United Property & Casualty. Insurance Company

Transcription

1 United Property & Casualty Insurance Company HOMEOWNERS PROGRAM MANUAL NEW JERSEY Effective 06/08/2014 UNITED INSURANCE MANAGEMENT, LC Managing General Agent Table of Contents UPC NJ HO Manual HO-1 Ed. 06/08/14

2 Company Rules A1. Special State Requirements... HO-A1-1 A2. Safe Home Credit... HO-A2-1 A3. 50 Plus Discount... HO-A3-1 A4. New Home Discount... HO-A4-1 A5. Renewal Discount... HO-A5-1 A6. Loss Free Credit... HO-A6-1 A7. Account Credit... HO-A7-1 A8. Water Loss Prevention Credit... HO-A8-1 A9. Identity Theft Expense And Resolution Services Coverage... HO-A9-1 A10. Equipment Breakdown Coverage... HO-A10-1 A11. Evacuation Coverage... HO-A11-1 A12. Ultra Endorsement Forms HO & HO HO-A12-1 A13. Premier Endorsement Forms HO & HO HO-A13-1 A14. Protector Endorsement Forms HO & HO HO-A14-1 A15. Premium Protective Condominium Endorsement - HO Only... HO-A15-1 A16. Workers Compensation Coverage... HO-A16-1 A17. Maximum Credit Rule... HO-A17-1 A18. Payment Plans.. HO-A18-1 Part I Coverage And Definition Type Rules 100. Introduction... HO Limits of Liability And Coverage Relationships... HO Description of Coverage... HO Mandatory Coverages... HO Eligibility... HO Secondary Residence Premises... HO Protection Classification Information... HO Construction Definitions... HO Seasonal Dwelling Definition... HO Single and Separate Building Definition... HO Reserved for Future Use... HO Part II Servicing Type Rules 201. Policy Period... HO Changes or Cancellations... HO Manual Premium Revision... HO Multiple Company Insurance... HO Minimum Premium... HO Transfer or Assignment... HO Waiver of Premium... HO Whole Dollar Premium Rule... HO Restriction of Individuals Policies... HO Refer to Company... HO Additional Interest... HO Reserved for Future Use... HO Part III Base Premium Computation 301. Base Premium Computation... HO Loss Settlement Options... HO Ordinance or Law Coverage... HO Special Personal Property Coverage HO And HO HO Loss History Rating Plan... HO Reserved for Future Use... HO Part IV Adjusted Base Premium Computation Rules 401. Superior Construction... HO UPC NJ HO Manual HO-2 Ed. 06/08/14

3 402. Townhouse or Row House All Forms Except HO and HO HO Personal Property (Coverage C) Replacement Cost Loss Settlement... HO Protective Devices... HO Inflation Guard All Forms Except HO and HO HO Deductibles... HO Additional Amounts of Insurance... HO Actual Cash Value Loss Settlement Windstorm or Hail Losses to Roof Surfacing... HO Replacement Cost Loss Settlement for Certain Non-Building Structures... HO Building Code Effectiveness Grading.....HO Reserved for Future Use... HO Part V Section I Property Additional Coverages and Increased Limits Rules 501. Building Additions and Alterations at Other Residences... HO Building Additions and Alterations Increased Limits HO HO Business Property Increased Limits... HO Credit Card, Fund Transfer Card, Forgery and Counterfeit Money... HO Earthquake Coverage... HO Fire Department Service Charge......HO Form HO Coverage A Dwelling Basic and Increased Limits and Special Coverage.. HO Form HO Units Regularly Rented to Others... HO Home Day Care Coverage... HO Permitted Incidental Occupancies Residence Premises... HO Supplemental Loss Assessment Coverage... HO Loss of Use Increased Limit... HO Ordinance or Law Increased Amount of Coverage HO and HO HO Other Structures... HO Personal Property... HO Personal Property - Scheduled... HO Rental to Others Extended Theft Coverage... HO Sinkhole Collapse Coverage... HO Special Computer Coverage... HO Livestock Collision Coverage... HO Limited Water Back-Up and Sump Discharge or Overflow Coverage... HO Landlords Furnishings... HO Assisted Living Care Coverage... HO Other Members of a Named Insured s Household... HO Motorized Golf Cart Physical Loss Coverage... HO Residence Held in Trust... HO Student Away from Home... HO Home Business Insurance Coverage... HO Limited Fungi, Wet Or Dry Rot Or Bacteria Coverage... HO Identity Fraud Expense Coverage... HO Limited Coverage For Theft On Personal Property Located in a Dwelling Under ConstructionHO Reserved For Future Use... HO Part VI Section II Additional Coverages and Increased Limits Rule 601. Residence Premises Basic and Increased Limits / Other Exposures Basic Limits... HO Other Insured Location Occupied By Insured... HO Residence Employees... HO Additional Residences Rented to Others... HO Other Structures Rented to Others Residence Premises... HO Computer-Related Damage or Injury Exclusion and Coverage Options... HO Home Day Care Coverage... HO Permitted Incidental Occupancies Residence Premises and Other Residences... HO Business Pursuits... HO Personal Injury... HO Incidental Low Power Recreational Motor Vehicle... HO Outboard Motors and Watercraft... HO UPC NJ HO Manual HO-3 Ed. 06/08/14

4 613. Owned Snowmobile.. HO Farmers Personal Liability... HO Incidental Farming Personal Liability... HO Optional Property Remediation for Escaped Liquid Fuel and Limited Lead and Escaped Liquid Fuel Liability Coverages... HO Canine Liability Exclusion... HO Reserved for Future Use... HO Part VII Section II Liability Other Exposures Increased Limits 701. Other Exposures Personal Liability Increased or Reduced Limits... HO Other Exposures - Medical Payments to Others Increased Limits... HO Territory Definitions and Reference Table... HO-T-1 Tiers Key Premiums HO & HO Key Premiums HO Key Premiums HO Rating Factors to the Territory Premium UPC NJ HO Manual HO-4 Ed. 06/08/14

