installment plan, a $4 service charge will be assessed to each installment. Any time the first payment is less than the full term premium, we will use the installment plan selected by the insured, and the service charge will be added. Payment Allocation For the 4 pay installment plan, the first installment consists of 25% of the full annual premium. The $4 service charge will be added to the first installment and to each remaining installment. The remaining three installments are 25% of the full annual premium. For the 6 pay installment plan, the first installment consists of 16.7% of the full annual premium. The $4 service charge will be added to the first installment and to each remaining installment. The five remaining installments are 16.66% of the full annual premium. Billing For the 4 pay installment plan, we will automatically bill the insured for the second installment which is due 70 days after the term effective date. The third and fourth installments, which will be due in 90 day intervals after the second installment, will be billed by us 30 days prior to the due date. For the 6 pay installment plan, we will automatically bill the insured for the second installment, which is due 40 days after the term effective date. The remaining installments, which will be due in 60 day intervals after the second installment, will be billed by us 15 days prior to the due date. Late Payment If payment has not been received by the cancellation effective date, a cancellation notice will be sent to any additional insureds, loss payees, or mortgagees indicating that the policy was canceled for non-payment. Returned Checks A $25.00 charge will be applied to a policy when the insured s check is returned to CSE for non-sufficient funds. Rounding of the Premium All premiums for coverage must be rounded to the nearest dime. Format Date 10/23/2014 3

4 Preparing Applications Note: Failure to comply with the following guidelines may result in the suspension of the agent s binding authority. Legibility, Completeness, Timeliness Blank or unsigned applications must never be left with a prospective insured. CSE requires that all applications be: Written legibly (preferably, typewritten or computer-generated) Completed in full (all questions answered) Submitted within 10 days of binding. Applications submitted more than 10 days after binding are subject to cancellation Effective Date The policy effective date must be the same as or later than the date of the named insured s signature. Post-dated applications, to be effective within 60 days of the policy submission date, are permissible. Back-dated applications are prohibited. Backdating is defined as follows: posting an effective date prior to the time the coverage is applied for, without approval from an underwriter (Coverage is applied for when the named insured, for purposes of binding coverage, signs the application or submits money to the agent.) Insurance Binder CSE agents have authority to issue an insurance binder for a period of 30, 60, or 90 days from the effective date of the policy. Under no circumstances may a binder be issued for longer than a 90-day period. Include the time of binding as well as the expiration date of the insurance binder when completing the application. Address The applicant must have a definite and permanent address which is clearly stated on the application in the designated area. Use the remarks section of the application for this information. If the property has no numerical address, clearly specify the location with respect to well known landmarks or nearby entities which pinpoint locale. Format Date 10/23/2014 4

5 Signature and Dates Each application must be personally signed and dated by a named insured listed on the application as well as by the issuing agent or a licensed representative acting on behalf of the agent. If the named insured is a minor, the application and attachments must also be signed by a parent or guardian of the minor. Cancellations New Business CSE reserves the right to cancel a new business application for Underwriting reasons at any time within the initial 60-day underwriting period. General underwriting cancellation reasons include, but are not limited to, the following: Policy does not meet underwriting criteria Insured does not provide the required or requested underwriting information Material misrepresentation has been made by the insured or agent CSE does not provide the coverage requested Non weather or catastrophe related loss within the first 60 days of the policy period Condition of the dwelling and surrounding premise Policy premium is not submitted within required time period If we decline to process the application due to general underwriting unacceptability, we will mail a notice of cancellation to the named insured at the last known address, with a copy to the agent, as required by statute. Unearned premium, calculated prorata, will be returned to the named insured under a separate cover. To request reconsideration of a policy canceled within the initial 60-day underwriting period, the agent must write to the underwriter stating the reasons why the policy should remain in force. If the underwriter agrees to rescind the cancellation, the agent should return the refund check to CSE along with the information requested by the underwriter. Under no circumstances may the agent return a refund check to the company without prior approval from the underwriting department. Format Date 10/23/2014 5

