Underwriting Guidelines Automobile Nevada

Transcription

1 Underwriting Guidelines Automobile Nevada Edition Date 12/1/2016 General Procedures Policy Period The CSE automobile policy is written for a term of 6 or 12 months. Renewals are continuous and based upon the premiums in effect at the time of renewal. All rates listed in the manual are based on a 6-month policy term. Premium Payment New Business All new business applications must be accompanied by either: Full payment of the 6 or 12 month policy premium, or The initial payment of premium if the installment payment plan is used. A Policy Writing Fee of $15 will be charged on all new policies. Insureds who pay the entire premium in full will receive a 5% discount. LATE PAYMENT When an application has been accepted without the initial premium payment, the initial payment is due by the effective date of the policy or fifteen (15) days after the processing date if the declaration is produced after the effective date. If no payment is received by the due date, a cancellation notice will be mailed. If payment is received after the cancellation notice has been mailed and before the policy cancels, a $15 late fee will apply. If no payment has been received by the 20th day, the policy will be canceled and a cancellation advice will be sent to any additional insureds and loss payees or mortgagees indicating that the policy was canceled for non-payment. Renewal Billing At renewal, we will bill the insured approximately 35 days prior to the policy expiration date. The insured may pay the full amount or elect to use the installment payment as indicated on the renewal notice. Insureds who pay the entire premium in full will receive a 5% discount. LATE PAYMENT MID-TERM Format Date 12/1/2016 1

2 If payment is not received within 5 days of the payment due date, a cancel notice will be mailed to the insured and agent. If no payment is received 15 days after the cancellation notice is generated, the policy will cancel. A cancellation advice is produced indicating that the grace period is over & coverage has ceased effective the cancellation date. If payment is received after the cancel notice is mailed, but before the cancellation advice is produced, a $15 late fee will apply. RENEWAL If no payment is received by the effective date, the policy will go to a Cancel Pending status. No notice will be generated. To be reinstated, the policy must be written with a new application, policy number, and effective date. There will be no reinstatements with a lapse in coverage. Installment Payment Plan CSE offers an installment payment plan for insureds who do not wish to pay the full term premium at one time. The plan enables the insured to pay in monthly installments. There is a minimum full-term premium of $250 to be eligible for the installment payment plan. Service Charge Billing If the insured wishes to pay by the installment plan, each installment will include a $6 service charge. Any time the first payment is less than the full term premium, we will use the installment plan and the service charge will be added. There is no service charge for electronic funds transfer payments. Civil servants who use EFT will receive a 2% credit. We will automatically bill the insured for the remaining installments, which will be billed in 30 day intervals after the policy effective date, respectively, and will be billed by us 15 days prior to the due date. Installment Late Payment If payment has not been received 15 days prior to the equity date, a cancellation notice will be sent to the insured, any additional insureds, and loss payees indicating that the policy will be canceled for non-payment effective the equity date. Format Date 12/1/2016 2

3 Returned Check Fee If a check to pay the policy is returned to CSE by the bank for insufficient funds, account closed, etc., a fee of $15 will be assessed to the policy. This fee will be assessed to each returned check occurrence. Rounding of the Premium All premiums for coverage must be rounded to the nearest dime. Preparing Applications NOTE: Failure to comply with the guidelines in this section 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: Effective Date 1. Written legibly (preferably, typewritten or computer-generated) 2. Completed in full (all questions answered) 3. Submitted within 10 days of binding. Applications submitted more than 10 days after binding are subject to cancellation 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. Format Date 12/1/2016 3

4 Address The applicant must have a definite and permanent address which is clearly stated on the application in the designated area. If the mailing address differs from the garaging location or is a post office box, the agent must state the reason for the discrepancy, or, in the case of a post office box, indicate the distance from the garaging location to the post office box. Use the remarks section of the application for this information. If the garaging location has no numerical address, clearly specify the location with respect to well-known landmarks or nearby entities which pinpoint locale. Signatures and Dates Cancellation 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 issuing agent. If the named insured is a minor, the application and attachments must also be signed by a parent or guardian of the minor. New Business CSE reserves the right to cancel a new business application for Underwriting reasons at any time within the initial 70-day underwriting period. General underwriting unacceptability includes, but is not limited, to the following: Policy does not meet underwriting criteria. Underwriting information is missing. Material misrepresentation has been made by the insured or agent. CSE does not provide the coverage requested. There is underwriting cause. Policy premium is not submitted within the 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 with a copy to the agent, as required by statute. Unearned premium, calculated prorata, will be returned to the named insured under the same cover. To request reconsideration of a policy canceled within the initial 70-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 Format Date 12/1/2016 4