5 RULE A1. SPECIAL STATE REQUIREMENTS A. Special Provisions Endorsement HO Use this endorsement with all Homeowners policies. B. Workers Compensation Coverage Domestic Servants Or Household Employees Workers Compensation Coverage is mandatory under New Jersey Statutes. All policies that provide liability coverage must also provide Workers Compensation Coverage for domestic servants or household employees. Attach to all Homeowners policies, New Jersey Workers Compensation and Employers Liability Coverage For Residence Employees Endorsement: 1. HO when the limit of liability is $100,000; or 2. HO when the limit of liability is $500,000. For detailed information, refer to the Workmen s Compensation Manual or company instructions. C. New Jersey Fraud Statement IL N 072 Use this endorsement with all Homeowners policies. D. U.S. Treasury Department s Office of Foreign Assests Control ( OFAC ) Advisory Notice to Policyholders IL P 001 Use this endorsement with all Homeowners policies. E. Privacy Notice UPC 424 Use this endorsement with all Homeowners policies. F. Duties After Loss UPC HO 184 Use this endorsement with all Homeowners policies. G. Total Pollution Exclusion Endorsement UPC HO 220 Use this endorsement with all Homeowners policies. H. Evacuation Coverage UPC 174 Use this endorsement with all Homeowners policies. I. Limited Home Day Care Coverage Advisory Notice to Policyholders HO P 004 Use this endorsement with all Homeowners policies. J. Insurance Score Notice UPC 430 Use this endorsement with all Homeowners policies K. Recreational Or Service Vehicle Exclusion Endorsement UPC 601 Use this endorsement with all Homeowners policies. L. Rating Information For Property Remediation for Escaped Liquid Fuel and Limited Lead and Escaped Liquid Fuel Liability Notice HO P 005 Use this endorsement with all Homeowners policies. M. Flood Exclusion UPC 432 Use this endorsement with all Homeowners policies. N. Availability of Earthquake Coverage UPC 433 Use this endorsement with all Homeowners policies. UPC NJ HO Manual HO-A1-1 Ed. 06/08/14

6 RULE A2. SAFE HOME CREDIT FORMS HO & HO ONLY The policyholder is eligible if the premise has none of the following exposures: 1. A swimming pool 2. A wood stove, a pellet stove, or a fireplace insert 3. Any dogs 4. No person has smoked cigars or cigarettes for six (6) months or longer. A 15% Safe Home Credit is applied to the Base Premium. The credit shall not be applied midterm. The Safe Home Credit criteria must be indicated on the application for this discount to be applied. UPC NJ HO Manual HO-A2-1 Ed. 06/08/14

7 RULE A3. 50 PLUS DISCOUNT The policyholder is eligible if the following criteria are met: 1. One of the named insureds is age 50 or older and is not employed more than 20 hours a week outside of the residence premises. 2. The residence premise is the principal residence of the named insured. 3. The discount applies to Forms HO 00 03, HO 00 04, HO and HO If a policy holder is eligible, a 15% discount is applied to the Base Premium. The credit shall not be applied midterm. UPC NJ HO Manual HO-A3-1 Ed. 06/08/14

8 RULE A4. NEW HOME DISCOUNT The policyholder is eligible if: A. The policy is written on a home 20 years old or less. B. The policy form is an HO or HO The insurance producer must be satisfied as to the age of the dwelling. The application or declaration page must reflect the correct year of construction. The discount applicable to the Base Premium is as follows: Age of Dwelling Discount 0 10 years 15% years 10% UPC NJ HO Manual HO-A4-1 Ed. 06/08/14

9 RULE A5. RENEWAL DISCOUNT A 10% discount of the Base Premium is to be applied to all policies by the Company as eligible for renewal in UPC. All Homeowner Forms [HO 00 03, HO 00 04, HO & HO 00 06] are eligible. The Declarations page will reflect that this discount has been applied. UPC NJ HO Manual HO-A5-1 Ed. 06/08/14

10 A6. LOSS FREE CREDIT The policyholder is eligible for the following credits, as applicable: 1. 20% credit if there have been no property losses paid within the last 3 years % credit if 1 property loss has been paid within the last 3 years. 3. No credit is to be applied if the policyholder has had any liability losses or more than 1 property loss within the last 3 years. Loss history must be completed in full on the application and in our system for this discount to apply. All Homeowner Form [HO 00 03, HO 00 04, HO & HO 00 06] are eligible. Up to 2 paid Property Losses less than $1,500, within the prior 3 years, will not be considered a loss. UPC NJ HO Manual HO-A6-1 Ed. 06/08/14

11 RULE A7. ACCOUNT CREDIT United Property & Casualty Insurance Company A 5% credit will be applied to the Total Policy Premium if the agent controls the Insured s auto policy in the agency or if the agents writes a UPC Flood policy for the Insured. A maximum credit of 5% will be given even if both the auto and UPC flood policies are written through the agency. This credit cannot be applied mid-term. UPC NJ HO Manual HO-A8-1 Ed. 06/08/14