6 Mid-Term Company-Initiated We may cancel a policy mid-term for the following reasons: Conviction of the named insured of a crime arising out of acts increasing the hazard insured against Non-payment of premium Acts or omissions by the insured or the insured s representative constituting fraud or material mispresentation in obtaining the policy, continuing the policy, or presenting a claim under the policy. Discovery of grossly negligent acts or omissions by the insured substantially increasing any hazards insured against. Substantial change in the risk assumed by the insurer, since the policy was issued, except to the extent that the insurer should reasonably have foreseen the change or contemplated the risk in writing the contract. A determination by the director of insurance that the continuation of the policy would place the insurer in violation of the insurance laws of this state. Failure of the insured to take reasonable steps to eliminate or reduce any conditions in or on the insured premises which contributed to a loss in the past or will increase the probability of future losses. Insured-Initiated The named insured may request the policy to be canceled at any time during the policy period. An ACORD cancellation form should be used to cancel the entire policy. The cancellation form must be signed and dated by the named insured or spouse, with the cancellation effective date indicated. Prohibited is retroactive cancellation where the effective date of cancellation is more than 30 days prior to the date of the named insured s signature on the cancellation form. The following cases are exceptions: Duplicate coverage exists under another policy issued by CSE or another insurance carrier, as evidenced by a declaration page from the new insurance carrier. The cancellation is pre-approved by the Underwriting Department Format Date 10/23/2014 6

7 The dwelling is sold at an earlier date and the insured provides proof of sale if insurance is canceled at the request of the insured, the earned premium shall be computed on a pro-rata basis. Non-Renewal Reasons for non-renewal include, but are not limited to, the following: Underwriting cause The agent no longer represents CSE Non-payment of premium There is a substantial increase in the hazard insured against Condition of the dwelling and surrounding area is unacceptable Failure of the insured to take reasonable steps to eliminate or reduce any conditions in or on the insured premises which contributed to a loss in the past or will increase the probability of future losses **Other reasons include those listed under the Mid-term Cancellation section of this manual. Note: In the event of non renewal based on condition of the premises, the insured shall be given thirty days notice to remedy the identified conditions. In the event that the identified conditions are remedied, coverage shall be renewed. In the event that the identified conditions are not satisfactorily remedied, the insured shall be given an additional thirty days, upon payment of premium, to cure the defective condition. We will notify the agent of our intent to non-renew. This notification will also include our reason(s) for the decision. Policy Rescission Policy rescission is an underwriting action that renders the entire contract between CSE and the applicant null and void as of the inception date. We rescind a policy when misrepresentation of material fact on the application is so critical that had the correct information been known at the time of the application we would not have bound the coverage. Format Date 10/23/2014 7

8 Reinstatements When a policy is canceled for non-payment of premium, the policy may be reinstated without lapse in coverage if the full amount due is received by the effective date of cancellation. A $4 reinstatement fee will be charged to the policy. Payments received after the date of cancellation will be referred to the Underwriting Department for approval. We may decline to reinstate a policy if: There is a history of late payments or prior cancellation for non-payment of premium. There is a history of NSF (non-sufficient funds) check payments described as: 2 or more NSF checks in the last year, or 3 or more NSF checks in the last 2 years. If the amount paid is less than the amount due when received. Policies with any prior loss history. Policies currently set to non-renew. If the Underwriting Department agrees to reinstate, such reinstatement will be processed without lapse in coverage. If the Underwriting Department declines reinstatement, the unearned premium will be returned to the insured, and the cancellation will stand. If payment is received more than 30 days after the cancellation date, the payment will be returned to the insured. Transfer or Assignment The transfer or assignment of policies is generally prohibited. A transfer or assignment may be approved under the following circumstances: Assignment from the named insured to a relative, in the event of transfer of title to the dwelling, or death of the named insured. In all circumstances, the request must be submitted to Underwriting for prior approval. (See Non-Bound Submission Procedure in the Eligibility Criteria section of this manual.) Format Date 10/23/2014 8

