HERITAGE PROPERTY & CASUALTY INSURANCE COMPANY

Transcription

1 HERITAGE PROPERTY & CASUALTY INSURANCE COMPANY Underwriting Guidelines and Rating Manual 9/1/2015 Voluntary HO3 Program

2 I. ELIGIBILITY/UNDERWRITING TABLE OF CONTENTS A. Ineligible Risks...UW-1 B. Occupancy/Use...UW-2 C. Roof...UW-2 D. Plumbing System...UW-2 E. Age of Home at New Business Water Damage Coverage...UW-2 F. Townhouse/Rowhouse...UW-2 G. Unusual or Excessive Liability Exposure...UW-2 II. BINDING AUTHORITY A. General...BA-1 B. Prior Insurance...BA-1 C. Binding Suspension Due to Catastrophes...BA-1 D. Previous Cancellations/Non-Renewals...BA-1 E. Binding Authority Limits...BA-1 III. GENERAL RULES A. Policy Term...GR-1 B. Renewal Plan...GR-1 C. Cancellation or Reductions in Limits...GR-1 D. Multiple Company Insurance...GR-1 E. Transfer or Assignment...GR-1 F. Single Building Definition...GR-1 G. Protection Class Information...GR-1 H. Construction Definitions...GR-2 I. Mandatory Endorsements...GR-2 J. Waiver of Premium...GR-3 K. Premium Rounding...GR-3 L. Annual Dwelling and Other Structures Coverage Adjustment...GR-3 IV. PREMIUM CALCULATION A. General...PC-1 B. Amount of Insurance...PC-1 C. Age of Dwelling...PC-2 D. Total Renovations...PC-2 E. Protection Class/Construction...PC-2 F. Building Code Effectiveness Grading...PC-3 G. Premium Factors / Non-Hurricane Base Rate...PC-4 H. Premium Factors / Hurricane Base Rate...PC-6 4/1/2015 Voluntary HO3 Program TOC-1

3 PREMIUM CALCULATION (cont) V. COVERAGE OPTIONS A. Deductibles...CO-1 B. Windstorm or Hail Exclusion...CO-1 C. Water Damage Exclusion...CO-1 D. Hurricane Screen Enclosure and Carport Coverage...CO-2 E. Coverage B Other Structures...CO-2 F. Coverage C Contents...CO-3 G. Increased Section II Liability and Medical Payments Limits...CO-3 H. Personal Injury Coverage...CO-3 I. Ordinance or Law Coverage...CO-3 J. Increased Replacement Cost on Dwelling...CO-4 K. Personal Property Replacement Cost Coverage...CO-4 L. Special Personal Property Coverage...CO-4 M. Coverage C Increased Special Limits of Liability...CO-4 N. Personal Property- Scheduled...CO-5 O. Loss Assessment Coverage...CO-5 P. Limited Fungi (Mold), Wet or Dry Rot, or Bacteria Increased Coverage...CO-6 Q. Limited Water Damage Coverage...CO-6 R. Home Computer Coverage...CO-6 S. Sinkhole Coverage...CO-6 T. Golf Cart Physical Damage & Liability Coverage...CO-7 U. Dog Liability Coverage...CO-8 V. Water Back Up and Sump Overflow...CO-8 W. Additional Insured...CO-9 X. Additional Interest...CO-9 Y. Identity Theft Expense and Resolution Services Coverage...CO-9 Z. Platinum Preferred (Repair Program Company Option)...CO-9 AA. Equipment Breakdown Coverage...CO-10 BB. Service Line Enhancement Endorsement...CO-10 CC. Pillar Enhanced Coverage Endorsement...CO-10 DD. Mini-Farm Endorsement...CO-11 EE. Permitted Incidental Business Occupancies Residence Premises...CO-14 VI. PAYMENT OPTIONS A. Full Pay...PO-1 B. Semi-Annual Payment Plan...PO-1 C. Quarterly Payment Plan...PO-1 D. 11 Payment Plan...PO-1 E. Credit Cards...PO-1 F. E-Policy (Paperless) Discount...PO-1 G. Additional Fees...PO-1 H. NSF Checks...PO-1 I. Commissions...PO-1 J. MGA / EMPATF Fees...PO-1 VII. TERRITORY BASE RATES....BR-1 to 8 VIII. TERRITORY DEFINITIONS BY ZIP CODE.....TDZ-1 to 5 IX. PREMIUM CALCULATION WORKSHEET...PCW-1 to 2 X. APPENDIX A WLM CREDITS FOR EXISTING CONSTRUCTION...APX A 5/15/2015 Voluntary HO3 Program TOC-2

4 XI. APPENDIX B WLM CREDITS FOR NEW CONSTRUCTION....APX B 5/15/2015 Voluntary HO3 Program TOC-3

5 I. ELIGIBILITY UNDERWRITING A. INELIGIBLE RISKS 1. Porches or decks more than 2 ft. off the ground or with 3 or more steps leading to them must be protected with properly installed handrails. 2. Homes with open foundations. 3. Factory fabricated, transportable housing units built on a chassis (mobile or manufactured homes). Note: Homes with components constructed off-site and assembled on-site which are subject to local and state building codes are acceptable. 4. Properties located entirely over water. 5. Risks with any prior or current Sinkhole activity on the premises whether or not it results in a loss to the dwelling. 6. Homes of unconventional construction including but not limited to Log Homes. 7. Homes with wood shingled roofs. 8. Homes without permanently installed heat source or with wood burning stoves, space heater or fireplaces as primary source of heat. 9. Properties in a state of disrepair or properties with existing damage. 10. Risks with Knob & Tube electrical wiring, or aluminum electrical wiring, or fuses. 11. Risks with rental exposure. Note: A duplex, wherein one side is owner-occupied and the other side is rented is acceptable. 12. Risks insured for less than 100% replacement cost. 13. Homes with Incidental Occupancies other than those permitted under Permitted Incidental Occupancies- Residence Premises rule or homes used for any purpose other than residential. 14. Vacant or unoccupied homes. 15. Swimming pools that are not protected by a locking fence at least 4 ft. high or screened enclosure. Fence or wall must be a permanent installation constructed of material that provides a reasonable barrier to entry as determined by Heritage (e.g. chain link, wood, steel, aluminum). 16. Spas that are not covered and locked. 17. Risks with a previous property loss (whether or not paid by insurance) in the past 3 years at this or any other location - other than 1 water or 1 Act of God loss (wind, hail, hurricane, lightning) provided the amount of loss is less than $10, Risks with a previous liability loss (whether or not paid by insurance) in the past 3 years at this or another location. 19. Risks with vicious or exotic animals. Vicious animal is defined as any animal, regardless of breed, that has a negative history including, but not limited to, biting, snapping, or causing or attempting to cause injury to an individual or other animal. Saddle animals are permitted when there is no business use. 20. Homes constructed from Exterior Finish Insulation System (EFIS) type material or synthetic stucco. 21. Dwellings in the course of construction unless the dwelling is expected to be occupied within the next 30 days. 22. Dwellings located in Protection Class 10 or isolated, remote, or inaccessible risks. 4/1/2014 Voluntary HO3 Program UW-1