12 A8. Water Loss Prevention Credit A. A credit is available to insureds who can certify that the plumbing system in the insured dwelling has been updated or checked for soundness and lack of defects. All appliances connected thereto, and the attachments between the plumbing system and the appliances, must also be checked for soundness and lack of defects. B. This certification shall consist of invoices detailing all plumbing work performed by a licensed plumber, or a statement from a licensed plumber that all items in A. above have been checked and are sound, in good working order, tight with no leaks, and free of defects. The plumber s license number must be clearly shown on all invoices and/or statements. C. This credit will apply automatically to all new homes completed in the same calendar year as the initial effective date of the policy. In this case the plumber s certification is waived. D. This credit will expire after three successive policy terms unless a new certification pertaining to the continued soundness of the plumbing system is provided to the Company. E. To develop the premium credit, multiply the Base Premium by a factor of.05. UPC NJ HO Manual HO-A8-1 Ed. 06/08/14

13 A9. Identity Theft Expense And Resolution Services Coverage [All Forms] Identity Theft Expense and Resolution Services Coverage is available to provide first party coverage for expenses incurred by an insured as a direct result of any identity theft occurrence first discovered or learned of during the policy period. This endorsement provides up to $25,000 coverage for: A. Costs for notarizing affidavits or similar documents attesting to fraud; B. Costs for certified mail to law enforcement agencies, credit agencies, financial institutions, etc.; C. Lost income, up to a maximum of $1,000 per week/$5,000 total, resulting from time taken off work to complete fraud affidavits, meet with law enforcement agencies, credit agencies, and/or legal counsel; D. Loan application fees for re-applying for loans when the original application is rejected because the lender received incorrect credit information; E. Attorney fees incurred to defend lawsuits brought against the insured by merchants, financial institutions or their collection agencies; remove any criminal or civil judgments wronly entered against an insured; and challenge the accuracy or completeness of any information in a consumer credit report; F. Charges incurred for long distance telephone calls to merchants, law enforcement agencies, financial institutions or similar credit grantors, or credit agencies to report or discuss an actual identity fraud. G. Premium per policy: Included Use Endorsement UPC 186 Identity Theft Expense and Resolution Services Coverage. UPC NJ HO Manual HO-A9-1 Ed. 06/08/14

14 A10. Equipment Breakdown Coverage HO 00 03, HO & HO A. The Equipment Breakdown Coverage Endorsement provides equipment breakdown insurance to cover equipment attached to and made part of the dwelling or other structure when perils for such equipment would have been excluded under the Homeowners policy. B. Any risk eligible for and carrying a Homeowners policy is eligible for Equipment Breakdown coverage. C. This coverage will be written as a separate endorsement as part of a Homeowners Policy. D. The premium charge is per policy and based on the stated Homeowners Coverage A Building Value. E. Rate per Policy: Coverage A Value: Rate Per Policy: $1,000,000 or less Included Use Endorsement UPC 196 Equipment Breakdown Coverage Endorsement. UPC NJ HO Manual HO-A10-1 Ed. 06/08/14

15 A11. Evacuation Coverage Coverage is automatically provided at no charge under the homeowners program if a mandatory evacuation is ordered by a civil authority, as follows: A. If a mandatory evacuation from the Described Location is ordered in anticipation of impending potential damage from a Tropical Storm or Hurricane, we will cover costs (such as hotel and food costs) incurred by the Insured during the period of evacuation. B. We will also cover expenses incurred by the Insured for labor costs if the Insured pays to have storm shutters or plywood installed on the openings of the Described Location. C. Direct damage to the Described Location need not occur in order for this coverage to be activated. D. This coverage is additional insurance. E. The policy deductible does not apply to this coverage. F. Recovery for loss under this coverage is limited to a maximum of $250. Use Endorsement UPC 174 Evacuation Coverage. UPC NJ HO Manual HO-A11-1 Ed. 06/08/14

16 A12. Ultra Endorsement Forms HO and HO A. For an additional charge the Ultra Endorsement may be added to an HO or an HO policy. B. Coverages contained in this endorsement are: Personal Property (Coverage C) Replacement Cost Coverage Increased Coverage C to 75% of Coverage A Coverage D extended for one week when untenantability occurs due to civil authority or power interruption Special Computer Coverage $20,000 per occurrence Refrigerated Products loss due to power failure: $500 per occurrence Backup of Sewers, Drains or Sumps $5,000 per occurrence (a $250 deductible applies) Lock Replacement when keys are lost or stolen up to $500 per occurrence Additional coverage amounts: - Money increased from $ 200 to $ Securities increased from $1,000 to $ 2,000 - Credit Cards, Fund Transfer Cards, Forgery increased from $ 500 to $ 5,000 - Jewelry, Watches & Furs (including misplacing increased from $1,000 to $10,000* or losing of jewelry - $2,500 maximum per article) - Electronic Apparatus in a Motor Vehicle increased from $1,000 to $ 5,000 - Silverware, Goldware & Pewterware increased from $2,500 to $ 5,000 - Business Property On premises increased from $2,500 to $10,000 Off premises increased from $ 250 to $ 1,000 - Loss Assessment increased from $1,000 to $10,000 Personal Liability increased to $500,000 Medical Payments to Others increased to $5,000 for each person Personal Injury Liability Property Damage to property of others increased from $500 to $1,000 Tree Debris Removal (covered structure damage or no damage $2,000 ($500/tree) to covered structure but blocked driveway/handicap ramp; and when caused by weight of ice, snow or sleet, or wind or hail. Extended Theft Coverage for Residence Premises Occasionally Rented to Others. * Including misplacing or losing of jewelry - $2,500 maximum per article. C. To develop the premium for this option, multiply the Base Premium by the appropriate factor found in the table at the end of this manual. Use Endorsement UPC 419 NJ Ultra Endorsement. UPC NJ HO Manual HO-A12-1 Ed. 06/08/14