9 Eligibility Criteria Form Eligibility Dwelling Suitable for Immediate Occupancy A Dwelling Fire Policy may be issued to insure the following types of dwellings: A dwelling used exclusively for residential purposes with no more than 4 units (each designed for 1-family occupancy) and with no more than 5 roomers or boarders in total. A 1- to 4-family dwelling in a townhouse or row structure. Dwelling in the Course of Construction A Dwelling Fire Policy may be issued to insure a dwelling in the course of construction (COC) only as an exception. A COC dwelling is subject to the following eligibility criteria: 1. The dwelling must be built by a licensed contractor who has a minimum of $1 million Contractor s General Liability Coverage (CGL). 2. Insured may not act as own general contractor. 3. Contract cannot have waiver of subrogation clause. 4. Construction must be completed within 12 months of binding coverage. 5. Construction site must have security measures in force (e.g., chain link fencing, gated community, area lighting, or security guard). 6. Coverage amount must be for 100% of replacement cost. 7. Policy ineligible for extended replacement cost (D-515). 8. CSE must have a primary homeowner s policy inforce. Personal Property A Dwelling Fire Policy may be issued to insure personal property in the following types of dwellings: A dwelling that is eligible to be covered A dwelling with rental apartments, including furnishings, equipment and appliances in halls or utility rooms Format Date 10/23/2014 9

10 Any apartment or condominium unit used as private living quarters of the insured or rented to others furnished Minimum Limits, Section I, Coverage A Dwelling Area Minimum Limit of Liability Metro* $80,000 Non-Metro $70,000 * Metro areas include the following cities: Phoenix, Gilbert, Chandler, Tempe, Tucson, Mesa, Scottsdale, Glendale, and Peoria Non-Metro areas include all other cities not listed above. Binding Authority Section Coverage Binding Authority $ I A $800,000* II CPL 500,000 per occurrence II OL&T 500,000 per occurrence II Med Pay to Others 1,000 per person *1. CSE can consider risks up to $1,500,000 on a nonbinding basis. 2. Le Club and President s Council agents have Coverage A binding authority of $1,000,000 for dwellings in protection class 1 to 7. They can submit risks up to $2,000,000 on a non-binding basis (CSE can write a limited number of these per year). Ineligible Risks The following classes of dwelling fire risks are not eligible for coverage. Such risks may not be bound and if submitted will be automatically rejected. CSE will write up to ten (10) units total in the DF program. If there are more than 5 buildings, not exceeding the 10 unit total, the properties must be managed by a professional property management company. Risks not meeting CSE s minimum insurable values. See Minimum Coverage Limits in this section of the manual. Risks that are under 800 square feet Risks of sub-standard construction Risks with poor housekeeping and maintenance conditions Risks subject to brush or firestorm hazards including risks within a 1 mile radius of an active wildfire. Format Date 10/23/

11 Risks located in a known flood area Risks located on more than 5 acres of land Risks currently in pre-foreclosure or foreclosure. Risks purchased through distressed financial sales (i.e. pre-foreclosure, foreclosure, REO, short-sale, auction, etc). These risks may be bound if the agent has either first inspected the property and taken interior/exterior photos showing the dwelling is in good to better condition or the insured has a current 3 rd party, professionally completed, interior/exterior inspection (can include real estate inspections done in conjunction with the home sale). Vacant or unoccupied property Risks involving prolonged unoccupancy of premises or extensive travel Seasonal or secondary dwellings, unless the owner s primary residence is insured with CSE Risks with poor or limited road access Dwellings with open foundation Risks with corporation listed as named insured Dwellings not built by a licensed contractor Dwellings with a wood-burning stove or other space heater as the primary heat source Buildings converted to a dwelling occupancy from a non-residential occupancy Unusual liability exposure (e.g. vicious animal, unfenced swimming pool, swimming pools with slides, stairs with no handrail, trampolines, dwellings with lead based paint, etc.). Certain risks may be submitted on non-bound basis. Dogs with prior bite history, if liability coverage is desired or extended from a CSE homeowner policy. Dogs with vicious reputations* including but not limited to the following breeds: > Akita > Rottweiler > Pit-Bull (a.k.a. American Staffordshire Terrier) Format Date 10/23/