6 23. Properties located on a farm, ranch, orchard or grove or where commercial farming or ranching operations take place unless the risk is eligible for and has added the Mini-Farm endorsement. B. OCCUPANCY/USE 1. The one or two family residence must be occupied by the owner and contain not more than 2 families and with not more than two boarders or roomers per family. a. Primary occupied on a primary basis. b. Secondary/Seasonal a dwelling unoccupied for more than 3 months per one year period is considered seasonal/secondary. c. Permitted Incidental Occupancies Residence Premises Certain office occupancies incidental to the dwelling are permitted provided: 1. the premises is occupied principally for dwelling purposes; and 2. there is no other business conducted on the premises; and 3. there are no employees, no customers, limited inventory up to $2500, no laboratory, no construction type tools, etc. 2. Properties with Home Day Care exposure are eligible for this program with evidence of commercial liability coverage and a copy of the State or County Home Day Care license. These documents must be provided each year prior to renewal. C. ROOF Roof must be in good condition. Composition shingle roofs must have been replaced within 15 years. D. PLUMBING SYSTEM Risks with polybutylene and/or galvanized steel pipes may only be written with the water damage exclusion. E. AGE OF HOME AT NEW BUSINESS / WATER DAMAGE COVERAGE Homes over 40 years of age may be written with either limited water damage coverage (HPCHO 09 LWD) or excluding water damage coverage (HPCHO 09 WD). F. TOWNHOUSE / ROWHOUSE 1. Each unit must be separated by parapet walls or adequate masonry firewalls. 2. There may be a maximum of 8 units per building. G. UNUSUAL OR EXCESSIVE LIABILITY EXPOSURES Risks with the following items are not acceptable for coverage. Bodily injury and property damage liability are excluded for injuries or damage resulting from their use. Underwriting action, up to and including cancellation, will be taken if any of these items are found to be present: 1. Trampolines; 2. Skateboard Ramps; 3. Bicycle Ramps; 4. Swimming pool slides; 5. Swimming pool diving boards; and 6. All Terrain Vehicles (ATV's). Endorsement HPCHO 09 ELE Unusual or Excessive Liability Exposure applies and is attached to all policies. 6/27/2014 Voluntary HO3 Program UW-2

7 Additional underwriting guidelines apply to specific endorsements or optional coverages and are contained in the Coverage Options section of this manual. 6/27/2014 Voluntary HO3 Program UW-3

8 II. BINDING AUTHORITY A. GENERAL 1. Application must be maintained in Agent s office and is subject to audit at request of the Company. 2. Risk must meet the Eligibility/Underwriting guidelines. 3. Risk must fall within our binding authority limits. 4. Risks may be written up to 60 days future effective. 5. Heritage Property & Casualty Insurance Company is not required to provide coverage in excess of 100% replacement cost to satisfy mortgage lending requirements per Florida Statute and F.A.C. Rule 69O B. PRIOR INSURANCE / LAPSE IN COVERAGE 1. Risks with no proof of prior insurance or a lapse in coverage of over 30 days will be written with a 10% surcharge. 2. If the risk is a new purchase, there is no proof of prior insurance requirement. C. BINDING SUSPENSION DUE TO CATASTROPHES 1. No applications for new business or endorsements for increased coverage may be bound, written or issued when binding is suspended. Exceptions for previously scheduled closings may be submitted to Underwriting for binding approval. Agents will be notified by bulletin and via our website when binding has been suspended and when the suspension is lifted. 2. Binding may be suspended for the following reasons: Tropical Storm, Hurricane, Wildfire and Other Catastrophe. D. PREVIOUS CANCELLATIONS / NON-RENEWALS Risks previously canceled for reasons other than reduction of hurricane exposure must be referred to the Company before binding. E. BINDING AUTHORITY LIMITS / PROGRAM DESCRIPTION Coverage HO-3 A - Dwelling $100,000* to $1,000,000** B - Other structures C - Contents D - Loss of Use 0% to 70% of Coverage A Up to 75% of Coverage A 10% of Coverage A E - Personal Liability $100,000 to $500,000 F - Medical Payments $1,000 to $5,000 * $125,000 minimum Coverage A in coastal counties. ** Risks exceeding binding limits may be submitted to Underwriting for approval. Please contact the Underwriting Department after you have fully completed an application in our processing system. Additional documentation such as an appraisal may be required. Please allow at least 10 days for the high value process. 4/1/2014 Voluntary HO3 Program BA-1