17 A13. Premier Endorsement Forms HO and HO A. For an additional charge the Premier Endorsement may be added to an HO or an HO policy. B. Coverages contained in this endorsement are: Personal Property (Coverage C) Replacement Cost Coverage Coverage D extended for one week when untenantability occurs due to civil authority or power interruption Special Computer Coverage $5,000 per occurrence Refrigerated Products loss due to power failure: $500 per occurrence Backup of Sewers, Drains or Sumps $5,000 per occurrence (a $250 deductible applies) Lock Replacement when keys are lost or stolen up to $500 per occurrence Additional coverage amounts: Money increased from $ 200 to $ 500 Securities increased from $1,000 to $ 2,000 Credit Cards, Fund Transfer Cards, Forgery increased from $ 500 to $ 5,000 Jewelry, Watches & Furs increased from $1,000 to $ 5,000 Electronic Apparatus in a Motor Vehicle increased from $1,000 to $ 5,000 Silverware, Goldware & Pewterware increased from $2,500 to $ 5,000 Business Property On premises increased from $2,500 to $ 5,000 Off premises increased from $ 250 to $ 500 Loss Assessment increased from $1,000 to $ 3,000 Personal Liability increased to $500,000 Medical Payments to Others increased to $5,000 for each person Personal Injury Liability Property Damage to property of others increased from $500 to $1,000 Extended Theft Coverage for Residence Premises Occasionally Rented to Others. C. To develop the premium for this option, multiply the Base Premium by the appropriate factor found in the table at the end of this manual. Use Endorsement UPC 420 NJ Premier Endorsement. UPC NJ HO Manual HO-A13-1 Ed. 06/08/14

18 A14. Protector Endorsement Forms HO and HO A. For a credit the Protector Endorsement may be added to an HO or an HO policy. B. Coverages contained in this endorsement are: Personal Property (Coverage C) Actual Cash Value Decreased Coverage B to 2% of Coverage A Decreased Coverage C to 25% of Coverage A C. Coverages removed from the policy are: Equipment Breakdown Coverage Identity Theft Expense and Resolution Services Coverage D. To develop the premium for this option, multiply the Base Premium by the appropriate factor found in the table at the end of this manual. Use Endorsement UPC 422 Protector Endorsement. UPC NJ HO Manual HO-A14-1 Ed. 06/08/14

19 A15. Premier Protective Condominium Endorsement HO Only A. For an additional charge the Premier Protective Condominium Endorsement may be added to an HO policy. B. Coverages contained in this endorsement are: Personal Property (Coverage C) Replacement Cost Coverage Coverage D extended for one week when untenanability occurs due to civil authority or power interruption Special Computer Coverage $5,000 per occurrence Refrigerated Products loss due to power failure: $500 per occurrence Lock Replacement when keys are lost or stolen up to $500 per occurrence Additional coverage amounts: Money increased from $ 200 to $ 500 Securities increased from $1,000 to $ 2,000 Credit Cards, Fund Transfer Cards, Forgery increased from $ 500 to $ 5,000 Jewelry, Watches & Furs increased from $1,000 to $ 5,000 Electronic Apparatus in a Motor Vehicle increased from $1,000 to $ 5,000 Silverware, Goldware & Pewterware increased from $2,500 to $ 5,000 Business Property On premises increased from $2,500 to $10,000 Off premises increased from $ 250 to $ 1,000 Loss Assessment increased from $1,000 to $10,000 Medical Payments to Others increased by $1,000 for each person Personal Injury Liability Property Damage to property of others increased from $500 to $1,000 C. To develop the premium for this option, multiply the Base Premium by a factor of Use Endorsement UPC 426 Premier Protective Condominium Endorsement. UPC NJ HO Manual HO-A15-1 Ed. 06/08/14

20 A16. Workers Compensation Coverage United Property & Casualty Insurance Company Workers Compensation Coverage is mandatory under New Jersey statutes. All policies that have liability coverage must also provide Workers Compensation Coverage for domestic servants or household employees. The following definitions and charges will apply: Inservants All employees engaged exclusively in household or domestic service whose principal duties are performed inside the residence. Outservants All employees engaged exclusively in household or domestic service whose duties are performed principally outside the residence for non-commercial purposes. Code Classification Description Annual Charge 0910 Occasional Servants Including drivers (Employed less than 40 hrs per week) $100,000/$500,000 Use Endorsement HO $1.00/Policy $500,000/$500,000 Use Endorsement HO $3.00/Policy 0912 Full Time Outservants including drivers Private Residence $100,000/$500,000 Use Endorsement HO $59.00/Person $500,000/$500,000 Use Endorsement HO $60.00/Person 0913 Full time Inservants including drivers Private Residence or Estates+ $100,000/$500,000 Use Endorsement HO $59.00/Person $500,000/$500,000 Use Endorsement HO $60.00/Person 0915 Full time Outservants including drivers Private Estates+ $100,000/$500,000 Use Endorsement HO $59.00/Person $500,000/$500,000 Use Endorsement HO $60.00/Person + For the purpose of this classification the term estate shall mean a private residence which occupies a tract of land exceeding five acres and in connection with which more than five full time servants are employed. UPC NJ HO Manual HO-A16-1 Ed. 06/08/14

21 A17. Maximum Credit Rule The maximum credit that may be applied to any policy cannot exceed 45%. This maximum applies to discounts provided in Rules A2, A3, A4, A5, A8, 401, and 404. If the sum of those credits exceeds 45% an adjustment will be made to lower the amount to equal 45%. Rule A2. Rule A3. Rule A4. Rule A5. Rule A8. Rule 401. Rule 404. Safe Home Credit 50 Plus Discount New Home Credit Renewal Credit Water Prevention Credit Superior Construction Protective Devices UPC NJ HO Manual HO-A17-1 Ed. 06/08/14