12 > Chow > Doberman-Pinscher > Presa Canario > Working American Bulldog > Mastiffs (all types) > Mix of the above breeds Non-domesticated animals which have known propensity for viciousness or the ability to cause serious bodily injury. The following list is intended to be used as a guide and is not an exhaustive list: > Large cats (lions, tigers, ocelots, etc.) Wolf-hybrid dog breeds Bears Snakes (Boa Constrictors, Pythons, Rattlesnakes, Coral, etc.) Dwellings on a slope of 35 degrees or more Dwellings built on piers or posts Dwellings located in Protection Classes 8 through 10. (See Suburban Rating Rule for exceptions.) Mobile homes Manufactured homes that are not on a permanent foundation and do not have wood frame construction. Risks where the amount of insurance requested is less than 100% of the full replacement cost of the dwelling Applicants that have had any of the following losses in the last three years: > any liability or theft/vandalism loss > any water loss > any loss over $5000 > two (2) or more losses Dwellings with windows covered by non- releasable security bars in living areas. Risks canceled or non-renewed by CSE or any other company for reasons listed in CSE s Ineligible Criteria Format Date 10/23/

13 Payment history with CSE or payment history from reports showing a history of late pays, collections, bankruptcy, bad debts, leins, or judgements are ineligible. Credit reports are ordered on all new business. Dwellings whose architectural style is highly ornate (e.g. Victorian or Edwardian style) Risks with tar and gravel or flat roofs that are over 20 years old. Risks with composition/asphalt shingle roofs that are over 30 years old. The roof must not show visible signs of wear or deterioration. Dwellings with wood shake roofs Risks where prior damage exists Risks under course of construction in which the owner is not the intended occupant Risks undergoing renovation or reconstruction Risks purchased for real estate speculation Dwellings which are architecturally unique (e.g., geodesic, log homes, earth homes) Absentee landlords (property owners who reside over 100 miles from the owned residence who do not have a professional property manager) Dwellings that have not had plumbing, heating and electrical updates within the last 30 years. If the home s electrical system is on circuit breakers and plumbing system is made of copper; no updates will be required for these two items. Galvanized plumbing unless it is 40 years of age or newer. Homes with an electrical system that contains any knob and tube, aluminum wiring, or any fuses. Individuals with the following occupations: > Reporters, authors, editors, or publishers of newspapers or magazines > Broadcasters, television and/or radio personalities > Professional actors, athletes, entertainers, or celebrities > Persons who have been elected to their occupations or full-time positions > Candidates for an elected office Format Date 10/23/

14 A dwelling that is unsupported by a primary homeowner s policy unless the following minimum requirements are met. > The home must have a minimum of 800 square feet. > Minimum Coverage A is $120,000 non-metro and $150,000 metro. > Must be loss free for the past 3 years. > Any course of construction risk must have the primary homeowner s insured by CSE. > Must meet all other regular underwriting guidelines. Non-Bound Risks (submit for approval) Dwellings with 3 or more mortgages Primary residences located outside of producer s marketing area or outside of Arizona Dwellings exceeding binding authority limits Risks with any farming exposure Non-Bound Submission Procedure An agent may not bind an applicant who does not qualify for coverage under the underwriting guidelines of this manual. Underwriting will review a non-bound application submitted by an agent if the following conditions are met: Agent does not accept premium; Agent indicates Non-bound on the application; Applicant and agent do not sign and date the application; Application does not show effective dates but is otherwise completed in full; Agent includes with the application a detailed description of the circumstances surrounding the non-bound submission and includes in that description comments regarding the applicant. If Underwriting approves the application for binding, Underwriting will return the original application to the agent requesting the premium and an effective date. To assure prompt handling, the agent should forward the application, premium, and Underwriting memo of acceptance through the normal new business submittal Format Date 10/23/

15 process. We may not provide coverage prior to the date that we actually receive the premium. Policy Attachments and Inspection Requirements 1. Inspect any property risk, including personal property, prior to binding. 2. Inspect or forward the following items: a. Any existing structure damage (must be reported) b. Replacement value of the dwelling 3. Include the following items with each application: a. Marshall & Swift Replacement Cost Estimator (current edition) b. Supplemental wood stove questionnaire and photo of wood stove (if applicable) c. Dog Questionnaire (if applicable) Underwriting Guidelines Introduction The Dwelling Fire Policy program provides property and liability coverages using the forms and endorsements specified in this manual which contains the rules, classifications, and premiums which govern the writing of Dwelling Fire policies. The rules, rates, forms, and endorsements filed by or on behalf of the company for each coverage shall apply in all cases not specifically provided herein. CSE will write up to ten (10) units total in the DF program. If there are more than 5 buildings, not exceeding the 10 unit total, the properties must be managed by a professional property management company. Occupation Definition All policies will be rated in Civil Service Employees Insurance Company. Each application must identify the occupation of the Named Insured. Forms Offered Special Form (D003) Format Date 10/23/

