Kansas Private Passenger Auto Program Underwriting Guide

Transcription

1 Underwritten by: Benchmark Insurance Company Kansas Private Passenger Auto Program Underwriting Guide New Business Effective Date: 2014/07/14 Renewals Effective: 2014/08/14

2 TABLE OF CONTENTS IMPORTANT CONTACT INFORMATION... 2 SECTION 1: GENERAL INFORMATION POLICY PERIOD BINDING AND COVERAGE EFFECTIVE DATES PAYMENT OPTIONS RENEWAL PROCEDURES ENDORSEMENT GUIDELINES RETURNED REMITTANCE POLICY SR-22 FILINGS RESTRICTED DRIVER ENDORSEMENT CANCELLATIONS REINSTATEMENTS RETENTION OF RISK... 7 SECTION 2: CLAIMS... 7 SECTION 3: COVERAGES LIABILITY PERSONAL INJURY PROTECTION... 8 LIMITS: STATUTORY LIMITS ONLY COLLISION AND OTHER THAN COLLISION MEDICAL PAYMENTS UNINSURED MOTORISTS/UNDERINSURED MOTORISTS COVERAGE RENTAL REIMBURSEMENT TOWING NON-OWNER COVERAGE... 9 SECTION 4: UNDERWRITING RULES ELIGIBILITY FOREIGN DRIVERS LICENSE NO U.S. DRIVERS LICENSE ACCEPTABILITY RULES... 9 ACCEPTABLE PROOF UNACCEPTABLE RISKS SECTION 5: RATING RULES DISCOUNTS GENERAL SURCHARGES APPLY THE UNACCEPTABLE VEHICLE SURCHARGE TO ALL COVERAGES FOR ANY RISK LISTED IN: UNACCEPTABLE OPERATOR PROFILE; UNACCEPTABLE VEHICLE PROFILE; MISCELLANEOUS UNACCEPTABLE RISKS; VEHICLES UNACCEPTABLE FOR PHYSICAL DAMAGE COVERAGE; AND ANY VEHICLE WITH A RED BOOK VALUE GREATER THAN $40, DRIVING RECORD SURCHARGES RATE CLASSES DRIVER ASSIGNMENT MISREPRESENTATION OF RISK TERRITORIES PHYSICAL DAMAGE RATING First Chicago Insurance Services Maverick UW Guide 1

3 IMPORTANT CONTACT INFORMATION Web Claims New Losses , Option 3 Existing Claims , Option 3 FAX Address First Chicago Insurance Services PO Box Richardson, TX Underwriting Phone FAX Address First Chicago Insurance Services PO Box 7090 Overland Park, KS Marketing Phone FAX Address First Chicago Insurance Services PO Box 7090 Overland Park, KS First Chicago Insurance Services Maverick UW Guide 2

4 SECTION 1: GENERAL INFORMATION 1.1 POLICY PERIOD Policies shall be written for 6 Month and 1 Month periods only. FCIS at its sole discretion may issue policies for a period less than or greater than 1 or 6 months. 1.2 BINDING AND COVERAGE EFFECTIVE DATES BINDING & EFFECTIVE DATE Coverage may not become effective or be bound until complying with items 1 through 6 below. APPLICATIONS Applications for coverage must be: 1. Completed in their entirety; 2. Supplemental application forms required must be completed in their entirety; 3. Signed by both the applicant and producer before binding coverage. This includes all forms required to fully complete the application. 4. Paid for by the applicant before binding coverage; 5. Compliant with the written program guidelines; 6. Compliant with the producer agreement; 7. Maintained and retained by the producer in accordance with the producer contract; and 8. Delivered to the Company within 72 hours of the Company s written request; All applications must be transacted utilizing First Chicago Insurance Services (FCIS) Policy Tracking System (PTS). PTS is the Company s system for real time production and tracking of policy transactions. PTS is First Chicago s primary method of documenting and controlling the effective date and time of each policy transaction, including new business applications. When you have completed the application process in PTS you will be able to deliver all necessary policy forms and endorsements to your customer at the point of sale. 1.3 PAYMENT OPTIONS Two premium payment options are offered for this program: (1) Pay-In-Full; or (2) 6 payment plan. Payment Plan Policy Term Payment Due To Bind Coverage Additional Payments Service Fee Payment Due Dates Pay-In-Full All 100% N/A N/A On or before the policy period effective date. 6 Pay 6-Month 18.0% Balance of premium in 5 additional payments $9 Payments Due On: effective date, 18 th, 48 th, 78 th, 108 th & 138 th days of policy term. REINSTATEMENT - $5 Payments received ON or AFTER the cancellation effective date on a non-payment cancellation; or after the expiration date will be assessed a $5 reinstatement fee. There is NO REINSTATEMENT FEE for payments received BEFORE the cancellation date on the notice of cancellation for non-payment of premium. First Chicago Insurance Services Maverick UW Guide 3