22 A18. Payment Plans The Company accepts the following methods of payment: A. 1 Pay Plan: Full payment of the total annual premium plus all policy fees at the inception of the policy. B. 2 Pay Plan: 50% of the total premium, plus fees, at the inception of the policy with the remaining 50% of the premium due 60 days after the inception of the policy. A $5 service charge is applicable to both installments. C. 3 Pay Plan: 40% of the total premium, plus fees, at the inception of the policy with the remaining 60% of the premium due in two equal installments 60 and 120 days after the inception of the policy. A $5 service charge is applicable to all installments. D. 4 Pay Plan: 25% of the total premium, plus fees, at the inception of the policy with the remaining 75% of the premium due in three equal installments 60, 120, and 180 days after the inception of the policy. A $5 service charge is applicable to all installments. E. 11 Pay Play: 11 equal monthly installments automatically deducted from insured s bank account. A $2 service charge is applicable to all installments. Part I UPC NJ HO Manual HO Ed. 06/08/14

23 COVERAGE AND DEFINITION TYPE RULES RULE 100. INTRODUCTION A. About The Homeowners Manual The Homeowners Policy Program provides property and liability coverages, using the forms and endorsements specified in this Manual. This Manual contains the rules and classifications governing the writing of the Homeowners Policy. The rules, rates, forms and endorsements of the company for each coverage shall govern in all cases not specifically provided for in this Manual. B. Manual Structure 1. Contents The Manual is divided into two primary sections, multistate general rules and state rules and rates. 2. General Rules These rules are grouped into the following categories: a. Part I Coverage And Definition Type Rules, b. Part II Servicing Type Rules, c. Part III Base Premium Computation Rules, d. Part IV Adjusted Base Premium Computation Rules, e. Part V Section I Property Additional Coverages And Increased Limits Rules, f. Part VI Section II Liability Additional Coverages And Increased Limits Rules, and g. Part VII Section II Liability Other Exposures Increased Limits Rules. 3. State Rules And Rates These rules are grouped into the following categories: a. Exceptions and Additional Rules, b. Special State Requirements, c. Territory Definitions, d. Base Class Premium Tables, e. Classification and Key Factor Tables, and f. Rates, Charges and Credits. Also, where ISO does not publish any state pages containing premiums, rates, charges and credits expressed in dollars and cents, each company using this Manual should furnish its manual holders with the state rate pages containing this information. 4. Form References The Manual refers to Forms HO 00 03, HO 00 04, HO 00 05, and HO These Form references are identified as follows: a. Homeowners 3 Special Form HO 00 03, b. Homeowners 4 Contents Broad Form HO 00 04, c. Homeowners 5 Comprehensive Form HO and d. Homeowners 6 Unit-Owners Form HO UPC NJ HO Manual HO Ed. 06/08/14

24 RULE 101. LIMITS OF LIABILITY AND COVERAGE RELATIONSHIPS A. Limits The limits of liability required under the Homeowners policy are as follows: 1. Section I Property Damage HO HO HO 0 04 or HO Coverage A Dwelling Refer to Rule 301. in the manual. For HO refer to Rule 507.A. Coverage B Other Structures HO HO % of A Coverage C Personal Property HO HO % of A HO or HO Refer to Rule 301. In the manual Coverage D Loss of Use HO or HO % of A HO % of C HO % of C Table 101.A.1. Property Damage Limits 2. Section II Liability (All Forms) B. All Forms Coverage E Personal Liability and Coverage F Medical Payments* Refer to Rule 301. In the manual *Unless otherwise stated, Coverage E limits apply on an occurrence basis; Coverage F limits apply on an each person basis. Table 101.A.2. Liability Limits The limit of liability for Coverages C or D of Section I and E or F of Section II may be increased. C. Form HO Or HO Under Coverage B of Section I, an additional amount of insurance may be written on a specific structure. Under Coverage C of Section I, it is permissible to reduce the limit of liability to an amount not less than 40% of the limit of a one and two family dwelling; 20% of the limit of a three family dwelling; and 15% of the limit of a four family dwelling. D. Form HO The limit of liability for Coverage A of Section I may be increased. UPC NJ HO Manual HO Ed. 06/08/14

25 RULE 102. DESCRIPTION OF COVERAGES The following is a general description of the coverages provided by the individual Homeowners Policy forms. The policy should be consulted for exact contract conditions. A. Section I Property Perils Insured Against Perils HO HO And HO HO Fire or Lightning Yes* Yes Yes** Windstorm or Hail, Explosion, Riot or Civil commotion, Yes* Yes Yes** Aircraft, Vehicles or Smoke Vandalism or malicious mischief Yes* Yes Yes** Theft Yes* Yes Yes** Volcanic eruption Yes* Yes Yes** Falling objects, Weight of Ice, snow or sleet, Accidental discharge or water or steam, Sudden and accidental tearing apart of a heating system or appliance, Freezing, Sudden accidental damage from electrical current. Additional risks with certain exceptions (Special Coverage) Yes*** No Yes**** * Special Coverage (Coverages A and B), Named Peril (Coverage C) ** Special Coverage (Coverages A, B and C) *** Special Coverage (Coverages A, B and D) **** Special Coverage (Coverages A, B, C and D) Table 102.A. Perils Insured Against Yes* Yes Yes** B. Section II Liability All Forms 1. Coverage E Personal Liability Covers payment on behalf of any insured for all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage arising out of an insured s premises or personal activities. 2. Coverage F Medical Payments To Others Covers medical expenses incurred by persons, other than the insured, who sustain bodily injury caused by an accident arising out of an insured's premises or personal activities. UPC NJ HO Manual HO Ed. 06/08/14

26 RULE 103. MANDATORY COVERAGES It is mandatory that insurance be written for all coverages provided under both Sections I and II of the Homeowners Policy. UPC NJ HO Manual HO Ed. 06/08/14