5 Mid-term 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. Company-Initiated We will cancel a policy mid-term for the following reasons: Non-payment of premium Fraudulent material misrepresentation has been made by the insured or agent in obtaining the insurance Named insured surrenders driving privilege by voluntarily returning his or her driver s license to the DMV The named insured, any person who resides in the same household as the named insured and customarily operates a motor vehicle insured under the policy, or any other person who regularly and frequently operates a motor vehicle insured under the policy: has had their driver s license suspended, revoked, or canceled during the policy period. becomes permanently disabled, either physically or mentally, and such individual does not produce a certificate from a physician testifying to such person s ability to operate a motor vehicle. is or has been convicted during the thirty-six (36) months immediately preceding the effective date of the policy or during the policy period of: Criminal negligence, resulting in death, homicide or assault, arising out of the operation of a motor vehicle Operating a motor vehicle while in an intoxicated condition or while under the influence of drugs Leaving the scene of an accident Making false statements on a driver s license Reckless driving As Permitted under the law Format Date 12/1/2016 5

6 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/state recognized domestic partner, 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 with another policy issued by CSE or another insurance carrier, as evidenced by a declaration page from the new insurance carrier The vehicle is sold at an earlier date, and the insured provides proof of sale The cancellation is pre-approved by the underwriting department 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: Unable to verify valid motor vehicle driving record of any member of the household Non-payment of premium Fraudulent material misrepresentation has been made by the named insured or the CSE agent The agent no longer represents CSE The named insured, any person who resides in the same household as the named insured and customarily operates a motor vehicle insured under the policy or any other person who regularly and frequently operates a motor vehicle insured under the policy who has had: Any of the following within the first policy term: Any at-fault accident Any major violation Format Date 12/1/2016 6

7 Combination of any two or more chargeable citations or at fault accidents in the household within the last 3 years for accounts 6 years or newer. Combination of any three or more chargeable citations or at-fault accidents* in the household within the last 3 years for accounts 7 years or older. *At-fault accident is defined as an accident in which the insured was at least 50% responsible for the accident. Their driver s license suspended, revoked, or canceled during the policy period. Becomes permanently disabled, either physically or mentally, and such individual does not produce a certificate from a physician testifying to such person s ability to operate a motor vehicle. Is or has been convicted during the thirty-six (36) months immediately preceding the effective date of the policy or during the policy period of: Criminal negligence, resulting in death, homicide or assault, arising out of the operation of a motor vehicle Operating a motor vehicle while in an intoxicated condition or while under the influence of drugs Leaving the scene of an accident Making false statements on a driver s license Reckless driving We will notify the agent of our intent to non-renew. This notification will also include the reason(s) for our 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. Reinstatement Payments received after the date of cancellation will be referred to the Underwriting Department for approval. We may decline to reinstate a policy if: Format Date 12/1/2016 7

8 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. The Payment is received more than 30 days after the cancellation date regardless of payment or claim history. If the Underwriting Department agrees to reinstate, such reinstatement will be processed without lapse in coverage. If the Underwriting Department declines reinstatement, the premium will be returned to the insured, and the cancellation will stand. A reinstatement fee of $20 will be assessed for each reinstatement transaction. Spin-Off Policy A spin-off policy is written in the name of an individual previously insured under a current Civil Service Employees Insurance Company automobile policy as a listed driver or named insured. Since these submissions are considered new business, the procedure regarding binding authority and premium collection apply. The policy writing fees will not apply to these policies. If the youthful operator is eighteen or older and the vehicle is registered in his/her name, he/she becomes the Named Insured. If this is not the case, the Named Insured on the originating policy could remain the Named Insured on the Spin-off policy. Transfer or Assignment The transfer or assignment of a policy is generally prohibited. An assignment of a personal auto policy written for a spouse/state recognized domestic partner may be made only when separation, divorce or death leaves only one of the individuals with an insurable interest in the vehicle. 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 12/1/2016 8

9 Policy Fee A policy writing fee of $15.00 will be charged on all new policies, except as noted below: Separation or divorce requires a named insured on an in-force policy to acquire a new policy. Registration of a vehicle requires a named insured on an in-force policy to be the named insured on a new policy. When a policy is declined during the first sixty (60) days, the policy fee is returned in full to the insured. When a policy is canceled by insured s request during the first term, the policy fee is pro-rated using the same pro-rate percentage used against the premium. Eligibility Criteria Program Eligibility We offer 2 distinct programs in which to place automobile risks: Civil Service Employees Program Non-Civil Service Employees Program To qualify for the Civil Service Employees Program plan the named insured must be a current or retired full-time employee of a government unit or a surviving spouse/state recognized domestic partner of same as defined below. DEFINITIONS Full-time Full-Time means working at least 30 hours per week on a permanent basis. Government Unit A government unit is an entity which directly or indirectly receives its authority from federal, state, county, or local laws, or which by custom is associated with these units. A government unit may be the executive, judicial, or legislative branch of the federal or a state government, one of the branches of the military, the National Guard, a federal independent agency such as the U.S. Postal Service, or a county, municipal, or local district government. Government Employee A government employee is any person who is principally employed on a permanent, full- time basis by a government unit in the public service or has retired from such employment. This definition includes a person on active military duty, an elected official, and one who is employed by or retired from such units, or the surviving spouse/state recognized Format Date 12/1/2016 9