16 Deductibles Basic Deductibles The Dwelling Fire policy applies a basic loss deductible clause of $100 to any loss. Note: The $100 deductible is no longer available for new business. The new minimum deductible is $250. Optional Deductibles $250, $500, $1,000 and $2,500 flat all-perils deductible clause Construction Construction Classifications Construction Classifications A dwelling with exterior walls of combustible construction, Frame including walls with metal, stucco, or metal lath and plaster, on combustible supports A dwelling with exterior walls of brick, concrete, concrete Masonry block, adobe, tile, other masonry materials or noncombustible materials, on non-combustible supports A dwelling with walls of combustible construction veneered with masonry materials. Dwellings of masonry veneer Masonry Veneer construction and their contents and apartment contents are eligible for masonry premiums A dwelling is to be classified as CONSTRUCTION masonry Mixed where the wall areas of masonry construction exceed 33 Construction 1/3% of the total exterior wall area. Construction Eligibility Criteria A dwelling is eligible if it meets the following qualifications: 1. Has minimum of 800 square feet of living area 2. Built by a licensed contractor 3. Permanently attached to a continuous foundation 4. Has basic construction of frame, brick, concrete, or concrete block 5. Has roof of composition shingle, rock, tile, slate or composition roll (semi-flat roof only) 6. Has siding of wood, composition, stucco, brick veneer, vinyl, asbestos, steel, or aluminum Format Date 10/23/

17 Brush Exposure Designated Brush Areas (and Possible Brush Areas) Definition Any property located in a designated brush area or possible brush area (nondesignated) per visual inspection is ineligible unless the requirements below are met. Application Requirements A non-bound application may be submitted for consideration if there is or are: Brush clearance of 1,000' from all sides of the dwelling Tile roof on insured home and neighboring homes Dual-access road (fire department will not enter a dead-end street or cul-desac where the fire can come in behind personnel and trap the equipment) 4 photos showing that surrounding area has been cleared of native growth Diagram of dwelling position in relation to the street No brush downhill from the dwelling Photocopy of page on map with dwelling pinpointed No risks with wood shake roofs whether treated or not Agent inspection of the risk Suburban Rating Rule Use for all risks rated from the personal lines manual. The location of the property must be inside the city limits or the described area furnishing the fire protection to qualify for the class listed for the city or area. Use the indicated class for properties inside the city limits or the described area furnishing the fire protection. Suburban Rating Rule: Dwellings not part of a complex and not located in areas listed will fall under Protection Class 6, provided all the following requirements are met: Format Date 10/23/

18 1. The dwelling is located within 5 miles travel distance from a full time, paid fire department that will respond. A State Department of Forestry fire station is not considered a recognized fire department unless it has contracted to provide residential protection for the area in which the dwelling is located. 2. The dwelling is located within 1,000 feet of a public fire hydrant with 2 1/2" hose outlets connected to a 4" or larger main. 3. The dwelling is not located in a severe brush or forest conflagration area. The dwelling will be as classified under Protection Class 8 if either one of 1. or 2. above together with 3. are met. The dwelling will be classified under Protection Class 9 if 1. and 2. above are not met, but 3. is satisfied. For towns or Areas not listed which are located in a brush or forest conflagration area, use Protection Class 10. *Reminder: Protection Classes 8-10 are unacceptable. Wood-Burning Stoves The following rules govern the binding of risks that contain wood-burning stoves or other secondary heat sources. Mandatory attachments: photo of risk, photo of wood-burning stove, and completed wood-burning stove supplement. The wood-burning stove must be installed by a contractor or other professional and must be approved by the fire department or building inspector. The wood-burning stove must not be the only heat source in the home. The primary heat source should be central heating. The wood-burning stove must be safety checked and cleaned annually. The home must be located in Protection Class 7 or lower. Optional Coverages Refer to the Endorsements Section of this manual for optional coverages pertaining to the Dwelling Fire policy. Format Date 10/23/