27 RULE 104. ELIGIBILITY A. All Forms Except HO And HO A Homeowners Policy may be issued: 1. To the owner-occupant(s) of a 1, 2, 3 or 4 family dwelling which is used exclusively for private residential purposes (except as provided in Paragraphs F. and H.). A 1 family dwelling may not be occupied by more than one additional family or two roomers or boarders. In a 2, 3 or 4 family dwelling, an individual family unit may not be occupied by more than two families or one family with two roomers or boarders; or 2. To the purchaser-occupant(s) who has entered into a long term installment contract for the purchase of the dwelling and who occupies the dwelling but to whom title does not pass from the seller until all the terms of the installment contract have been satisfied. The seller retains title until completion of the payments and in no way acts as a mortgagee. The seller s interest in the building and premises liability may be covered using Additional Insured Endorsement HO 04 41; or 3. To the occupant of a dwelling under a life estate arrangement when the Coverage A amount is at least 80% of the dwelling s replacement cost. The owner s interest in the building and premises liability may be covered using Additional Insured Endorsement HO 04 41; or 4. To cover dwellings in the course of construction provided the policy is issued only in the name of the intended owneroccupant(s) of the dwelling. 5. When two or more apartment units in a 2, 3 or 4 family dwelling are occupied by co-owners, each occupying distinct living quarters with separate entrances. Given these circumstances, a Homeowners Policy providing building coverage may be issued to only one of the co-owner occupants of the dwelling. The policy may be endorsed to cover the interest of the other co-owner(s) in the building and for premises liability. Use Additional Insured Endorsement HO A separate Homeowners Policy HO may be issued to the co-owner(s) occupying the other apartment(s) in the dwelling. It is permissible to extend the Homeowners Policy, without additional premium charge, to cover the interest of a nonoccupant joint owner in the building and for premises liability. Use Additional Insured Endorsement HO B. Form HO A Homeowners Policy may be issued to: 1. The tenant(s) (non-owner) of a dwelling or an apartment situated in any building; or 2. The owner-occupant(s) of a dwelling, cooperative unit or of a building containing an apartment not otherwise eligible for a Homeowners Policy under Paragraph A. provided the residence premises occupied by the insured is used exclusively for residential purposes (except as provided in Paragraph F.). The dwelling or apartment unit may not be occupied by more than one additional family or two boarders or roomers. C. Form HO A Homeowners Policy may be issued to the owner(s) of a condominium or cooperative unit which is used exclusively for residential purposes (except as provided in Paragraphs F. and H.). The unit may not be occupied by more than one additional family or two boarders or roomers. D. Seasonal Dwelling Subject to all other sections of this rule, a Homeowners Policy may be issued to cover a seasonal dwelling. E. Mobile Home, Trailer Home Or House Trailer A Homeowners Policy: 1. Shall not be issued to cover such structures under Coverage A Dwelling, but 2. May be issued to cover personal property in such structures as noted in Paragraph B. F. Permitted Business Occupancies Certain business occupancies are permitted, provided: 1. The premises is occupied principally for private residential purposes, and 2. There is no other business occupancy on the premises. When the business is conducted on the residence premises, refer to Rules 509. and 510. for Section I Coverage and Rules 607. and 608. for Section II Coverage. When it is conducted from an Other Residence, only Section II Coverage is available. Refer to Rules 607. and 608. G. Farm Property A Homeowners Policy shall not be issued to cover any property to which farm forms or rates apply under the rules of the company. UPC NJ HO Manual HO Ed. 06/08/14

28 H. Residence Held in Trust (All Forms Except HO 00 04) A Homeowners Policy may be issued to an occupant of a one-, two-, three- or four-family dwelling or a condominium unit when legal title to the dwelling or unit is held in trust and: 1. One of the occupants of the dwelling or condominium unit is the grantor/settlor of the trust; 2. The residence held in trust is used exclusively for residential purposes, except as provided in Paragraph F.; and 3. No trustee of the trust is: a. A partnership or joint venture; b. A corporation; c. A limited liability company; d. An organization other than a partnership or joint venture, a corporation or a limited liability company; or e. A licensed professional who provides ongoing professional services with respect to the profession for that individual is licensed, in connection with the administration of the trust. However, this Paragraph e. does not apply to an individual who is a relative of the grantor/settlor of the trust. Refer to Rule 526. for the rule of application. UPC NJ HO Manual HO Ed. 06/08/14

29 RULE 105. SECONDARY RESIDENCE PREMISES Rule 105. does not apply. UPC NJ HO Manual HO Ed. 06/08/14

30 RULE 106. PROTECTION CLASSIFICATION INFORMATION A. Codes For Protection Class B 9 10 Use Code B (Ineligible) B. Protection Information The Protection Class listings in the Public Protection Classification manual apply to risks insured under Homeowners Program policies. Use the Protection Class of the policy to determine the Base Class Premium for the policy. 1. The protection class indicated applies in a municipality or classified area where a single class of fire protection is available throughout (8, 7, 6, etc.). 2. In a classified area where two or more classifications are shown (e.g. 6/9), the classification is determined as follows: Distance to Fire Station Class 5 road miles or less with hydrant* within 1,000 feet, use first protection class - (e.g. 6-9 would use Class 6) 5 road miles or less with hydrant* beyond 1,000 feet 9 Over 5 road miles 10 * Hydrant distance requirement does not apply when an alternative credible water supply is available. Refer to footnotes under specific communities in Public Protection Classification manual for applicability. C. Protected Subdivision Rule A dwelling located in a recognized subdivision, which is currently located in a fire protection class 9 or 10 community, will receive the rating of the responding fire department if all of the following requirements are met: 1. The subdivision is under development with recorded plat and has paved all-weather 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 a standard fire hydrant, or the responding fire department is equipped to transport an adequate water supply for fighting a fire, or the responding fire department is equipped to pump from water sources within 1,000 feet of the home. Note: If a dwelling is located in a fire protection class 9 or 10 community and qualifies for protected subdivision rating under this rule, the application must be documented accordingly. UPC NJ HO Manual HO Ed. 06/08/14