10 domestic partner of a government employee. Note: If qualifying named insured or spouse/state recognized domestic partner of named insured is retired, the last position held prior to retirement must have been as a full- time employee of a government unit, as defined above. Operator Eligibility Operator An operator is any licensed person who has access to the named insured s vehicle(s). All persons in the household of driving age must be declared on the application for underwriting purposes. Named Insured The named insured is the individual or spouse/state recognized domestic partner, if a resident of the same household, whose name appears on the declaration page of the policy and is the registered owner of the vehicle. The named insured must be an individual and may not be listed as the name of a corporation or partnership. Driving Record Permanent License Any applicant without a supporting CSE Insurance Group Auto Policy or application in the household must have verifiable driving experience with a valid permanent license issued in Nevada. For drivers residing in Nevada less than six (6) months, see the Operators residing in the state less than 6 months section of the manual for licensing requirements. For drivers who are active military personnel, a valid permanent license issued in the United States or Canada is required. Drivers without third party verifiable driving experience (such as foreign licenses) are not eligible for CSE. Resident members of the household, holding a permit, are considered permissive drivers (if named insureds have given permission to drive an insured vehicle) while driving with a qualified licensed driver. Permit drivers must be added onto the policy as drivers when a permanent license is acquired. Citation and Accident History No operator is eligible for insurance with CSE Insurance Group, if their Motor Vehicle Report (MVR) indicates two or more DMV points, including citations, accidents, or a combination, thereof, within the last three years. In general, accidents and citations carry a DMV point count of 1 and major citations carry a DMV point count of 4. In addition, any operator whose license has been Format Date 12/1/

11 suspended, revoked, or canceled by the DMV within the previous thirty-six (36) months is ineligible for coverage. For new business and accounts 6 years or newer, no household is eligible for insurance with CSE Insurance Group if there is a combination of any two or more chargeable citations or at-fault accidents in the last 3 years between all drivers in the household. Underage Operators Licensed Less Than 3 Years All operators licensed less than three (3) years must meet the following criteria before an agent submits a bound application: 1. Underage operator s parents or legal guardians automobile insurance must be written with CSE at the time of application for insurance 2. Underage operator must reside in the same household as the parents or legal guardian(s) 3. Underage operator must have, at the least, a temporary driver s license Operators Over Age 75 Any application submitted for an operator over age 75 must be accompanied by a completed, current statement of physical condition (either form UNL 7 or the Acord 92 medical statement). Operators residing in the state less than 6 months All of the following criteria must be met before an application may be bound for an applicant who has resided in the state less than six (6) months: An occupation or profession which does not require frequent change of mailing and/or garaging address An automobile liability policy currently in- force in the applicant s own name A temporary Nevada operator s license, and the applicant s previous outof-state license number. Vehicle Eligibility Rules Vehicles must: be a private passenger vehicle (see definition of private passenger vehicle); Format Date 12/1/

12 be registered in the United States; be registered solely to the named insured or spouse/state recognized domestic partner of the named insured; not be rented to others; not be used in the course of employment (as defined in Business Use under Definitions in this section); not be used as a residence. Definitions Private Passenger Vehicle A Private Passenger Vehicle is defined as a 4-wheel land motor vehicle which is licensed for use upon public roadways. Private passenger vehicles include the following types: Private passenger automobiles, vans, pick-ups, jeeps and panel trucks with a load capacity of 1 ton or less for personal usage, as defined under Pleasure Usage in this section. Motor homes up to 6 wheels (see Motor homes in the Underwriting Guidelines section of this manual) Trailers including a home trailer, travel trailer, camping trailer, horse trailer, or utility trailer (see Trailer in the Underwriting Guidelines section of this manual) Salvage Vehicle Salvage vehicle means a vehicle, other than a non-repairable vehicle, of a type subject to state vehicle registration that has been destroyed or severely damaged to such an extent that the owner, financial institution, or insurance company that insured the vehicle considers it uneconomical to repair, and because of this, the vehicle is not repaired at the time of the event resulting in damage. Vehicles registered as Salvage must have an inspection, photos, and a certified mechanical statement showing that the vehicle meets all safety regulations. Pleasure Usage Pleasure means personal use, including driving to and from work or school: Less than three (3) miles, one way, or Format Date 12/1/