19 Replacement Cost Replacement Cost Statement CSE requires that all dwellings be insured at 100% of replacement cost, for the purpose of providing adequate protection against a total loss of property. We require the current Marshall & Swift replacement cost estimator calculation to establish accurate replacement cost coverage. Marshall & Swift RCT Express Introduction The Marshall & Swift program is designed to extend the estimating capability of the more traditional square foot method so that users may quickly and easily determine up-to-date replacement cost values for a wide range of homes, including those which are: Mainstream and upscale More lavish in their appointments and additional features Of high quality Inflation Factors CSE automatically includes inflation factors in the calculation for each policy renewal period to adjust the replacement value of homes for varying costs in the construction industry. Note The Marshall & Swift program is available on the cseagents.com website and within SPInn. Extended Replacement Cost For all applicants requesting extended replacement cost on the dwelling (D-515 Endorsement) the following applies: All dwellings and separate structures must be issued at 100% replacement cost. Dwellings containing highly ornate features (Victorian or Edwardian style) are ineligible. Format Date 10/23/

20 The dwelling must be located in an area with a protection class rating 1 through 6. Copy of updated Home Replacement Cost Estimator must be included with the request to add the endorsement. Other Structures-Increased Limits The additional premium per $1,000 of insurance shall be $2.00 Contents Coverage Contents Coverage is available as an option (does not include theft peril). Endorsements Section Dwelling Fire Endorsements Policy and Endorsement Booklets F.30460D Policy booklet (D003) F.30465F (05/03) Endorsements booklet F.30470A Policy booklet (D001) D014 Additional Living Expenses (Form D001 Only) For an additional premium, coverage is provided up to the limit shown in the Declarations for the necessary increase in living expenses incurred so that the household can maintain its normal standard of living when a loss to property described in Coverage A Dwelling, Coverage B Other Structures, or Coverage C Personal Property makes the Described Location unfit for its normal use. The premium for each additional $1,000 of coverage shall be the per $1,000 rate shown on the rate page for the risk being insured. D016STI Earthquake The additional premium per $1,000 of coverage shall be: Format Date 10/23/

21 Earthquake Zone Construction Zone 1 Zone 2 Building Contents Building Contents Frame Masonry with Exterior Walls of Tile or Concrete Block Other Masonry Masonry Veneer * *NOTE: Masonry Veneer is not covered Zone 1: Counties of Cochise, Pima, Santa Cruz, and Yuma Zone 2: Remainder of State D041 Comprehensive Personal Liability Additional Insured This endorsement extends the policy to any person or organization who has an interest in the named insured s property with respect to Coverages A Dwelling, B Other Structures, and Personal Liability and Medical Payments to Others. There is no additional premium for this endorsement. H052 Continuous Renewal Plan This endorsement provides continuous coverage until the policy is cancelled in writing by the Company or the insured fails to pay the premium. D300 Special Provisions (All Forms) Form D300 is required on all Dwelling Fire Policies. H372 Mortgagee Clause This endorsement extends payment of a loss under this policy to the mortgagee who is named as payee(s) in the Declarations of this policy. H438 Lender s Loss Payable Clause This endorsement is attached to all Homeowner s Policies where a lender (such as bank, savings and loan, credit union, or private mortgage company) is providing financing. The endorsement makes the mortgagee s interest the first party in a claim settlement. In practice, small claims that do not totally destroy the dwelling are handled between the insured and the Company. For total losses, the mortgagee s interest is part of the claims settlement. D515 Replacement or Repair Cost Protection Coverage A Dwelling (Form D003 Only) For an additional premium, Coverage A Dwelling is extended to include the full cost of repair or replacement without deduction for depreciation. The dwelling must be insured to 100% of replacement cost. In no event will the total amount of Format Date 10/23/

22 coverage exceed 125% of the Coverage A Dwelling amount shown in the Declarations. The additional premium shall be $ D650 Comprehensive Personal Liability For an additional premium, coverage is provided for Personal Liability and Medical Payments to Others. Personal Liability coverage > pays for damages because of bodily injury or property damage caused by an occurrence for which the insured is legally liable; and > provides a defense even if the suit is groundless, false, or fraudulent. Medical Payments to Others Medical Payments to Others coverage pays for the necessary medical expenses incurred or medically ascertained within three (3) years from the date of an accident causing bodily injury. Additional Coverages Additional Coverages include: > Claim Expenses, meaning: expenses incurred by the Company or costs taxed against the insured in any suit the Company defends; premiums on bonds required in a suit defended by the Company; reasonable expenses incurred by the insured at the Company s request, including actual loss of earnings (but not loss of other income) up to $50 per day for assisting the Company in the investigation or defense of any claim or suit; and interest on the entire judgement which accrues after entry of the judgement and before the Company pays or tender, or deposits in court that part of the judgement which does not exceed the limit of liability that applies. > First Aid Expenses, meaning expenses for first aid to others incurred by the insured for bodily injury covered under the policy. Format Date 10/23/