9 III. GENERAL RULES A. POLICY TERM The standard policy term is one year and may be extended for successive policy periods by renewal. B. RENEWAL PLAN If the company elects to offer renewal, policy may be renewed by the policyholder by paying the renewal premium prior to the expiration of the current policy. Renewal policy will be issued based on the premiums, forms and endorsements in effect at time of renewal. A new declaration page will be issued. C. CANCELLATION OR REDUCTIONS IN LIMITS OF LIABILITY OR COVERAGE 1. Mandatory coverages may not be canceled unless the entire policy is canceled. 2. If insurance is increased or reduced, the additional or return premium shall be computed on a prorata basis. 3. The insured may cancel the policy at any time for any reason. We will refund any unearned premium pro rata. 4. A partial sinkhole loss, 1 water damage loss or property losses that are a result of an Act of God will not be used as a cause for cancellation or non-renewal unless the insured has failed to take action reasonably necessary to prevent recurrence of damage to the insured property. D. MULTIPLE COMPANY INSURANCE We will not provide coverage for a dwelling that is also covered by another insurance policy. E. TRANSFER OR ASSIGNMENT No transfers or assignments are permitted. Each insured and/or property will require submission of a new application. F. SINGLE BUILDING DEFINITION All buildings or sections of buildings that communicate through unprotected openings shall be considered as a single building. Buildings that are separated by space shall be considered as separate buildings. Buildings or sections of buildings, which are separated by a 6-inch reinforced concrete or 8-inch masonry party wall that pierces or rises to the underside of the roof and pierces or extends to the inner side of the exterior wall, shall be considered a separate building. Accessibility between buildings with independent walls or through masonry party walls described above shall be protected by at least a Class A Fire Door installed in a masonry wall section. G. PROTECTION CLASS INFORMATION The Protection Class listings in the Public Protection Classification Manual apply. Use PC 10 for unclassified areas. In a classified area where two or more classifications are shown (e.g. 6/9), the classification is determined as follows: Miles to Fire Station Feet to Hydrant Class Less than 5 Less than 1,000 first PC Less than 5 More than 1,000 9 More than /1/2014 Voluntary HO3 Program GR-1

10 Protected Subdivision Rule: A dwelling located in a qualifying restricted subdivision will receive the rating of the responding fire department if ALL OF THE FOLLOWING APPLY: 1. The subdivision is under development with recorded plat and paved roads where dwellings are built by licensed contractors subject to building restrictions as to type and square footage. 2. The subdivision contains at least 10 houses. 3. The subdivision is within 5 miles travel distance of a responding fire department. 4. The home is located within 1,000 feet of fire hydrant, or responding fire department is equipped to transport water or pump water from swimming pools or other sources within 1,000 feet of the home. Exceptions to the Protection Class listings in the Public Protection Classification Manual will be considered upon review by Underwriting. H. CONSTRUCTION DEFINITIONS 1. Frame - exterior wall of wood or other combustible construction, including wood-iron clad, stucco on wood or plaster on combustible supports, and aluminum or plastic siding over frame. 2. Masonry Veneer - exterior walls of frame construction veneered with more than 75% brick or stone. 3. Masonry - exterior walls constructed of masonry materials such as adobe, brick, concrete, gypsum block, hollow concrete block, stone, tile, or similar materials, and floors and roof of combustible construction. 4. Superior Construction - exterior walls, floors, and roof constructed of masonry or other noncombustible materials. Note: Mixed (Masonry/Frame) - a combination of both frame and masonry construction shall be classified as Frame when the exterior walls of frame construction (including gables) exceed 33 1/3% of total exterior wall area; otherwise classify as Masonry. 5. Hardiplank Siding Frame homes with Hardiplank Siding shall be classified as Frame. 6. Masonry Veneer Frame homes with Masonry Veneer shall be classified as Frame but will be given a 5% discount to be applied within the NHR Premium Factors section. I. MANDATORY ENDORSEMENTS 1. HO Homeowners 3 Special Form. 2. HPCHO3 09 SP Special Provisions for Florida / HO HPCHO Windstorm Exterior Paint or Waterproofing Exclusion Seacoast Florida is attached to all policies that include wind coverage in the following territories: 50, 70, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 143, 144, 145, 146, 147, 180, 181, 182, 310, 360, 361, 410, HO No Section II Liability Coverages for Home Day Care Business / Limited Section I Property Coverages for Home Day Care Business. 5. HPCHP 06 CLP Collapse Coverage. 6. HPCHO 09 DN Deductible Notification. 7. HPCHO 09 ED Existing Damage Exclusion. 8. HPCHO 08 ELE Unusual or Excessive Liability Exposures. 9. HPCHO 09 FCE Limited Fungi, Mold or Dry Rot or Bacteria Coverage Endorsement. 4/1/2014 Voluntary HO3 Program GR-2

11 10. HO Calendar Year Hurricane Deductible (%) with Supplemental Reporting Requirement-FL or HO Calendar Year Hurricane Deductible (Fixed $) with Supplemental Reporting Requirement-FL. 11. HPCHO REJ OLR Ordinance or Law Coverage Rejection Form. 12. HPC PRI Privacy Notice. 13. OIR B Notice of Premium Discounts for Hurricane Loss Mitigation. 14. OIR B Checklist of Coverage. 15. HPCHO 09 OTL Outline of Coverage. 16. HPCHO 09 SDE Secondary/Seasonal Dwelling Endorsement when occupancy is seasonal/secondary. 17. HPCHO3 IDX - Special Form Index. J. WAIVER OF PREMIUM When a policy is first issued or endorsed after the inception date, additional or return premium of less than $5 is waived. However, we will return unearned premium upon request K. PREMIUM ROUNDING When calculating premium, adjusted base rates and premiums for each optional coverage are rounded to the nearest whole dollar before summing. L. ANNUAL DWELLING AND OTHER STRUCTURES COVERAGES ADJUSTMENT Dwelling and Other Structures coverage will be reviewed annually and amended for changes in replacement cost based on changes in underlying construction costs. 4/1/2014 Voluntary HO3 Program GR-3