5 EXPENSE CONSTANT - $5 A $5 Expense Constant will be added to the initial payment on all new business policies. SPECIAL NOTE ON PREMIUM REMITTANCE: Premium remittances shall be made payable to First Chicago Insurance Services, unless the producer qualifies for participation in a sweep account with the MGA. A $25.00 fee shall be assessed to the payor for any remittance that is not honored for any reason by any financial institution or clearing house, other than by the request of the MGA. Receipt of premium by the producer does not constitute receipt by the MGA. 1.4 RENEWAL PROCEDURES Renewal offers will be mailed to the last known address of the named insured. As described in Section 1.3, Payment Options, above, the total premium or full amount of the first payment must be received by First Chicago Insurance Services on or before the due date of the renewal offer or the policy will expire. Policies may be renewed, with a gap in coverage up to 30 days after the expiration date. After 30 days, a new policy must be issued. 1.5 ENDORSEMENT GUIDELINES E & O carriers recommend producers obtain the insured s signature to confirm any policy changes requested. Endorsements Policy changes must be processed through FCIS PTS System, unless it is not possible to do so. The original copy must be retained by the producer and made available upon request. Do Not mail a copy of the signed request to FCIS unless specifically requested. When processing changes through PTS, the system will provide: 1. A printed confirmation of the policy change request. 2. The amount of payment required for the change and an estimate of the future payments. A payment should be collected from the insured at the time the change is processed. 3. An amended declaration page and ID Card. FCIS requires: 1. The policy must be in-force for a change to be processed. 2. An Inspection Form when: a. Adding Other Than Collision and Collision Coverage; b. Adding a vehicle that was previously deleted from the policy; c. A vehicle has Special Equipment ; d. Other Than Collision and Collision deductibles are being lowered; 3. The producer is responsible for re-screening driver and vehicle usage for all drivers and vehicles at the time the policy change is requested. FCIS Requires a signed request from the Named Insured for the following: 1. Requests for excluded driver or listed but not rated driver. Note: Driver exclusions are allowed only on coverages not required by statute (Other Than Collision, Collision, Rental & Towing). 2. Cancellations requested by the insured. First Chicago Insurance Services Maverick UW Guide 4

6 3. Removal of any coverage by the insured. Endorsements Not Processed Through PTS On rare occasions, it may not be possible to process an endorsement utilizing PTS. Whenever the producer is unable to process an endorsement utilizing PTS, the request must be faxed to FCIS. The faxed request should include the policy number, signature of the producer and the amount of premium collected by the producer for the endorsement. The original copy must be retained by the producer and made available upon request. Do Not mail a copy of the signed request to FCIS unless specifically requested. SPECIAL NOTE ON ENDORSEMENTS: Payment is required for all additional premium endorsements. Driver Class Changes The driver classification will be assigned using the attained age of the driver at time of issue, unless the driver s birth date occurs within 30 days of the effective date of the policy. Driver classification changes will be processed on a pro-rata basis for the addition or deletion of a driver. Premiums will not be reduced for Driver Class changes that occur during the policy period to drivers already on the policy. EXCEPTION: Change in marital status. FCIS requires a signed request from the Named Insured for all changes deleting a driver; requesting driver status of listed not rated; and driver exclusions. Note: Driver exclusions are allowed only on coverages not required by statute (Other Than Collision, Collision, Rental & Towing). Vehicle Changes All replacement and additional vehicles require MGA notification within 14 days of acquisition. The policy limits coverage for newly acquired vehicles. FCIS must be notified immediately for coverage changes regarding vehicle changes or newly acquired vehicles. An inspection form is required for any vehicle change that includes Physical Damage coverage. The producer is responsible for re-screening driver and vehicle usage for all drivers and vehicles at the time the policy change is requested. Address Changes If an insured moves out of state, the policy will be cancelled or non-renewed in compliance with Kansas Insurance Regulations. Policy premium will change for address changes occurring during the policy period. Determine the applicable rating territory based on the new zip code for the garaging location. IMPORTANT: Update the Vehicle Information Screen With New Zip For any change in zip code, please update the vehicle rating information (in addition to the mailing address) to reflect the new territory and rating information. First Chicago Insurance Services Maverick UW Guide 5