23 > Damage to Property of Others, meaning at replacement cost, up to $500 per occurrence for property damage to property of others caused by the insured. > Loss Assessment, meaning up to $1,000 for any loss assessment charged during the policy period against the insured by a corporation or association of property owners when assessment is made as a result of bodily injury or property damage or liability for an act of a director, officer or trustee. The additional premium is as follows: CPL/Med Single Family, Owner Occupied Limit $ Premium $ 100,000/1, ,000/1, ,000/1, Two Family, Owner Occupied Limit $ Premium $ 100,000/1, ,000/1, ,000/1, Additional Residence, Owned by Insured, Not Rented to Others Limit $ Premium $ 100,000/1, ,000/1, ,000/1, Single Family Dwelling-Rented to Others Limit $ Premium $ 100,000/ ,000/1, ,000/ ,000/1, ,000/ ,000/1, Two Family Dwelling-Rented to Others Limit $ Premium $ 100,000/ ,000/1, ,000/ ,000/1, ,000/ ,000/1, Format Date 10/23/

24 D660 Premises Liability (OL & T) Liability Coverage For an additional premium, coverage is provided for bodily injury or property damage arising out of the ownership, maintenance or use of the insured location, not otherwise excluded, up to the limit of liability shown in the Declarations. Additional Coverages Additional Coverages include: > Claim Expenses, meaning: expenses incurred by the Company or costs taxed against the insured in any suit the Company defends; premiums on bonds required in a suit defended by the Company; reasonable expenses incurred by the insured at the Company s request, including actual loss of earnings (but not loss of other income) up to $50 per day for assisting the Company in the investigation or defense of any claim or suit; and interest on the entire judgement which accrues after entry of the judgement and before the Company pays or tenders, or deposits in court that part of the judgement which does not exceed the limit of liability that applies. > First Aid Expenses, meaning expenses for first aid to others incurred by the insured for bodily injury covered under the policy. The additional premium is as follows: Private Residence Limit $ Premium $ 100, , , Two-Family Dwelling Limit $ Premium $ 100, , , Three-Family Dwelling Limit $ Premium $ 100, , , Four-Family Dwelling Limit $ Premium $ 100, Format Date 10/23/

25 300, , Dwelling Fire Endorsements Continued F.30635A Form D003 Please refer to endorsement for details. F.31555A Pathogenic Organisms Exclusions The following exclusion is added if your policy is endorsed with the following forms: D650ST DWELLING FORM-COMPREHENSIVE PERSONAL LIABILITY The following exclusion is added to LIABILITY COVERAGES, EXCLUSIONS, 1. Personal Liability and Medical Payments to Others do not apply to bodily injury or property damage: Arising out of any pathogenic organisms, regardless of any other cause or event that contributed concurrently or in any sequence to that injury or damage. Pathogenic Organisms means any bacteria, yeasts, mildew, virus, fungi, mold, or their spores, microtoxins or other metabolic products. D660ST DWELLING FORM-PREMISES LIABILITY The following exclusion is added to: LIABILITY COVERAGES, EXCLUSIONS, 1. Premises Liability coverages and Medical Payment to Others do not apply to bodily injury or property damage: Arising out of any pathogenic organisms, regardless of any other cause or event that contributed concurrently or in any sequence to that injury or damage. Pathogenic Organisms means any bacteria, yeasts, mildew, virus, fungi, mold, or their spores, microtoxins or other metabolic products. F.31705A Pathogenic Organisms Restricts coverage for damage due to Pathogenic Organisms. F.31890B Personal Injury Liability If Comprehensive Personal Liability or Premises Liability has been purchased, the definition of Bodily Injury may be broadened to cover Personal Injury (libel, slander, wrongful eviction, etc.) Format Date 10/23/