13 Three (3) or more, but less than fifteen (15), miles one way for not more than two (2) days per week or not more than two (2) weeks in a five (5) week period. Work Less than 15 Miles Work Less than 15 Miles means personal use including driving to or from work or school: Three (3) or more, but less than fifteen (15) miles one way if such usage is more than two (2) days per week or more than two (2) weeks in any five (5) week period, or Fifteen (15) or more miles one way for not more than two (2) days per week or more than two (2) weeks in any five (5) week period. Work 15 Miles or More Work 15 Miles or More means personal use including driving to or from work or school: Fifteen (15) or more miles one way more than two (2) days per week or more than two (2) weeks in any five (5) week period, and Shall not be customarily used or required for business. Business Use Use of vehicle required for any business, occupation, or profession, including service, livery, retail, commercial, or emergency usage. Business Usage is not eligible for CSE, with the possible exception of sales usage (see NOTE below). NOTE Sales usage may be eligible if the vehicle is used for the transportation of an individual in the course of his or her employment or profession, other than driving to and from work at a single, fixed location. Qualifying professions would include, but are not limited to, insurance agents, realtors, sales representatives, consultants, and attorneys. If agent is unclear about eligibility, submit the risk for approval to Underwriting prior to binding. Farm Usage Farm usage means the automobile is principally garaged on a farm or ranch, and Format Date 12/1/

14 The automobile is not customarily used in going to and from work, other than farming or ranching, and The automobile is not customarily used in any occupation other than farming or ranching. NOTE Farm usage may not be bound by the agent. All risks requiring a Farm use rate must be submitted to CSE Underwriting for approval. Please see the Submit for Approval section of this manual. Restriction of Physical Damage Coverage No Physical Damage coverage may be written on vehicles with: Existing body or glass damage* Vehicles principally garaged in geographic areas of high windstorm, hail, or sandstorm exposure may not be written for comprehensive coverage unless permanently garaged in a completely enclosed structure Vehicles principally garaged in known areas of high incidence of automobile theft and vandalism may not be written for Comprehensive coverage unless permanently garaged in a fully enclosed structure * Must be submitted non-bound for underwriting approval Coverage and Limits Available Coverage Combination Rules Uninsured and Underinsured Motorist Bodily Injury coverages must be written together and at the same limits and may not be written unless Bodily Injury and Property Damage Liability coverages are also written. Bodily injury and Property Damage Liability coverages must be written together. Neither Medical Payments nor Physical Damage coverage may be written unless Bodily Injury and Property Damage Liability coverages are also written. Collision coverages must be written in conjunction with Comprehensive coverage. Roadside Assistance coverage may be written on any vehicle. It will be included unless rejected. Format Date 12/1/

15 Rental Reimbursement coverage must be written in conjunction with Collision coverage. Automobile and Trailer Liability Coverage Limits Available BI 25/50 50/ / / / /1000* PD Med Pay 1,000 2,000 5,000 10,000 25,000 UM and UIM 15/30 25/50 50/ / / / /1000* * must be submitted non-bound for approval by the company. Automobile Physical Damage CSEICO Coverage Limit $ Comprehensive ACV ,000 2,000 Collision ,000 2,000 Roadside Assistance 100 Miles for towing Rental Reimburse 30 per day, 450 maximum 40 per day, 600 maximum 50 per day, 750 maximum NOTE: Roadside Assistance is limited to 3 occurrences per 6 month term or 6 occurrence per 12 month term per vehicle. Motor Home Liability Coverage Limit $ BI 25/50 50/ / / / /1000* PD Med Pay 1,000 2,000 5,000 10,000 25,000 UM and UIM 25/50 50/ / / / /1000* * must be submitted non-bound on a referral basis. Motor Home Physical Damage CSEICO Coverage Limit $ Comprehensive 300 Collision 300 Trailer Physical Damage CSEICO Coverage Limit $ Comprehensive 100 Collision 100, 200 Format Date 12/1/

16 Agent Binding Authority An agent has the authority to bind risks in accordance with this underwriting manual. The maximum limits listed in the Coverages Available section must be observed. Risks for which the agent is unclear regarding the eligibility should be submitted non-bound. Ineligible List Drivers with Motor Vehicle Records (MVR) indicating two or more CSE points, including citations, accidents, or a combination, thereof, within the last 36 months Drivers without third party verifiable driving experience (such as foreign licenses) Underage operators licensed less than 3 years with no supporting CSE auto policy issued in the name of the parent or legal guardian of the underage operator Private passenger vehicles including Pick-Up trucks with a load capacity over 1 ton, 3 tons maximum gross laden weight. Gross laden weight includes gross weight of vehicle (vehicle weight including all fluids) and load capacity of vehicle (carrying capacity). Vehicles used for business (see the Business Use definition under the Vehicle Eligibility section of this manual) Vehicles with symbol 29 or greater ($100,000+). Includes motor homes. Vehicles with existing damage Buses, trucks, or automobiles converted to motor homes Vehicles not licensed for street usage Vehicles and motor homes rented to others Motor homes with more than 2 axles or more than 6 wheels Non-owner policies Homemade (non-manufactured) motor homes Auto policy without an accompanying CSE homeowner policy Auto policy without at least one car with comprehensive and collision coverage Format Date 12/1/