7 1.6 RETURNED REMITTANCE POLICY If the bank or financial institution returns a PAYOR S remittance for any reason other than the request of the MGA, a $25.00 fee will be assessed to the payor. A letter will be mailed to the named insured specifying that the amount of the insureds next payment will be the amount of the NSF, NSF Fee and the next scheduled payment. The insufficient funds check will be forwarded to collections if it has not been paid within 30 days of the date the insured is notified by us of the NSF item. Funds received will first be applied to cover the outstanding NSF items, and all excess amounts will be applied to the current policy term. 1.7 SR-22 FILINGS SR-22 s may be filed in the states of Kansas & Missouri only. An SR fee will be applied to the policy. SR-22 filings can only be made for: 1. The named insured or their spouse; or 2. A Family Member as defined in the policy language. (Generally, a person related to the named insured by blood or marriage who also is a member of the named insured s household.) SR-22 s are automatically generated by the FCIS PTS. Producer has no authority to file any SR- 22 form not generated from PTS. The State of Kansas requires the following information be included on all SR-22 forms: Insured s full name and address Drivers License Number Date of Birth Current Policy Number Effective date of policy number Complete name of insuring company (Benchmark Insurance Company) Signature of authorized representative of insurance company Social Security Number 1.8 RESTRICTED DRIVER ENDORSEMENT If the recipient of an SR-22 has been issued a Restrictive Drivers Permit by the State of Kansas, the restricted driver endorsement must be completed. 1.9 CANCELLATIONS Insufficient Funds (NSF) Transactions Regardless of the method of payment, or the payor, if a payment is returned or rejected by the financial institution, the policy will be cancelled immediately for non-payment of premium. The policy may only be reinstated if payment by cash, certified check or money order is received before the cancellation effective date. Other Cancellation Rules All cancellations will be computed on a pro-rata basis. The company may cancel the policy for any reason within the first sixty- (60) days of the policy period. First Chicago Insurance Services Maverick UW Guide 6

8 The mailing of notice of cancellation or non-renewal to the Insured s address as shown on the Declarations Page will be proof of cancellation or non-renewal. Policies cancelled for underwriting reasons may be considered for reinstatement upon receipt of required information prior to the final cancellation date and if there is no premium due at the time of reinstatement. Policies cancelled at the insured s request must be made in writing to First Chicago Insurance Services and include the insured s signature. The cancellation date will be no earlier than 12:01 a.m. of the day following the date the request was faxed or mailed, as evidenced by the U.S. Postal Service postmark. In case of the insured's death, either the spouse or power of attorney may request cancellation. A copy of the death certificate must accompany the request REINSTATEMENTS 1. Non Payment of premium: Policies may be reinstated with a gap in coverage for up to 30 days after the cancellation date with the receipt of the required payment. Policies will be reinstated as of 12:01 AM the day following payment receipt by First Chicago Insurance Services. 2. All other Cancellations: First Chicago Insurance may reinstate any policy cancelled for reasons other than Non-Payment of Premium at its sole discretion. Please contact underwriting for eligibility of reinstatement RETENTION OF RISK First Chicago Insurance Services may use MVRs, CLUE, A-Plus, Household Driver and DMV (title) reports to determine if any risk is properly rated. Rates may be adjusted, or policy cancelled, as needed, based upon information received via these reports. SPECIAL NOTE ON RISK ACCEPTANCE: This manual may not address every condition that may affect the acceptance of a particular risk. For this reason, the company must remain the final authority in the acceptance or continuation of any risk. SECTION 2: CLAIMS Please encourage your insured to report their claims directly to the First Chicago Insurance Services by calling the numbers listed below. Direct reporting not only speeds up the claims handling process but information is more accurate when communicated directly by the insured, claimant, and/or attorney. These numbers are also on the I.D. card. An Acord loss notice would not be required. Claims FAX First Chicago Insurance Services Maverick UW Guide 7