31 RULE 107. CONSTRUCTION DEFINITIONS A. Frame Exterior wall of wood or other combustible construction, including wood iron-clad, stucco on wood or plaster on combustible supports, or aluminum or plastic siding over frame. B. Masonry Veneer Exterior walls of combustible construction veneered with brick or stone. C. 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 (Disregarding floors resting directly on the ground). D. Superior Construction 1. Non-Combustible Exterior walls and floors and roof constructed of, and supported by metal, asbestos, gypsum, or other noncombustible materials. 2. Masonry Non-Combustible Exterior walls constructed of masonry materials (as described in Paragraph C.) and floors and roof of metal or other non-combustible materials. 3. Fire Resistive Exterior walls and floors and roof constructed of masonry or other fire resistive materials. E. Mixed (Masonry/Frame) A combination of both frame and masonry construction shall be classed as frame when the exterior walls of frame construction (including gables) exceed 33 1/3% of the total exterior wall area; otherwise class as masonry. UPC NJ HO Manual HO Ed. 06/08/14

32 RULE 108. SEASONAL DWELLING DEFINITION A seasonal dwelling is a dwelling with continuous unoccupancy of three or more consecutive months during any one year period. UPC NJ HO Manual HO Ed. 06/08/14

33 RULE 109. SINGLE AND SEPARATE BUILDINGS DEFINITION A. Single Building All buildings or sections of buildings which are accessible through unprotected openings shall be considered as a single building. B. Separate Building 1. Buildings which are separated by space shall be considered separate buildings. 2. Buildings or sections of buildings which are separated by: a. A 6 inch reinforced concrete or an 8 inch masonry party wall; or b. A documented minimum two hour non-combustible wall which has been laboratory tested for independent structural integrity under fire conditions; which pierces or rises to the underside of the roof and which pierces or extends to the innerside of the exterior wall shall be considered separate buildings. Accessibility between buildings with independent walls or through masonry, party walls as described shall be protected by at least a Class A Fire Door installed in a masonry wall section. UPC NJ HO Manual HO Ed. 06/08/14

34 RULES RESERVED FOR FUTURE USE United Property & Casualty Insurance Company UPC NJ HO Manual HO Ed. 06/08/14

35 PART II SERVICING TYPE RULES RULE 201. POLICY PERIOD The policy may be written for a period of: A. One year and may be extended for successive policy periods by extension certificate based upon the premiums, forms and endorsements then in effect for the company. Rule 201.B., 201.C. and 201.D. do not apply. UPC NJ HO Manual HO Ed. 06/08/14

36 RULE 202. CHANGES OR CANCELLATIONS A. It shall not be permissible to cancel any of the mandatory coverages in the policy unless the entire policy is cancelled. B. If insurance is increased, cancelled or reduced, the additional or return premium shall be computed on a pro rata basis, subject to the minimum premium requirement. UPC NJ HO Manual HO Ed. 06/08/14

37 RULE 203. MANUAL PREMIUM REVISION A manual premium revision shall be made in accordance with the following procedures: A. The effective date of such revision shall be as announced. B. The revision shall apply to any policy or endorsement in the manner outlined in the announcement of the revision. C. Unless otherwise provided at the time of the announcement of the premium revision, the revision shall not affect 1. In force policy forms, endorsements or premiums, until the policy is renewed, or 2. In the case of a Deferred Premium Payment Plan, in force policy premiums, until the anniversary following the effective date of the revision. UPC NJ HO Manual HO Ed. 06/08/14

38 RULE 204. MULTIPLE COMPANY INSURANCE Rule 204. does not apply. [UPC] UPC NJ HO Manual HO Ed. 06/08/14

39 RULE 205. MINIMUM PREMIUM A. For prepaid policies a minimum annual premium shall be charged for each policy. B. When policies are written under a premium payment plan, no payment shall be less than the minimum premium for each annual period. C. The minimum premium may include all chargeable endorsements or coverages if written at inception of the policy. D. Minimum premium = shall be $75 for HO3, HO4, HO5 & HO6 policies. UPC NJ HO Manual HO Ed. 06/08/14

40 RULE 206. TRANSFER OR ASSIGNMENT Subject to the consent of the company, all the rules of this Manual and any necessary adjustment of premium, a policy may be endorsed to effect: A. Transfer to another location within the same state; or B. Assignment from one insured to another in the event of transfer of title of the dwelling. UPC NJ HO Manual HO Ed. 06/08/14

41 RULE 207. WAIVER OF PREMIUM A. When a policy is endorsed after the inception date, an amount of additional or return premium may be waived. B. Amount that may be waived = $5 or less UPC NJ HO Manual HO Ed. 06/08/14

42 RULE 208. WHOLE DOLLAR PREMIUM RULE Each premium shown on the policy and endorsements shall be rounded to the nearest whole dollar. A premium of fifty cents ($.50) or more shall be rounded to the next higher whole dollar. In the event of cancellation by the company, the return premium may be carried to the next higher whole dollar. UPC NJ HO Manual HO Ed. 06/08/14

43 RULE 209. RESTRICTION OF INDIVIDUAL POLICIES If a policy would not be issued because of unusual circumstances or exposures, upon request of the Named Insured, the company shall submit to the Commissioner of Insurance a written application providing for a restriction of the policy with no reduction in premium as provided under N.J.S.A. 29A-7.1 and Department of Insurance Regulation N.J.A.C. 1 1:4-7:1 to 7:3. UPC NJ HO Manual HO Ed. 06/08/14