17 Submit for Approval Request for material damage coverage on a vehicle with existing physical damage An altered or specially built car. (See Underwriting Guidelines section of this manual.) A gray market vehicle. (See Underwriting Guidelines section of this manual.) Farm usage A vehicle over 15 years old for which material damage coverage is requested, and the vehicle does not normally qualify as an antique or stated value coverage policy A stated amount vehicle with a value exceeding $10,000 (see Stated Value portion of the Underwriting Guidelines section of this manual.) Underage operators licensed less than 3 years (see the Operator Eligibility section of this manual for required documentation and binding authority) Applicant s residing in the state less than 6 months (see the Operator Eligibility section of this manual for required documentation and binding authority) Non-Bound Submission Procedure An agent may not bind an applicant who does not qualify for coverage per 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 If Underwriting approves the application for binding, Underwriting will return the original application to the agent requesting the premium and an effective Format Date 12/1/

18 Inspection Criteria date. To assure prompt handling, the agent should forward the application, premium, and underwriting memo of acceptance through the normal new business submittal process. An agent is required to personally inspect the vehicle or trailer for which coverage is being requested, prior to binding. Inspections completed by certified automobile inspection companies are eligible when submitted with the application. The inspection should include a visual verification of existing damage and clearly show the vehicle identification number (VIN), to verify that this number matches the number listed on the application and the vehicle registration. Required Attachments Photograph and Inspection Criteria Photographs include: One photo of the front and left side and a second of the rear and right side. The photographs must be close enough for us to properly evaluate the vehicle for possible prior damage and roadworthiness. Inspection includes: Completion of form G.2440A 9/00 or a comparable vehicle inspection form. The photographs and inspection must be received within 5 days of the uploaded application. New Business Physical Damage requested on a vehicle previously insured as liability only Salvage vehicle Items Required Photos and Inspection Photos, Inspection and Certified Mechanical Statement Additional/Replacement Vehicle Salvage vehicle Items Required Photos, Inspection and Certified Mechanical Statement All applications for operators over 75 years of age must be accompanied by a completed, current statement of physical condition. Format Date 12/1/

19 Underwriting Guidelines Driver Rating Driver Classification Rating Code The rating factor is based on the driver, vehicle usage, and driving record. A Driver Classification Rating Code is used to represent the rating factor and is comprised of a six (6) digit code consisting of the following information: 1st digit: 8 represents Private Passenger Vehicles 9 represents Trailers 2nd and 3rd digits: Represents driver classification 4th digit: Vehicle usage classification 5th digit: Multi-car and Sportscar indicator 6th digit: Accident/Citation surcharge code Classification Code Tables Driver Classifications Summary The following tables list the driver classifications and the codes which are used in the 2nd and 3rd digit fields of the 6-digit Driver Classification Rating Code. Adult Drivers Classification Operator Age Code 76 or over Principal Format Date 12/1/

20 All others 87 Youthful Drivers Single Female NOT Owner/Principal Operator Owner/Principal Operator Age Without Driver With Driver Without Driver With Driver <= Adult Adult Adult Adult Single Male NOT Owner/Principal Operator Owner/Principal Operator Age Without Driver With Driver Without Driver With Driver <= Adult Adult Married Male NOT Owner/Principal Operator Owner/Principal Operator Age Without Driver With Driver Without Driver With Driver <= Adult Adult Adult Adult Vehicle Usage Classifications Summary The usage classification code is the 4th digit of the 6-digit Driver Classification Rating Code. The codes for adult and youthful drivers are as follows: Format Date 12/1/

21 Adults Vehicle Usage Code Pleasure 1 Drive to/from work less than 15 miles 2 Drive to/from 15 or more miles 3 Business 8 Farm 9 Youthful Drivers Unmarried Female Pleasure/Farm Usage NOT Good Student Good Student Age Without Driver With Driver Without Driver With Driver <= Adult Adult Adult Adult To and From Work/Business Usage NOT Good Student Good Student Age Without Driver With Driver Without Driver With Driver <= Adult Adult Adult Adult Unmarried Male Pleasure/Farm Usage NOT Good Student Good Student Age Without Driver With Driver Without Driver With Driver <= Age To and From Work/Business Usage NOT Good Student Good Student Without Driver With Driver Without Driver With Driver Format Date 12/1/