9 SECTION 3: COVERAGES 3.1 LIABILITY Combinations of Bodily Injury, Property Damage, UM must follow the below examples. Limits Bodily Injury $25,000 / $50,000 Property Damage $10,000 or $25,000 UM $25,000 / $50, PERSONAL INJURY PROTECTION Personal Injury Protection is required on all vehicles as required by the Kansas Automobile Injury Reparations Act. LIMITS: STATUTORY LIMITS ONLY 3.3 COLLISION AND OTHER THAN COLLISION VEHICLE INSPECTION IS REQUIRED WHEN OTHER THAN COLLISION AND COLLISION COVERAGES ARE REQUESTED. 1. See section 5.7 for of this manual for Rating Instructions for Physical Damage Coverages. 2. Completed vehicle inspection form and photos must accompany the application. 3. Other Than Collision and Collision must be written together. 4. Other Than Collision and Collision may not be written without Liability coverage. 5. Deductible combinations allowed: OTC $250 $500 $750 $1000 COLLISION $250 $500 $750 $ MEDICAL PAYMENTS Medical payments coverage is available in limits of $500 or $1, UNINSURED MOTORISTS/UNDERINSURED MOTORISTS COVERAGE Uninsured Motorist & Underinsured Motorist Bodily Injury (UM) a. The Kansas Automobile Injury Reparations Act requires that all automobile policies contain at least the minimum UM limits of 25/50. b. The UM limits must be equal to the BI limits. The UM limits must be the same for each vehicle on the policy. 3.6 RENTAL REIMBURSEMENT If purchased, this coverage provides reimbursement of up to $20 per day to a maximum of $600 for expenses incurred for the rental of a substitute auto when the insured vehicle is involved in a covered Physical Damage loss and is withdrawn from use for over 24 hours. This coverage is only applicable for the period of vehicle disablement. This coverage does not apply if there is an un-recovered theft of the insured automobile when the insured is eligible for rental reimbursement under the Other Than Collision portion of the policy coverage. 3.7 TOWING If purchased, towing coverage provides a total of $50 per disablement for emergency towing. Up to 2 tows are allowed per policy period. First Chicago Insurance Services Maverick UW Guide 8

10 3.8 NON-OWNER COVERAGE For individuals only who: (Coverage does NOT extend spouse or family members.) 1. do not own an auto; and 2. do not have a vehicle furnished for their regular use. Provides Bodily Injury, Property Damage, Personal Injury Protection, and Uninsured Motorists liability coverage for the named insured while they operate non-owned automobiles for personal use. Non-owned automobiles are automobiles that are not leased to, owned by, or furnished for the regular use of the named insured, their spouse or any household resident. Only the basic Bodily Injury and Property Damage limits of 25,000/50,000/10,000, PIP, and Uninsured Motorists limits of 25,000/50,000 are available. SECTION 4: UNDERWRITING RULES 4.1 ELIGIBILITY Private Passenger Automobiles 1. A private passenger auto is a four-wheel motor vehicle, other than a truck type, that is owned or leased under contract for a continuous period of at least 12 months, and: a. Not used as a public or livery conveyance for passengers; b. Not rented to others; c. Licensed for road use. 2. A pickup, van or SUV will be considered a private passenger automobile if the following criteria are met: a. Has no more or no less than 2 axels and 4 wheels; and b. Has a Gross Vehicle Weight of less than 10,000 lbs.; and, c. Is not used for the delivery or transportation of goods or materials unless such use is incidental to the insured s business of installing, maintaining or repairing furnishings or equipment, or d. Is used for Farming or ranching 4.2 FOREIGN DRIVERS LICENSE NO U.S. DRIVERS LICENSE ACCEPTABILITY RULES Drivers without a valid US Drivers License are UNACCEPTABLE UNLESS they: 1. Are Active U.S. Military; or 2. Are a citizen of a country other than the United States of America; and provide proof of acceptability as described in ACCEPTABLE PROOF. Unacceptable Drivers License status includes, but is not limited to: 1. Unlicensed; 2. Expired; 3. Revoked; 4. Suspended (Unless FCIS is filing an SR22 that will reinstate the license); 5. Never licensed; 6. No current license, including those listed above. First Chicago Insurance Services Maverick UW Guide 9