12 IV. PREMIUM CALCULATION A. GENERAL 1. This section provides explanation of how premiums are determined and what adjustments are applied to price each risk. Rates for optional coverages follow premium adjustments. 2. Two base rates apply to each territory: "Hurricane" and "Non Hurricane". Premium adjustments apply to the Hurricane Base Rate (HUR), the Non Hurricane Base Rate (NHR), or both Base Rates. 3. Premium adjustments are calculated by multiplying the factors provided below by the appropriate base rate (HUR, NHR, or both) to calculate adjusted base rates. 4. Optional coverages that result in additional premium are presented beginning on page OC-1. Additional premiums are presented as a dollar amount, or a percentage of the unadjusted base rates. B. AMOUNT OF INSURANCE Coverage A Factor Coverage A Factor $75, $310, $100, $320, $110, $330, $120, $340, $130, $350, $140, $360, $150, $370, $160, $380, $170, $390, $180, $400, $190, $410, $200, $420, $210, $430, $220, $440, $230, $450, $240, $460, $250, $470, $260, $480, $270, $490, $280, $500, $290, Each Add'l $300, $1K /1/2014 Voluntary HO3 Program PC-1

13 C. AGE OF DWELLING Non-Hurricane Hurricane Age Factor Age Factor Year Built Factor Newer & & Age is determined by subtracting the year in which construction of the residence was completed from the year in which the policy is effective. D. TOTAL RENOVATIONS If acceptable documentation demonstrates that a residence has been totally* renovated, the year in which the total renovation began may be used as the date of construction. Total renovation will require a totally new electrical, plumbing (above the slab), heating and A/C, roof and window systems, and must be verified by a certified inspector based on an on site inspection. *Complete documentation should be submitted to Underwriting prior to binding. E. PROTECTION CLASS / CONSTRUCTION Apply to Non Hurricane Base Rate (NHR): Frame Masonry Superior /1/2014 Voluntary HO3 Program PC-2

14 Apply to Hurricane Base Rate (HUR): Construction Frame Masonry Superior F. BUILDING CODE EFFECTIVENESS GRADING Factor The Building Code Effectiveness Grading Schedule develops a grade of 1 to 10 for a community based on the adequacy of its building code and the effectiveness of its enforcement of that code. Policies may be eligible for special rating adjustments subject to the criteria in this section. 2. In some communities, two Building Code Effectiveness Grades may be assigned. One grade will apply to 1 and 2 family dwellings and the other to multiple unit dwellings. The Public Protection Classification Manual will indicate the application of each grade. 3. The Building Code Effectiveness Grades for a community, and their effective dates, are provided in the Public Protection Classification Manual published by ISO Commercial Risk Services, Inc. 4. Community Grading a. The Building Code Effectiveness Grade applies to any building that has an original certificate of occupancy dated in the year of the effective date of the community grading, or later. b. If a community is regraded subsequent to its initial grading, the factor for the revised grade applies to buildings that have an original certificate of occupancy dated the year of the effective date of the revised grading, or later. c. Where certificates of occupancy are not issued, reasonable evidence of year of construction will be accepted. d. If, due to an addition or alteration, the original building is changed to comply with the latest building code, the factor for the community applicable at the time the reconstruction is completed will apply. 5. Individual Grading a. Where buildings have been built in full conformance with the natural hazard mitigation elements of one of the nationally recognized building codes even though the community grade is greater than 1, or the community is not participating in the program, exception rating procedures may apply. b. Any building may be classified as Grade 1 for Windstorm/Hail upon certification by a registered or licensed design professional based on an on-site inspection, that such building is in compliance with one of the three nationally recognized building codes with respect to mitigation of the windstorm and/or hail hazard. This classification is effective only from the date of the certification. 4/1/2014 Voluntary HO3 Program PC-3

15 6. Ungraded and Nonparticipating Risks Buildings that do not meet the criteria above for community or individual grading should be coded as "Ungraded" or "Non-Participating" if the community has chosen not to participate. Grade or Ungraded Non-Participating G. PREMIUM FACTORS - NON HURRICANE BASE RATE Factor HUR NHR Product of applicable premium factors in this section is applied to the Non Hurricane Base Rate (NHR). Factor 1. Secured Community/Building Credit: a. A single entry leads into the sub-division or community is protected by 24-hour security patrol..90 b. 24 hour-manned gates protect all entrances to community or passkey gates protect all entrances to the community Protective Devices a. Fire alarm reporting to fire or central station..90 or Complete home sprinkler system..85 b. Complete local burglar alarm (covers all exterior doors & windows)..95 or Complete burglar alarm reporting to police or central station..90 Note: Burglar alarm credits are not available when coverage C limit is less than 40% of Coverage A. Use Endorsement HO Premise Alarm or Fire Protection System. 3. Senior Discount: Age 55 and Over Any named insured has reached the age of No Prior Insurance / Lapse in Coverage Surcharge Risks with no proof of prior insurance or a lapse in coverage of over 30 days Masonry Veneer Credit Seasonal/Secondary Surcharge applies to all risks unoccupied for more than 3 months per one year period Individual Insurance Financing Scoring Tiered Rating a. The credit of the named insured will be reviewed in compliance with section , F.S. and Florida Rule 69B Credit is evaluated along with prior claim history, condition of property and other risk factors. b. Credit history is ordered and an Insurance Score is determined on the Named Insured only for all new business policies. Agent must obtain permission from the applicant prior to requesting the credit report. 4/1/2015 Voluntary HO3 Program PC-4

16 c. A CLUE report is also ordered, and a property inspection report may be ordered. Two or more claims and/or poor condition of the property may make the risk ineligible. d. The Insurance Score and prior claims history are used to determine the rating Tier (see following tables). e. Heritage does not make adverse underwriting decisions due to credit when the Insurance Score cannot be generated for either a No Hit of lack of data. A No Hit/No Score qualifies for a discount if there were no prior claims in the past 3 years. f. Credit history will be run for new business and again at every second renewal. The most recent insurance score will be used to determine tier placement. TIER CRITERIA TABLE Tiered rating is utilized to broaden underwriting eligibility and properly match rate to risk. Consumer data gathered from the applicant and third party providers determines tier placement. Criteria used for tier placement include Insurance Score and prior non-catastrophe claims. Non-catastrophe claims will be reviewed at every renewal. Non-catastrophe claims older than three years old will not be counted against the insured tier placement. Tier Factor Insurance Tier Placement by Prior Claims Score Tier Factor Tier Factor Range No Score /1/2015 Voluntary HO3 Program PC-5