22 <= Unmarried Male (25-29) Owner/Principal Operator Usage NOT Good Student Good Student Pleasure/Farm 8 8 To/From Work and Business 9 9 Married Male Pleasure/Farm Usage NO Good Student Good Student Age Without Driver With Driver Without Driver With Driver <= Adult Adult Adult Adult To and From Work/Business Usage NO Good Student Good Student Age Without Driver With Driver Without Driver With Driver <= Adult Adult Adult Adult Multi-car and Performance Vehicle Classifications This code is the 5th digit in the 6-digit Driver Classification Rating Code. Performance Single-Car Multi-Car Standard 1 2 Intermediate 3 4 High 5 6 Sport 7 8 Premium Sport 9 0 Format Date 12/1/

23 Accident and Citation Surcharge Classifications This code is the 6th digit in the 6-digit Driver Classification Rating Code. Number of Chargeable Code Cities/Accidents Driver Classification System The driver classification system incorporates the following criteria in determining the appropriate factor to be used in rating drivers: Number of years of driving experience: The number of years any principal or occasional driver of the vehicle has had a permanent license to drive a vehicle. The driving record of each driver must be verifiable by CSE Principal or occasional usage of the vehicle: Principal Usage is defined as any person who drives the vehicle at least 50% of the vehicle s total annual mileage; Occasional Usage is defined as any person who has access to the vehicle but drives the vehicle less than 50% of the vehicle s total annual mileage Gender: Male or Female Marital Status: Unmarried or married. (Married includes legally separated, divorced, widowed or state recognized domestic partner.) Driver. For eligibility criteria, refer to driver training discount in the policy discounts section. Good student status. For eligibility criteria, refer to Good Student Qualifications in this section. The rating factor for each vehicle shall be the factor applicable to the highestrated driver assigned to that vehicle, based on the criteria listed above. To determine the highest-rated driver of each vehicle, determine the factor for each driver of that vehicle and then select the highest rating factor to be used in rating that vehicle. For additional driver assignment rules, see the Assignment of Drivers section in this manual. Format Date 12/1/

24 Good Student Qualifications 1. The driver is between 16 and 24 years of age and is a full-time (at least 12 units) high school junior or senior, college, or university student. 2. On the anniversary date of the policy a school official presents us with a statement certifying that the driver has met any one of the following conditions during the immediately preceding school semester: The driver was in the upper 20% of his or her class scholastically. The driver maintained at least a B average or its equivalent in an A, B, C, D letter grading system. The driver maintained at least a 3.0 grade point average in a 4, 3, 2, 1 point grading system. The driver was on the Dean s List, Honor Roll, or comparable roster signifying scholastic achievement. Assignment of Drivers Do not assign a driver to a motor home, trailer, or antique vehicle. Assign a driver to a private passenger vehicle, pickup, or van according to the following rules: Assign each driver to a vehicle as a rated driver until there are no more drivers or vehicles. Assign only one rated driver per vehicle. Assign drivers in the order of the highest rated driver (based on the rating factors for number of years licensed, gender, marital status, and principal or occasional use) to the lowest rated driver. Assign a driver (including an occasional driver) to the vehicle he or she primarily drives. If you have already assigned another driver to that vehicle, assign the driver in question to the vehicle he or she drives the second most often. If there are more drivers than vehicles, do not assign an excess driver as a rated driver to any vehicle. However, use that driver s MVR activity to rate a vehicle primarily driven by that driver. If there are more vehicles than drivers, apply the All-Other rating factor to all excess vehicles. Format Date 12/1/

25 Inexperienced Operator Surcharge A vehicle operated principally or occasionally by a driver who has been licensed for less than three (3) years will be subject to an Inexperienced Operator Surcharge. The surcharge is applied to Bodily Injury, Property Damage, and Collision coverages only. Years of Driving Rating Factors Experience BI/PD Collision or more Financial Stability Factor Tier Factor No Score 0.00 No Hit Refer to U/W Insureds may qualify for an exception to the financial stability factor if their insurance score was directly influenced by any of the following extraordinary life events: Catastrophic event (as declared by the federal or a state government); Death of a spouse, child or parent; Divorce or involuntary interruption of legally owed alimony or support payments; Identity theft; Military deployment overseas; Format Date 12/1/