11 ACCEPTABLE PROOF Any Driver, meeting the qualifications above, without a valid U.S. Drivers License must provide one of the following: 1. U.S. Documentation: A valid military I.D. and the expired Drivers License. 2. Foreign Documentation a. Drivers License Foreign or International Drivers License b. Other Forms Of Identification i. Matricula ii. Photo non-u.s. voter registration card from North, Central or South America. iii. Passport from North, Central or South America. Similar forms of I.D. from other countries will NOT be accepted. 4.3 UNACCEPTABLE RISKS Unacceptable Operator Profile 1. Drivers with more than 16 points of surcharge in the past three years. 2. Drivers under the age of 21 with more than 8 points of surcharge in the past three years. 3. Any driver with three or more accidents during the past three years regardless of fault. 4. Drivers with more than one accident in the past 12 months. 5. Drivers with more than 2 DWI or DUI convictions. 6. Any driver using the vehicle for delivery in the course of employment, such as courier services, pizza delivery, etc. 7. Entertainers or celebrities. 8. Persons engaged in illegal activities, including drug related. 9. Mentally impaired drivers, if the disability affects the ability to safely operate a motor vehicle. 10. Physically impaired drivers, if the disability affects the ability to safely operate a motor vehicle. If the car is equipped to offset impairment the special equipment required must be described. 11. Drivers whose licenses are expired (unless full-time active military), suspended (without SR-22), cancelled, or revoked. 12. Drivers without a valid drivers U.S. license. (exception: Foreign Drivers License) 13. Drivers with adverse prior claims history. 14. Military personnel not permanently stationed in Kansas. 15. Temporary residents of Kansas, including out-of-state students at Kansas schools. Unacceptable Vehicle Profile 1. Any vehicle over 30 years old, antiques, obsolete models, rare and gray market vehicles. 2. Vehicles garaged outside Kansas, including vehicles used by students attending school outside Kansas. 3. Any risk where the number of vehicles exceeds the number of drivers by more than one. 4. Vehicles used in speed or racing contests; vehicles that are altered to increase performance, or "Hot Rod" vehicles. 5. Police or emergency vehicles. First Chicago Insurance Services Maverick UW Guide 10

12 6. Vehicles used in delivery, including, but not limited to, the delivery of mail, newspapers, pizza or other types of retail or wholesale delivery. 7. Vehicles used for public livery such as taxis, limousines, etc. 8. Suzuki Samurai, Dune Buggies, or similar off-road vehicles. 9. Jeep CJ5 or CJ7 models prior to Vehicles owned or leased by a corporation or partnership. 11. Vehicles used in the business of a trucker. 12. Vehicles used in business except Artisan Use as described under Business Use. 13. Vehicles not titled to or not in the process of being titled to the named insured (or spouse) 14. Any vehicle that has a TV screen or computer monitor visible to the driver. (This does not include navigation systems that come as standard equipment from the factory on certain cars.) 15. Vehicles not leased or owned by (titled to) the named insured, vehicles rented to others, vehicles leased or rented for less than 12 consecutive months. 16. Parade or show cars; altered vehicles (we will allow alterations in case of physical handicap); kit cars; RV or RV equipped vehicles; wreckers; tow trucks; buses; step vans; flat beds; dump trucks; or vehicles with a load capacity 1 ton or greater. 17. Classic Autos: A classic auto is an auto over 25 years old and which because of limited production or exceptionally fine workmanship, is a rarity or of historic interest. 18. Replica autos 19. Vehicles with fiberglass or stainless steel bodies. 20. Vehicles used to carry explosive or flammable materials. 21. Mobile homes, trailers, motor homes, or any vehicle used as a primary residence. 22. Conversion vans or conversion trucks. 23. Vehicles as described under Section 5.2 Business Use SPECIAL NOTE ON INELIGIBILITY Vehicles Unacceptable for Physical Damage Coverage 1. Vehicles over 15 model years old. ANY EXCEPTIONS MUST BE APPROVED IN ADVANCE BY FAXING AN INSPECTION REPORT AND PHOTOS, FOR UNDERWRITING APPROVAL PRIOR TO TAKING AN APPLICATION. 2. Special vehicles with Indianapolis 500 pace car insignia. 3. Private passenger automobiles with a symbol over: i. over 21 - Model Year 1990 thru 2010; ii. over 33 - Model Year 2011 and greater. 4. Vehicles with a value over $40, Vehicles with existing damage that exceeds $1500. Miscellaneous Unacceptable Risks 1. Risks with Material Misrepresentation on the application. 2. Applications where all pertinent rating information is not available prior to binding coverage. This information would include but is not limited to the following; Drivers License Numbers, VIN s, Garaging Location, Operator Date of Birth. SPECIAL NOTE ON VEHICLE ACCEPTANCE: Maximum value per unit for physical damage coverage on any vehicles is $40,000. If a change during the policy period results in a risk that would otherwise not have been eligible for coverage, refer to the MGA for applicable rate. First Chicago Insurance Services Maverick UW Guide 11