17 H. PREMIUM FACTORS - HURRICANE BASE RATE 1. Windstorm Loss Mitigation Features When a policy covers the peril of Windstorm or Hail, the risk may be eligible for a premium credit up to a maximum of 90%, including the BCEG credit, if one or more loss mitigation features or construction techniques exist. Supporting documentation that substantiates the existence of loss mitigation features is required in order to receive the credits. Note that when the windstorm protective devices credit applies, Endorsement HO Windstorm Protective Devices will be attached. For homes built prior to 2002, certification by a registered or licensed design professional is required for the Roof Coverage, Roof Deck Attachment and Roof Wall Connection. Sale and/or installation documentation is required for all Opening Protection. Existing Construction Credits (Homes built prior to 2002) Obtain credit from Appendix A. Subtract credit from one to obtain premium factor Windstorm Loss Mitigation Features. New Construction Credits (Homes built in 2002 or newer) Obtain credit from Appendix B. Subtract credit from one to obtain premium factor for Windstorm Loss Mitigation Features. The Wind Premium Credits apply to all wind premium. The credits will apply to the entire calculated hurricane premium. Five percent (5%) of the non-hurricane premium is for nonhurricane wind coverage. Therefore, the Windstorm Premium Credits apply to five percent (5%) of the non-hurricane premium. The credit discount factor is calculated as follows: * (1-Wind Premium Credit) Example: If the WPC in the table is.60, the factor is *(1-.60) = Additional Risk Exposure Factors: Flat Tile Roof (flat masonry or flat clay).98 Hip Roof If the roof slopes down to meet all walls (like a pyramid), it is considered a Hip Roof. This design has superior ability to withstand high winds and will result in a premium credit. Other factors negate the value of this design. Hip Roof must be verified by photographic documentation. Roof Shape (Geometry) determination will be based on the definition set forth in the latest approved OIR-B form. 3. No Prior Insurance / Lapse in Coverage Surcharge Risks with no proof of prior insurance or a lapse in coverage of over 30 days /1/2015 Voluntary HO3 Program PC-6

18 V. COVERAGE OPTIONS A. DEDUCTIBLES 1. All policies are subject to a deductible that applies to loss from all Section I perils. The Hurricane deductible applies to a calendar year basis subject to either Endorsement HO Calendar Year Hurricane Deductible (%) with Supplemental Reporting Requirement-FL or HO Calendar Year Hurricane Deductible (Fixed $) with Supplemental Reporting Requirement-FL. In the event of the first windstorm loss caused by a single hurricane occurrence during a calendar year, we will pay only that part of the total of all loss payable under Section I Property Coverages that exceeds the calendar year hurricane deductible. With respect to a windstorm loss caused by the second, and each subsequent, hurricane occurrence during the same calendar year, we will pay only that part of the total of all loss payable under Section I Property Coverages that exceeds the greater of the remaining dollar amount of the calendar year hurricane deductible; or the deductible that applies to fire that is in effect at the time of the loss. 2. For all perils except hurricane (apply to NHR) Amount $500 1,000 2,500 5, For losses due to Hurricane (apply to HUR) Deductible $500 2% Cov. A 5% Cov. A 10% Cov. A $75, , $100, , >$200, Deductibles may be increased at any time during the policy period. Deductibles may only be decreased at time of renewal. B. WINDSTORM OR HAIL EXCLUSION / HO The perils of Windstorm and Hail may be excluded in areas where coverage is available from Citizens Property Insurance Corporation. We will require this endorsement in some territories based on capacity. In addition, windstorm coverage can be excluded if all named insureds, mortgagees and other insurable interests complete and sign the Option to Exclude Windstorm Coverage form HPC 09 WE. The original form must be sent to the Company and a copy provided to the insured. 2. When wind and hail are excluded, apply the following premium factors: NHR:.95 HUR: Use Endorsement HO Windstorm or Hail Exclusion. C. WATER DAMAGE EXCLUSION / HPCHO 09 WD 1. Water damage: Factor a. May be excluded for Homes over 40 years of age; b. Will be excluded for homes with polybutylene and/or galvanized steel plumbing. 2. The peril of Water Damage may also be excluded from any risk and results in a lower premium. In addition to what is automatically excluded in the policy, this endorsement will exclude discharge or 4/1/2014 Voluntary HO3 Program CO-1

19 overflow of water or steam from within a plumbing, heating, A/C, automatic sprinkler system or from within a household appliance; as well as water penetrating through the roof or exterior walls or windows unless water penetration is a direct result of damage caused by a Peril Insured Against other than water. When water damage is excluded, apply the following factors: NHR:.90 HUR: Use Endorsement HPCHO 09 WD Water Damage Exclusion. D. HURRICANE-SCREEN ENCLOSURES AND CARPORTS COVERAGE / HPCHO 09 WSE 1. Provides coverage for loss caused by hurricane to aluminum framing for screened enclosures and carports permanently attached to the dwelling on a replacement cost basis. This endorsement does not provide coverage for screen material or costs associated with removing or replacing screens. This endorsement does not increase the limit of liability for Coverage A. This coverage is available in increments of $5,000 up to a maximum of $75, Additional premium: (Selected Limit / $50,000) x 0.32 x HUR Base x Lesser of (Amount of Insurance Factor, 4.0) 3. Use Endorsement HPCHO 09 WSE Limited Screened Enclosure and Carport Coverage. E. COVERAGE B OTHER STRUCTURES 1. Insured may select desired coverage limit for other structures located on the residence premises. Other structures may not be rented to others, or used by non-related persons for residence purposes. 2. 2% of Coverage A is included in the basic policy. The following additional coverages are available (apply to NHR and HUR): % of Cov. A Factor 0% % % % % If additional Coverage B is required beyond the maximum available, 20% of Coverage A blanket limit, specific Other Structures may be added to this policy using endorsement HO Note that specific coverage on Other Structures cannot be added unless the 20% blanket coverage has been selected. Sum of coverage provided by blanket and specific Coverage B cannot exceed 70% of Coverage A. Additional Premium: NHR - $1.33 per $1,000, HUR - $2.67 per $1, When the Other Structures on the residence premises is rented to others, use endorsement HO Structures Rented to Others Residence Premises. Additional Premium use the sum of: a. NHR $6 per $1,000 of insurance, and b. A premium of $38 for the increased Coverage E and Coverage F exposures. 4/1/2014 Voluntary HO3 Program CO-2