26 Serious illness or injury to you or to an immediate family member; Temporary involuntary loss or termination of employment for three months or more; Other events, as determined by the insurer. Supporting documentation will be required in order to be considered for this exception. Named Driver Exclusion (Endorsement A340STO) In certain circumstances, exclusion endorsements are used to exclude a specified driver from the policy. No exclusion endorsement may be applied to, or deleted from, a policy without the prior approval of the Underwriting Department. Exclusion endorsements may not be applied to the following situations: New Business To exclude a spouse/state recognized domestic partner To exclude a driver under age 18 To exclude an operator from a specific vehicle To exclude a specific coverage In-force business with less than five (5) continuous years with CSE In the situations above, it will be necessary to cancel or non-renew the policy. A named driver exclusion must: Be initiated by the named insured in writing, to include the named insured s signature Include full and complete application information for the driver(s) being excluded from coverage A named driver exclusion ceases to provide insurance normally afforded by the policy to the named insured, any other insured, the driver(s) being excluded, or any third party claimant with respect to any claim arising from accidents which occur while any motor vehicle is being operated by the excluded driver named in the exclusion endorsement. The exclusion becomes effective when the excluded driver signs the Exclusion of Named Driver form. Underwriting approval of the named driver exclusion is required. Format Date 12/1/

27 Vehicle Rating Performance Vehicle Surcharges Any vehicle designated as a performance type vehicle will receive a surcharge when covered on a policy. We use performance codes determined by CSE, but exempt certain 4 door sedans that are not sport tuned vehicles. Examples of sport tuned vehicles include: Mercedes AMG BMW M3 & M5 Audi S6 Subaru VR Multi-Car Rating Factors Apply to Bodily Injury and Property Damage Liability, Comprehensive, and Collision coverages. Apply to Medical Payment, Uninsured Motorist and Underinsured Motorist coverages. Motor Home Coverage Restriction Coverage for a motor home will be provided only in conjunction with a CSEICO automobile policy insuring at least one private passenger vehicle. Definition Motor Home is defined as a self-propelled vehicle equipped for use as living quarters (including facilities for plumbing, dining, cooking, refrigeration, and sleeping). A motor home usually has one of the following sets of characteristics: Single-unit construction, self-contained with an integral power plant built on or adapted to a truck chassis with a stated load capacity of 1,500 lb. or more; or Format Date 12/1/

28 A permanently attached camper or single-unit construction, selfcontained, built on or adapted to a truck chassis with a stated load capacity of 1,500 lb. or more. Ineligible A van body which has been converted into a camper by the use of additional equipment shall not be considered a motor home. The applicable truck or private passenger rates will apply. Buses, trucks, or automobiles covered by motor homes do not qualify. Motor homes rented to others are not eligible for coverage. Motor homes with more than 2 axles or more than 6 wheels are not eligible. Rating Trailer Motor homes with symbol 29 or greater ($100,000). Comprehensive Coverage Motor Home Comprehensive coverage is available at a rate per $1000 of coverage. Rates are semi-annual. A $300 deductible applies. Premium is determined by the cost new of the Motor Home. Collision Coverage Motor Home Collision coverage is available at a rate per $1000 of coverage. Rates are semi-annual. A $300 deductible applies. Premium is determined by the cost new of the Motor Home. NOTE Motor homes are ineligible for the multi-car discount and may not be used to qualify a private passenger automobile for the multi-car discount. Coverage Restriction Coverage for trailers will apply only in conjunction with a CSEICO automobile policy. Format Date 12/1/

29 Definition A Trailer is a vehicle designed to be towed by a private passenger type automobile, pickup, or van. A trailer may be a utility home trailer, camping trailer, horse trailer, or travel trailer. Note: A boat trailer must be written as part of a CSEICO boat policy. Coverages Liability Coverage Bodily Injury, Property Damage, and Medical Payments coverages are automatically extended to the trailer, without additional premium, by the coverage afforded to the insured s automobile(s). The trailer need not be specifically described in the policy. MAJOR EXCLUSIONS Liability coverages on trailers is not provided for the following: Any trailer used for business or commercial purposes Any trailer used as an office, store, display, or passenger trailer Any trailer used as a permanent residence Physical Damage Coverage The following Physical Damage coverages are available on trailers: Comprehensive Coverage ($100 deductible) Collision Coverage ($100 deductible) Rating Liability Coverage Liability Coverage is automatically extended from the private passenger automobile policy without additional premium. Physical Damage Coverage Comprehensive Coverage ($100 deductible) Premiums are determined at a rate per $100 of the cost new of the trailer, subject to a minimum premium of $ Format Date 12/1/