13 SECTION 5: RATING RULES 5.1 DISCOUNTS NOTE: The maximum discount for any coverage on each vehicle is 40%. The following discounts apply to Bodily Injury (BI), Property Damage (PD), Personal Injury Protection (PIP), Other Than Collision (OTC), and Collision (COLL). EXCEPTION: The defensive driver discount will not be taken into consideration with respects to the maximum discount. If the maximum discount rule is applied to a driver, the defensive driver discount will be added to the maximum discount where applicable. In only this circumstance, the maximum discount will be 45%. 1. Multi-Car Discount 22% BI, PD & PIP / 11% OTC & COLL This discount applies to each vehicle with like coverage regardless of driver class. EXAMPLE: If vehicle #1 has full coverage, but vehicle #2 has liability only, the discount would apply only to BI, PD & PIP on each vehicle. 2. Home Owners Discount 7% Applies when the named insured both owns and occupies the residence where the vehicle(s) is(are) regularly garaged. Applies when the residence is owner occupied single-family residence, condominium, townhouse or mobile home. Evidence of ownership includes one of the following: Mortgage Payment Booklet or Statement Copy of Homeowner or Dwelling Policy Declaration Page Tax Statement Deed of Trust The address of any proof must match the Policy address and the named insured or spouse must be listed. 3. Transfer Discount a. Transfer Discount with no lapse in coverage 10% A Transfer discount will where an insured can show proof of 6 months continuous prior coverage where there is no lapse in coverage. b. Transfer Discount with lapse in coverage up to 30 days 5% A Transfer discount will apply where an insured can show proof of 6 months continuous prior coverage where the lapse is not more than 30 days. Proof of Prior Coverage may be one of the following items and should be independently verified by the producing agent: Declarations Page Renewal Declaration or Certificate Renewal Offer or Non-Renewal Notice Liability Insurance Card (with agent verification) Other forms submitted to and deemed acceptable by FCIS 4. Renewal Discount A renewal discount of 5% is applied at each six month anniversary of a policy with FCIS. The maximum allowable combination of Transfer and Renewal discounts is 20%. To be eligible for the renewal discount, a policy must have no claims or chargeable accidents in the previous 6 months. First Chicago Insurance Services Maverick UW Guide 12

14 5. Driving Record Discount 10% (Applies to BI, PD, PIP, and Collision coverages) Kansas Discount will apply for drivers who, meet all of the requirements below: a. A valid U.S. drivers license originally issued at least 36 months prior to the effective date; b. A clean driving record in the last 36 months; c. No chargeable accidents in the last 36 months; d. No violations or suspensions in the last 36 months; and e. No financial responsibility filing in the last 36 months. 6. Defensive Driving Discount 5% (Applies to BI, PD, PIP, OTC and Collision coverages) A discount will apply for all drivers who in the last three years have successfully completed a motor vehicle accident prevention course approved by the national safety council or a governmental agency such as the state board of education. 7. Paid In Full Discount 5% (Applies only to 6-Month Policy Terms) (Applies to BI, PD, PIP, OTC & Collision coverages) A paid in full discount applies to all policies paid in full at or before policy inception. All additional premium transactions must be paid in full at the time endorsement is processed or the discount will be removed from the policy. 5.2 GENERAL SURCHARGES Liability With Physical Damage 7.5% 1. Applied by vehicle, not by policy (vehicle specific). 2. Applies only when the specific vehicle s coverage includes OTC and Collision. 3. Applies to only BI, PD, and PIP. Inexperienced Operator Incomplete MVR History - 35% 1. Surcharge any driver for whom an MVR is unobtainable; or 2. Drivers 21 and over require 3 full years of driving history on the MVR. Surcharge any driver who does not meet this requirement; or 3. Drivers 21 and over who has been licensed less than 2 years UNLESS proof of completion of driver s training/education course is provided. 4. Exception: Not applicable to Foreign Drivers License. First Chicago Insurance Services Maverick UW Guide 13