20 F. COVERAGE C - CONTENTS 1. Insured must select desired coverage limit for personal property. Coverage C is available in 5% (of Coverage A) increments from a minimum 25% to maximum 75%, or may be excluded entirely. Base rates include contents coverage equal to 50% of Coverage A. % of Cov A HUR Factor NHR 0% % % % Factors for amounts between 50% and 25% or 75% are proportional. 3. Note: If the named insured(s) chooses to exclude contents coverage entirely, form HPC 09 CE Option to Exclude Contents Coverage or the Option to Exclude Coverage section of the application must be completed and signed by all named insureds. The original form or signed application must be sent to the Company and a copy provided to the insured. G. INCREASED SECTION II LIMITS 1. All policy forms provide basic limits of $100,000 per occurrence for Coverage E, and $1,000 per person for Coverage F. 2. Additional premium for increased limits in Broward, Dade, Indian River, Martin, Palm Beach and St. Lucie: Coverage E - Liability Coverage F - Medical Payments Limit Additional Premium Limit Additional Premium $200,000 $20 $2,500 $6 $300,000 $30 $5,000 $10 $500,000 $50 3. Additional premium for increased limits in all other counties not listed above: Coverage E - Liability Coverage F - Medical Payments Limit Additional Premium Limit Additional Premium $200,000 $10 $2,500 $6 $300,000 $15 $5,000 $10 $500,000 $30 H. PERSONAL INJURY COVERAGE / HO Provides liability coverage for personal injury to others for offenses such as false arrest, detention or imprisonment, libel, slander, defamation of character, invasion of privacy, and wrongful eviction or wrongful entry. 2. Additional premium: $15 3. Use Endorsement HO Personal Injury Coverage. I. ORDINANCE OR LAW COVERAGE 1. Provides coverage for increases in cost of reconstruction, repair, or demolition of property that result from local laws or ordinances regulating such. Additional coverage provided by this endorsement is limited to 10% (HPCHO 09 OL3), 25% (HPCHO 09 OL1) or 50% (HPCHO 09 OL2) of the Coverage A policy limit. Per (b), Florida Statute, the 25% endorsement will automatically be provided to any HO-3 policy issued unless the insured signs a rejection form (HPCHO REJ OLR). 2. Additional premium: 10% Limit: 4/1/2014 Voluntary HO3 Program CO-3

21 (5% of NH Base X Amt of Ins Factor X PC Factor X Age Factor) + (5% of HUR Base X Amt of Ins Factor X Const Factor X Year Built (YB*) factor) 3. Additional premium: 25% Limit: (10% of NH Base X Amt of Ins Factor X PC Factor X Age Factor) + (10% of HUR Base X Amt of Ins Factor X Const Factor X Year Built (YB*) factor) 4. Additional premium: 50% Limit: (15% of NH Base X Amt of Ins Factor X PC Factor X Age Factor) + (15% of HUR Base X Amt of Ins Factor X Const Factor X YB factor) 5. *For Years Built 2002 and newer, the Year Built Factor =.50 in the hurricane calculation. This applies to the calculations of OL, IRC, PPRC, and SPPC. J. INCREASED REPLACEMENT COST ON DWELLING / HPCHO 09 IRC 1. This endorsement is intended to cover additional costs of construction that are incurred due to increases in the cost of construction that occur during the policy period. Increased construction cost is normally the result of increased demand relative to supply of labor and materials that can occur subsequent to a catastrophic loss that impacts a substantial number of properties in a region. Additional coverage provided by this endorsement is limited to a maximum of 20% of Coverage A. This endorsement does not cover increased construction costs attributable to laws or ordinances governing construction. 2. Additional premium: (5% of NH Base X Amt of Ins Factor X PC Factor X Age Fac)+ (5% of HUR Base X Amt of Ins Factor X Const Fac X YB Fac) 3. Use Endorsement HPCHO 09 IRC Increased Replacement Cost on Dwelling. K. PERSONAL PROPERTY REPLACEMENT COST COVERAGE / HPCHO Provides for settlement of losses for contents coverage {Coverage C) on a replacement cost Basis. 2. Additional premium: (15% of NH Base X Amt of Ins Factor X PC Factor X Age Factor)+ (15% of HUR Base X Amt of Ins Factor X Const Factor X YB Factor) 3. Use Endorsement HPCHO Personal Property Replacement Cost Coverage. L. SPECIAL PERSONAL PROPERTY COVERAGE / HO Modifies loss settlement from named to open perils for contents. 2. Additional premium: (10% of NH Base X Amt of Ins Factor X PC Factor X Age Factor)+ (10% of HUR Base X Amt of Ins Factor X Const Factor X YB Factor) 3. Use Endorsement HO Special Personal Property Coverage. M. COVERAGE C INCREASED SPECIAL LIMITS OF LIABILITY / HO The special limits of liability in the policy for jewelry, watches, furs ($1,000) and silverware, goldware, pewterware ($2,500) may be increased as follows: a. Jewelry, Watches and Furs: The special limit of liability of $1,000 may be increased to a maximum of $5,000, but not to exceed $1,000 for any one article. The additional premium shall be $18 for each $1,000 of increased coverage. 4/1/2014 Voluntary HO3 Program CO-4