30 Collision Coverage ($100 or $200 deductible) Premiums are determined at a rate per $100 of the cost new of the trailer, subject to a minimum premium of $ Stated Value Coverage (Endorsement F.30350A STO) Definition Stated Value Coverage means insuring the vehicle at a specified dollar amount, as determined by an appraisal, for Physical Damage Coverage. Stated Value Coverage must include both Comprehensive and Collision coverages. Note: We pay up to the stated value of the vehicle but do not exceed the vehicle s ACV. Eligibility Eligible Vehicle A private passenger automobile, van, pick-up, jeep, or panel truck which is over 15 years old Any private passenger vehicle classified as classic, special interest, limited production or antique (assuming it does not meet the antique automobile coverage criteria listed in this section of the manual). An altered vehicle, specially built vehicle, or kit car as defined in the Altered, Specially Built, or Kit Car Vehicles section of this manual A highly customized vehicle (paint, detailing, etc.) which is licensed for street usage Collateral Business Requirement New business stated value submissions will be considered only if all vehicles in the household are written. No collateral business required for existing policyholders. Photograph Requirement Each stated value submission must be accompanied by at least 2 photographs. One should be a front shot taken at an angle that presents a front and side view of the car. The second should be a back view taken at such an angle as to include the other side of the car not shown in the front view. Format Date 12/1/

31 Appraisals An appraisal less than 2 years old is required on all vehicles. If the requested amount of coverage is more than $10,000, only a professional automobile appraisal will be accepted. An appraisal on a vehicle in this value range submitted by any other source is not acceptable. Appraisals by automobile dealerships on vehicles valued at $10,000 or less will be accepted. The individual completing the appraisal should be a dealer who specializes in the sale of classic, antique, and older vehicles of unusual value. Note: Vehicles valued at more than $10,000 must be submitted non-bound for prior review. Coverage will be bound only with the approval of Underwriting (See Submit for Approval section of this manual). In all cases we and the applicant must agree on the dollar amount of the stated value coverage. Deductibles Rating A mandatory $100 deductible will apply to Comprehensive Coverage, and a $300 deductible will apply to Collision. No other deductible options are available. Comprehensive Coverage Stated Value Comprehensive coverage is available at a rate per $100 of coverage. Rates are semi-annual. A $100 deductible applies. Collision Coverage Stated Value Collision coverage is available at a rate per $100 of coverage. Rates are semi-annual. A $300 deductible applies. Antique Automobile Coverage (Endorsement A345STO) Definition An antique automobile is defined as a private passenger automobile or pick-up truck that is 25 years or older and is maintained solely for use in exhibitions, club activities, parades, and other similar functions of public interest. An antique automobile shall not be used primarily for commute or the Format Date 12/1/

32 transportation of passengers at any time. A discounted rate is provided because of the very limited usage of the vehicle on any public roadway. To qualify for the Antique Automobile Coverage, the vehicle shall not be driven more than 5,000 miles a year. Coverages and Rating Liability Bodily Injury and Property Damage coverages may be written at 30% of the rates otherwise applicable. UM and UIM coverages are written at the full rate applicable. Medical Payments coverage is not available. Physical Damage Coverage Comprehensive and Collision coverages are available on a stated value basis only. Note No classification factor, discount, or surcharge is applicable to Antique vehicles. Altered, Specially Built, or Kit Car Vehicle Definitions Altered Vehicle An altered vehicle has had any of the following done: The suspension system raised or lowered substantially The steering geometry changed The engine or the drive train modified for the purpose of increasing speed or acceleration The body or chassis modified from the original design of the manufacturer (e.g.: the top of a vehicle removed for conversion to a convertible) Specially Built Vehicle Vehicle which has been altered or specially-built to include changes in fenders, body panels, running boards, scoops, and other customizing features. Format Date 12/1/

33 Kit Car Vehicle which has been assembled from a kit, rather than by the manufacturer. Eligibility Rating An altered, specially built, or kit car vehicle which has had any of the abovementioned modifications performed which alone or in combination exceed 25% of the original vehicle s list price. For purposes of determining eligibility, these vehicles must be submitted for approval to Underwriting, and may be written only for Good Drivers. These vehicles must be rated on a Stated Value Coverage basis. Gray Market Vehicle Definition A vehicle which is not specifically designed or assembled by the manufacturer for export and registration in the United States. Federal emissions and safety requirements have not been completely met or are non-existent through alterations by the gray market dealer or individual importing the vehicle. Vehicles designed specifically for export to the U.S. by the manufacturer contain a safety certification label which is attached to the left front door pillar. This safety certification label is not present on vehicles classified as gray market. Eligibility Some of the more common gray market vehicles imported into the United States through a means other than the manufacturer s authorized dealer network may be identified by verifying the vehicle identification numbers (VIN) listed below: Audi, Porsche, Volkswagen (All Models) The VIN on a gray market vehicle contains the letter Z in either the 4th, 5th, 6th, or 9th positions. Example: Gray Market: WDBZEP491 U.S. Market: WDBOAB391 Format Date 12/1/