15 Business Use - 20% Apply the Business Use surcharge to BI, PD, PIP and COLL for: 1. Private passenger automobiles used in business; 2. Utility vehicles owned or leased by an individual and engaged in Artisan Use. Artisan Use is defined as ONE utility vehicle used by the insured for business as a contractor or artisan to transport tools and supplies incidental to the insured s trade or business. The vehicle is eligible for coverage, provided the vehicle is used in a construction or contractor s related trade listed below: Carpentry Heating and Air Conditioning Electricians and Electrical Contracting Plaster/Drywall Masonry Trades NOT eligible include: Pest Control Roofing Painting Tile & Marble work Plumbing, Floor Laying, Glasswork, Landscaping Siding Installation SPECIAL NOTE ON INELIGIBILITY: Multiple Artisan Use vehicles are not eligible. Vehicles not eligible for the Business Use Surcharge include: 1. Vehicles with advertisements or logos. 2. Vehicles that go outside of a 75-mile radius. 3. Vehicles used in the delivery or pick-up of goods or persons for hire. Unacceptable Vehicle Surcharge - Applicable To Unacceptable Risks - 100% APPLY THE UNACCEPTABLE VEHICLE SURCHARGE TO ALL COVERAGES FOR ANY RISK LISTED IN: 1. UNACCEPTABLE OPERATOR PROFILE; 2. UNACCEPTABLE VEHICLE PROFILE; 3. MISCELLANEOUS UNACCEPTABLE RISKS; 4. VEHICLES UNACCEPTABLE FOR PHYSICAL DAMAGE COVERAGE; AND 5. ANY VEHICLE WITH A RED BOOK VALUE GREATER THAN $40,000. First Chicago Insurance Services Maverick UW Guide 14

16 5.3 DRIVING RECORD SURCHARGES SPECIAL NOTE ON ACCIDENTS / VIOLATIONS: If any accident or violation is not listed, please call for clarification. Apply the Driving Record Surcharges to BI, PD, and COLL for: 1. Major Violations 5 points a. DWI, DUI, Education program required, or failure to undergo testing under implied consent law. b. Leaving scene of accident, hit and run, or failure to stop and give information. c. Negligent homicide or any felony conviction arising out of the operation of a motor vehicle d. Driving while unlicensed or while license is suspended or revoked. 2. Intermediate Violations & Accidents 3 points a. Accident; single car accidents will be considered at fault. Other accidents will be considered chargeable unless proof is submitted with the application indicating that the insured was not at fault. Contributory notations on the police report will be considered at fault. POINTS ARE ADDED TOGETHER FOR BOTH A CHARGEABLE ACCIDENT AND ANY OTHER VIOLATION OCCURRING ON THE SAME DATE. b. Failure to yield to an emergency vehicle. c. Driving too fast for conditions, excessive acceleration, and failure to control speed or vehicle. d. Driving on wrong side of road, driving wrong way, or driving on the sidewalk. e. Failure to stop or remain stopped for a school bus. f. Displaying altered driver s license, or unlawful use of driver s license. g. Consumed alcohol while driving. h. Following too close, i. Speed Contest or Racing, j. Fleeing from or attempting to elude a police officer, k. Reckless driving or similar charge. 3. Minor Moving Violations 1 point first violation, 2 points each additional a. Speeding. b. Disregarding any stop sign, red light, or any official traffic control device. c. Failure to yield right of way. d. Unsafe lane change. e. Illegal or Improper turn or backing. 4. Minor Non-Moving Violations 1 point a. Expired license or failure to display license. b. Violated DL Restriction. c. Failure to use turn signal. 5. Out of State Driver s License 0 points New Kansas residents must secure a Kansas driver's license within 30 days. Military Personnel are not required to obtain a Kansas Drivers License. First Chicago Insurance Services Maverick UW Guide 15