22 b. Silverware, Goldware and Pewterware: The special limit of liability of $2,500 may be increased to a maximum of $10,000. The additional premium shall be $6.50 for each $1,000 of increased coverage. 2. This coverage is available for primary occupancy only. 3. Use Endorsement HO Coverage C Increased Special Limits of Liability. 4. Endorsement HO Coverage C Increased Special Limits of Liability will be attached if policy included Endorsement HO Special Personal Property Coverage. N. PERSONAL PROPERTY SCHEDULED / HPCHO 09 SPP 1. Additional risks coverage may be purchased for the following classes of property. Property Rate per $100 Antiques $.90 Bicycles $9.35 Cameras & Projection Equipment (non professional) $1.52 Coins $1.80 Fine Arts No breakage $.50 Breakage $1.00 Furs $.40 Golfer s Equipment $1.40 Guns : Collectible $1.50 Fired $3.00 Jewelry $2.00 Miscellaneous Personal Property $1.00 Musical Instruments (non professional) $.60 Other Sports Equipment $2.00 Silverware $.45 Stamps $ Underwriting Guidelines: a. Appraisals or bills of sale with photo included - less than 3 years old must accompany single items worth $2,500 or more. (Copy is acceptable) b. Schedules, which total over $35,000 or include individual items worth more than $10,000 should be submitted for approval prior to binding. c. This coverage is available for primary occupancy only. 3. Use Endorsement HPCHO 09 SPP Scheduled Personal Property. O. LOSS ASSESSMENT COVERAGE INCREASED LIMITS / HO Provides increased coverage for assessments relating to the residence premises. The basic policy includes $1,000 coverage. 2. Additional premium: Limit Premium $ 5,000 $15 10, Use Endorsement HO Loss Assessment Coverage. 4/1/2014 Voluntary HO3 Program CO-5

23 P. LIMITED FUNGI, WET OR DRY ROT, OR BACTERIA INCREASED COVERAGE / HPCHO 09 FCE 1. The basic policy includes $10,000 coverage for Fungi (Mold), Wet or Dry Rot or Bacteria. Coverage can be increased, at renewal, as shown below. 2. Additional premium: Optional Increased Limit $25,000 Each covered loss/ $50,000 Policy Aggregate $50,000 Each covered loss/ $50,000 Policy Aggregate 3. Any request to increase the coverage limit to $25,000 or $50,000, must be submitted to underwriting for prior approval. An interior inspection may be required to detect the presence of moisture, fungi, mold, wet/dry rot or bacteria within the dwelling. Unacceptable levels or failure to allow the inspection will result in policy cancellation. 4. Use Endorsement HPCHO 09 FCE Limited Fungi (Mold), Wet or Dry Rot, or Bacteria Increased Coverage. Q. LIMITED WATER DAMAGE COVERAGE / HPCHO 09 LWD 1. Under certain conditions, homes are written with the Water Damage Exclusion. For an additional premium, the policy may be endorsed to provide coverage for sudden and accidental discharge or overflow of water or steam from within a plumbing, heating, A/C, automatic sprinkler system or from within a household appliance. The limit of liability for all covered property under this option is $10, Additional Premium: NHR: 8% surcharge (1.08 factor). 3. This coverage is not available for risks with polybutylene and/or galvanized steel pipes. 4. Use Endorsement HPCHO 09 LWD Limited Water Damage. R. HOME COMPUTER COVERAGE / HPCHO 09 HC 1. Provides coverage for computers and related equipment against additional risks of physical loss subject to certain exclusions. In addition, this endorsement permits business use of a personal computer. This coverage is available to a maximum limit of $20, Additional premium: $6 for each $1, Use Endorsement HPCHO 09 HC Home Computer Coverage. S. SINKHOLE COVERAGE / HPCHO 09 SLC The base policy covers Catastrophic Ground Cover Collapse as defined by Florida Statute Sinkhole Coverage is excluded in the base policy, but may be purchased for an additional premium. For both new and renewal business, the insured may elect an optional 10% deductible for this coverage. 10% Sinkhole Deductible Sinkhole Deductible Factor Yes 0.90 No 1.00 Premium $60 $90 New policies may be bound only with the Catastrophic Ground Cover Collapse. If the policyholder elects the option for Sinkhole Coverage, an approved structural inspection of the home must be completed prior to adding the coverage. The inspection will document existing damage, evaluate the structural integrity of the dwelling, and verify that there is no current or proximate sinkhole activity that has not been disclosed. Optional Sinkhole Loss Coverage will be approved for those homes that do not display characteristics associated with sinkhole damage. The Optional Sinkhole Loss Disclosure Form must be completed and signed by all named insureds. 5/15/2015 Voluntary HO3 Program CO-6

24 An Approved inspection service is one that has been designated by us as competent to perform the evaluation, and whose report format meets our informational requirements. The insured will contract directly with the Approved inspection service, and pay an arranged fee, which will be one half of the amount we have negotiated with the inspection service. We will pay the other half and both parties will receive a copy of the inspection. The policyholder will be advised separately of the underwriting decision to accept or decline coverage. When coverage is accepted it will become effective the date of the inspection. The fee will not be refundable no matter how the underwriting decision is reached. Areas subject to this rule: All areas of the State are subject to this rule. Additional Premium: (NH Base X Amt. of Ins. Factor X Territory Surcharge in chart below X Sinkhole Deductible Factor from table above) Territory Surcharge Territory Surcharge Territory Surcharge Territory Surcharge Territory Surcharge 126F % 146F % 459F % 480F % 520F % 127F % 146F % 459F % 480F % 520F % 127F % 146F % 470F % 480F % 521F % 127F % 146F % 470F % 480F % 521F % 127F % 147F % 470F % 480F % 521F % 128F % 147F % 470F % 480F % 521F % 128F % 390F % 470F % 480F % 522F % 128F % 390F % 471F % 481F % 522F % 128F % 391F % 471F % 481F % 522F % 129F % 410F % 471F % 481F % 523F % 129F % 456F % 472F % 490F % 523F % 129F % 457F % 472F % 500F % 524F % 129F % 457F % 472F % 500F % 525F % 145F % 458F % 472F % 500F % 528F % 145F % 458F % 472F % 511F % 529F % 145F % 458F % 473F % 511F % Other 2.00% 146F % 459F % 473F % 520F % Use Endorsement HPCHO 09 SLC Optional Sinkhole Loss Section I Property Coverage. T. GOLFCART PHYSICAL DAMAGE AND LIABILITY COVERAGE / HPCHO 09 CG1 and HPCHO 09 CG2 1. Extends Section I and II coverages to losses arising from the ownership and operation of a golf cart. Coverage does not apply when golf cart is: a. Used to carry persons for a charge; b. Used for business purposes; c. Rented to others; or d. Being used outside the boundaries of a retirement community or limited access community unless being used for golfing purposes or traveling to or from a golf course. 2. Option 1: For an additional premium of $75, Endorsement HPCHO 09 CG1 includes special limits of liability as follows: a. Coverage C - Personal Property: $ 5,000 b. Coverage E - Personal Liability: $ 50,000* c. Coverage F - Medical Payment to Others: $ 5,000 * Option 1 limits are available for risks with a $100,000 Coverage E limit. 5/15/2015 Voluntary HO3 Program CO-7