44 RULE 210. REFER TO COMPANY Refer to company for: A. Rating or classifying any risk for which there is no manual rate. B. Situations where a portion of the property and/or liability coverage is reinsured on a facultative basis. The following rating procedure is available for the determination of the applicable premium: 1. Manual rules and rates shall apply to the portion of the property and/or liability limit(s) of liability retained by the company. 2. For any portion of the limit(s) of liability obtained by means of facultative reinsurance, the premium shall be the facultative cost for such insurance increased by a change up to but not exceeding 50% of the facultative cost. With respect to premium developed in accordance with this Paragraph 2., the company is responsible for maintaining complete files, including all details relating to selection of the premium charge. Whenever a risk is rated on a refer-to-company basis, each company is responsible for complying with regulatory or stator rate filing or disclosure requirements. Note Rates shall not be inadequate, excessive or unfairly discriminatory. UPC NJ HO Manual HO Ed. 06/08/14

45 RULE 211. ADDITIONAL INTEREST A. In addition to the mortgagee(s) shown in the Declarations or elsewhere in the policy, other persons or organizations may have an insurable interest in the residence premises. When coverage is not provided to such persons or organizations under Additional Insured Endorsement HO or its equivalent, their interest in the residence premises may be acknowledged by naming them in the endorsement referenced in Paragraph D. B. Such persons or organizations are entitled to receive notification if the policy is canceled or nonrenewed by the insurer. C. No additional charge is made for use of this endorsement. Rule 211.D. does not apply. UPC NJ HO Manual HO Ed. 06/08/14

46 RULES RESERVED FOR FUTURE USE United Property & Casualty Insurance Company UPC NJ HO Manual HO Ed. 06/08/14

47 PART III BASE PREMIUM COMPUTATION RULE 301. BASE PREMIUM COMPUTATION The Base Premium is developed by multiplying a Key Premium by a Key Factor and rounding to the nearest whole dollar ($0.50 or more rounded to the next higher whole dollar). A. All Forms 1. One And Two Family Dwelling a. Identify the Territory Premium b. Multiply Territory Premium by the Protection Class and Construction Type Factor c. Round the value in Step b. to the nearest whole dollar. d. Multiply the value in Step c. by the form factor e. Round the value in Step d. to the nearest whole dollar to arrive at the Key Premium f. Multiply the Key Premium from Step e. by the Tier Factor g. Round the value in Step f. to the nearest whole dollar h. Multiply the value in Step g. by the BCEG Factor i. Round the value in Step h. to the nearest whole dollar j. Using the key factor chart on the Territory Premium page, determine the key factor for the desired limit of liability. k. Multiply the value in Step j. by the Key Factor and round to the nearest whole dollar to arrive at the Base Premium. B. Interpolation Example 1. When the desired limit of liability is less than the highest limit shown, interpolate the Key Factors using the nearest limit above and below the desired limit, for example: a. $203,000 desired limit; the nearest limits are $200,000 and $205,000. b. For $200,000 the Key Factor is 2.837; for $205,000 the Key Factor is Figure the difference between the two Key Factors and divide by 5. This provides a factor per $1, =.02 c. Multiply the factor per $1,000 times 3, and add 2.837; the Key Factor for $200, x = d. The result, 2.897, is the Key Factor for this example. 2. The factors shown in the above interpolation example are for illustration only and are not necessarily the factors shown in the Key Factor Table of this Manual. C. The value in Step k. is called the Base Premium and all other calculation factors are applied to the Base Premium UPC NJ HO Manual HO Ed. 06/08/14

48 RULE 302. LOSS SETTLEMENT OPTIONS Paragraph A. of this Rule does not apply. B. Actual Cash Value Loss Settlement HO And HO Only 1. Introduction The policy provides building loss settlement on a replacement cost basis if, at the time of loss, the amount of insurance on the damaged building represents at least 80% of the full replacement cost of the building immediately before the loss. 2. Coverage Description The policy may be endorsed to provide building loss settlement exclusively on an actual cash value basis if, on the inception date of the policy, the Coverage A limit of liability selected by the insured is less than 80% of the full replacement cost of the dwelling. 3. Premium Computation The premium is computed by multiplying the Base Premium by the appropriate factor from the following table: Coverage A Limit Of Liability Equals Less Than % Of Replacement Value Factor 80%, but not less than 50% 1.05 Less than 50% 1.10 Table 302.B.3. Factors 4. Endorsement Use Actual Cash Value Loss Settlement Endorsement HO C. Special Loss Settlement HO And HO Only 1. Introduction The policy provides building loss settlement on a replacement cost basis if, at the time of loss, the amount of insurance on the damaged building represents at least 80% of the full replacement cost of the building immediately before the loss. 2. Coverage Description This percentage amount may be modified to 50%, 60% or 70% of replacement value without affecting the loss settlement provisions. If this option is selected, the Coverage A limit of liability representing 50%, 60% or 70% of replacement value is to be shown in the policy declarations. 3. Premium Computation To develop the Base Premium for the Coverage A limit of liability shown in the policy declarations: a. Multiply the Coverage A limit of liability by the appropriate factor from the following table and round to the nearest $1,000: % of Replacement Value Factor 50% % % 1.14 Table 302.C.3.a. Factors b. Develop a Base Premium in accordance with Rule 301. for the amount of insurance computed in preceding Paragraph a. c. Multiply the premium determined in preceding Paragraph b. by the appropriate factor from the following table: % of Replacement Value Factor 50%.96 60%.97 70%.98 Table 302.C.3.c. Factors 4. Endorsement Use Special Loss Settlement Endorsement HO UPC NJ HO Manual HO Ed. 06/08/14