26 The limit of liability for Personal Injury must be the same as for Comprehensive Personal Liability or Premises Liability. This endorsement may only be added effective the new business date or on a renewal date. It may not be added mid-term. When added on a renewal date the request must be submitted to the company non-bound. F.32630C Cap On Losses From Certified Acts Of Terrorism; Disclosure Pursuant To Terrorism Risk Insurance Act This form limits coverage to what CSE is responsible for under the federal Terrorism Risk Insurance Act for certified acts of terrorism, for those policies covering businesses. There is no premium charge for this endorsement. This form is added to property and liability coverages when there is a known business exposure. Examples include dwellings rented to others or when D660ST is on the policy, indicating the location is not owner-occupied. F.34080A Additional Interests Described Location In addition to the Mortgagee(s) shown in the Declarations, the persons or organizations named in the Declarations also have an interest in the described location. If we decide to cancel or not to renew this policy, the persons or organizations named in the Schedule will be notified in writing. All other provisions of this policy apply. Change History 10/16/2014 Updates Added risks located on more than 5 acres of land to the Ineligible Risks section. 11/25/2013 Updates Updated the Ineligible Risks section to include vandalism losses as ineligible along with theft losses. 7/15/2012 Updates Added the F.34080A-Additional Interests Described Location endorsement. 5/15/2012 Updates Updated the Ineligible Risks section to include all types of Mastiff dogs and dwellings purchased through distressed financial sales. Format Date 10/23/

27 1/20/2012 Updates Removed the reference Available January 2012 from the F.31890B-Personal Injury Liability endorsement. Updated the Ineligible Risks section to include risks undergoing renovation or reconstruction. 12/12/2011 Updates Removed the dwelling age requirement from the D-515 endorsement. Added the F.31890B-Personal Injury Liability endorsement which will be available in January /12/2011 Updates Updated the Ineligible Risks section to include risks within a 1 mile radius of an active wildfire. 6/7/2011 Updates Updated the 6 Pay Plan so that it is now offered for both new business and renewals. 4/20/2011 Updates Removed reference to the F.30910A Exclusions for Computer-Related Damage or Injury as this form is no longer in use. Changed the Ineligible Risks to state that manufactured homes without a permanent foundation and without wood frame construction are ineligible. 11/18/2010 Updates Amended description of unusual liability exposures in the Ineligible Risks section to include dwellings with lead based paint. Removed references to the rating disk and German Shepherds. 4/29/2010 Updates Removed the F.30640A Ordinance or Law endorsement from the endorsements section. 6/25/2009 Updates Updated agent Coverage A binding authority to $800,000. Added CSE can consider risks with Coverage A up to $1,500,000 on a non-binding basis ($2,000,000 for Le Club and President s Council agents). Format Date 10/23/

28 5/12/2009 Updates Removed Dwellings built prior to 1960 from the Ineligible Risks section and Dwellings with flat roofs from the Non-Bound Risks section. 4/10/2009 Updates Added the F.32630C endorsement. 1/22/2009 Updates Added $1,000 and $2,500 as optional deductibles. 8/22/2008 Updates Updated the ineligible list to include the acceptability of galvanized plumbing if 40 years of age and newer. Updated the ineligible list to include the acceptability of composition/asphalt shingle roofs if replaced in the last 30 years, rather than 20. 5/6/2008 Updates Updated the ineligible list to include risks currently in pre-foreclosure or foreclosure. Clarified the ineligible list to include Pit Bulls (a.k.a. American Staffordshire Terriers) Corrected the form for Continuous Renewal Plan from D052 to H052. 3/1/2008 Updates Updated the installment payment plan description to include the 6 pay option. 2/15/2008 Updates Added the Returned Checks information. Updated the ineligible risks list to show 800 is the minimum square footage versus 1, /14/2007 Updates Corrected the Service Charge from $6 to $4. Updated the Reinstatements section to include a $4 reinstatement fee. Format Date 10/23/

29 11/06/2007 Updates Amended the ineligible risks list to include swimming pools with slides. Updated the definition for Absentee Landlord in the ineligible risk listing. 08/29/2007 Updates Reduced the minimum square footage requirement from 1,200 to 1,000 square feet for stand alone dwelling fire policies. Format Date 10/23/