25 3. Option 2: For an additional premium of $100, Endorsement HPCHO 09 CG2 includes special limits of liability as follows: a. Coverage C - Personal Property: $ 5,000 b. Coverage E - Personal Liability: $ 100,000/300,000/100,000* c. Coverage F - Medical Payment to Others: $ 5,000 * Option 2 limits are available only for risks which carry increased Coverage E limits. 4. Option 3: For an additional premium of $150, Endorsement HPCHO 09 CG3 includes special limits of liability as follows: a. Coverage C - Personal Property: $ 10,000 b. Coverage E - Personal Liability: $ 100,000/300,000/100,000* c. Coverage F - Medical Payment to Others: $ 5,000 * Option 3 limits are available only for risks which carry increased Coverage E limits. 5. Option 4: For an additional premium of $200, Endorsement HPCHO 09 CG4 includes special limits of liability as follows: a. Coverage C - Personal Property: $ 15,000 b. Coverage E - Personal Liability: $ 100,000/300,000/100,000* c. Coverage F - Medical Payment to Others: $ 5,000 Option 4 limits are available only for risks which carry increased Coverage E limits. 6. The limits of liability shown above replace the limits of liability shown on the declarations page for any and all covered losses resulting from the operation of your golf cart. U. DOG LIABILITY COVERAGE / HPCHO 09 DL 1. Extends Section II coverage to losses arising from dogs you own or keep subject to the limits, exclusions and conditions listed in your policy. 2. Refer to Underwriting if Dog Liability Coverage is desired. Dangerous breeds as determined by the Company are not eligible for Coverage. 3. Dogs weighing more than 20 pounds must be individually listed including age county rabies tag number and a photo taken within the past 3 months 4. Dogs with a bite history are not eligible for coverage. 5. For an additional premium of $25, Endorsement HPCHO 09 DL Dog Liability includes special limits of liability as follows: a. Coverage E Personal Liability: $50,000 b. The limits of liability shown above replace the limits of liability shown on the declaration page for any and all covered losses resulting from dogs. V. WATER BACK UP AND SUMP OVERFLOW / HPCHO 09 WBU 1. The policy may be endorsed to provide coverage for loss resulting from water which backs up through sewers or drains or which overflows from the sump. The limit of liability under this option is $5,000. The policy deductible or $1,000, whichever is greater, applies. This endorsement is only available at inception or upon renewal. 2. Additional premium: $25 3. Note: This endorsement is not available on risks where the Water Damage Exclusion applies. 4. Use Endorsement HPCHO 09 WBU Water Back Up and Sump Overflow. 5/15/2015 Voluntary HO3 Program CO-8

26 W. ADDITIONAL INSURED RESIDENCE PREMISES / HO This endorsement extends the definition of insured to include those named with respect to Coverages A Dwelling, B Other Structures, E Personal Liability (premises only) and F Medical Payments to Others (premises only). Additional Insureds will be notified of any policy cancellations or non-renewals. 2. Trusts may be added as additional insured when either the trust grantor or beneficiary is the named insured and resides in the home. 3. Use Endorsement HO Additional Insured Residence Premises. X. ADDITIONAL INTERESTS RESIDENCE PREMISES / HO Additional interests are added for informational purposes only and will be notified of any policy cancellations or non-renewals, but do not have any coverage under the policy. 2. Use Endorsement HO Additional Interests Residence Premises. Y. IDENTITY THEFT EXPENSE AND RESOLUTION SERVICES COVERAGE / HPCHO 09 IDT 1. The policy may be endorsed, for an additional premium, to provide coverage for loss that results from the act of Identity Theft or Identity Fraud. The endorsement provides coverage for: a. Identity Theft Expenses: Pays up to $25,000 for expenses incurred by an insured as the direct result of identity theft. b. Resolution: Access to resolution services from a consumer fraud specialist to assist in the process to restore identity. 2. By endorsement, coverage is extended to the policyholder, spouse, domestic partner, children living at home (up to age 21 or full time student up to age 26), and grandparents living at the insured premises. 3. Additional Premium: $25 4. Use Endorsement HPCHO 09 IDT Identity Theft Expense and Resolution Services Coverage. Z. PLATINUM PREFERRED (REPAIR PROGRAM COMPANY OPTION) / HPCHO PPS 1. The policy may be endorsed at the option of the policyholder. If selected, the endorsement will allow the Company the option to select an appropriately licensed or qualified contractor to repair damaged property as provided by the policy, if the Company so elects. 2. If the endorsement is added, the policyholder s deductible obligation at loss settlement in the event of a covered property loss other than a hurricane loss or sinkhole loss will be reduced by ten percent (10%) of the All Other Perils deductible. The credit does not reduce the applicable deductible under the policy. The credit will apply only when the amount of a covered loss exceeds the applicable deductible. 3. The Company may pay the amount of the deductible credit directly to the selected contractor on behalf of the policyholder. The policyholder remains responsible for the balance of the deductible. If the Company does not select the contractor for a covered loss to which the credit applies, the Company will pay the amount of the credit (i) to the contractor if the covered property is repaired under the terms of the policy, or otherwise (ii) to the insured (and mortgage company, if applicable). 4. Upon prior written notice to the Company, the endorsement maybe removed from the policy as of the next succeeding policy renewal date 5/15/2015 Voluntary HO3 Program CO-9