17 6. No surcharge for the following: a. No motor vehicle inspection sticker, b. Defective equipment, c. No seat belt, d. Citation for no evidence of liability insurance. 5.4 RATE CLASSES 1. Married drivers not living with spouse must be rated single. 2. No multi-named insureds will be bound for coverage unless the person in question is a legal spouse or a dependent child under age 21 and proof is provided. 3. Named Insured and Parent or Legal Guardian must sign applications for any Named Insured under the age of DRIVER ASSIGNMENT Each driver must be assigned to at least one vehicle. Unless driver assignments are clearly noted on applications or endorsement requests, driver assignment will be made "highest to highest". Knowingly assigning drivers improperly to obtain a lower premium is considered insurance fraud. If a loss occurs involving an incorrectly rated driver's use, an endorsement correcting the driver assignment will be applied back to the policy's inception date, and charged for accordingly. 1. How to rate drivers and vehicles a. A driver's rate is determined by the combination of driver class and any discounts and surcharges; and b. A vehicle's rate is determined by the combination of symbol and model year and any discount and surcharges associated with the vehicle. 2. Equal number of vehicles and drivers Each driver must be assigned to a different vehicle, according to the actual use. It is fraudulent to incorrectly assign drivers for a lower rate. 3. More drivers than vehicles Beginning with the highest rated drivers, assign a different driver to every vehicle according to the actual use. The highest rated driver(s) must be assigned to a vehicle. Thus, excess drivers will be the lowest rated drivers, and need not be assigned. It is fraudulent to incorrectly assign drivers for a lower rate. 4. More vehicles than drivers a. FCIS has a specific class filed for Excess Vehicles. b. Beginning with the highest rated vehicles, assign a different driver to each vehicle according to the actual use. Thus, excess vehicles will be the lowest rated vehicles and rated as below. It is fraudulent to incorrectly assign drivers for a lower rate. 5.5 MISREPRESENTATION OF RISK Kansas Statute recognizes the responsibility and obligation of the insured to truthfully and fully complete an application for insurance. Material misrepresentation of facts on the application, and/or subsequent correspondence, may affect the insured s eligibility to receive the benefits of the insurance contract. All persons in the insured's household age 15 or older must be listed on First Chicago Insurance Services Maverick UW Guide 16

18 the application. All married insured's must give driver information for the spouse in the drivers section of the application. 1. The MGA may cancel the policy, or collect additional premium due from inception, should the misrepresentation be discovered. 2. The MGA may deny payment of a claim on a policy if information presented on an application, and/or subsequent documentation is false or misleading and the correct information would result in an Unacceptable Risk or affect the nature of the risk insured. 3. Agents should be careful to obtain accurate information in the following areas that are most often misrepresented: A. All members of the household age 15 and over, along with all other regular or frequent operators, including children away from home and/or college and/or non-custodial children must be listed on the application. B The correct garaging address and zip code. C. Business Usage of the vehicle. 5.6 TERRITORIES Territories are defined by ZIP code. Use the ZIP code for the location where the vehicle is principally garaged. 5.7 PHYSICAL DAMAGE RATING Vehicle is rated based upon the year, make and model. Coverage is provided on an ACV basis only. Properly Rating Physical Damage VIN A valid VIN is an Underwriting Requirement of FCIS. PTS will determine the proper Year, Make, Model, Symbol and rate when a valid VIN is entered. Year Make Model When unable to obtain a rate by entering the VIN, PTS can rate based on year, make and model. 1. Verify that you have the correct VIN correct and that it matches the vehicle; 2. Re-enter the correct VIN for PTS VIN rating; 3. If still unable to obtain a rate based upon VIN: a. Enter the year, make and model of the vehicle; b. PTS will bring a list of vehicles that match the year, make and model criteria; c. Select the vehicle that correctly corresponds to the insured vehicle; d. PTS will rate based upon the entered criteria. First Chicago Insurance Services Maverick UW Guide 17