BULLETIN OREGON MUTUAL INSURANCE COMPANY TO: March 6, Regional Office. All Nevada Agents

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1 OREGON MUTUAL INSURANCE COMPANY TO: All Nevada Agents DEPT: DATE: BULLETIN NO: March 6, 2007 Regional Office 2033 SUBJECT: New Homeowner Program Improved Rates for your Customers We have good news about the Oregon Mutual Homeowner Program! For new Homeowner business effective March 10, 2007 we are implementing our PCS (Personal Characteristic Score) Homeowner Program. This program will expand Oregon Mutual s competitive range in the Homeowner market. The PCS program incorporates a wider range of risk characteristics in the rating process, creating a better match between premium and the individual risk. These include but are not limited to: Age and value of dwelling Protection class Number and types of claims Time since last significant claim Liability limit and policy deductible Package and other discounts These characteristics are used to generate a PCS rating factor which will be used in conjunction with an insurance credit score to determine the policy premium. There is no longer a need for you to pre-tier customers as preferred or standard prior to the quote/rating process. The OMI BizLink quote system will automatically provide our best possible premium for each risk based on the data entered. Other changes and enhancements for the new PCS Homeowner Program A new 6% Advance Submission Credit. This is applied to policies submitted 30 days or more prior to the effective date. A Newly Purchased Home Credit of 10%. This applies to homes that have been purchased by the owner within two months prior to the effective date of the policy. This credit gradually decreases over a four-year period. If the home also qualifies for the new home construction credit, the policy will receive whichever credit is greater. We have added the following endorsements to the basic policy at no additional cost: Homeowner Accidental Death Benefit M0005H, Refrigerated Food Products H155, and Sports Equipment M0030H. We have realigned several rating territories. Please refer to the revised zip code territory definitions. Enhancements that apply to both the PCS Homeowner Program and to existing homeowners as they renew We have increased the Ordinance or Law coverage limit from 10% to 25% for both our Functional Replacement Cost Loss Settlement and Replacement Cost Provision endorsements. The limit of coverage provided will print on the declaration page. We are introducing new optional Liability and Physical Damage Coverage for policyholders that own All- Terrain vehicles. We have increased the threshold for chargeable claims from $500 to $1000. This new program along with the other Homeowner enhancements noted creates an excellent opportunity for you to grow your Personal Lines business with Oregon Mutual. Applications can be submitted - via application or OMI BizLink quote/upload. (Over) BULLETIN

2 New BizLink feature allows you to quote existing Homeowners Similar to our auto rating system on BizLink, we have added a Quote Existing feature to the Homeowner rating system. This new feature will allow you to re-quote an existing OMI Homeowner policy into this new program. The feature also enables you to re-price an inforce policy when a coverage change is made. In order to quote the new PCS market on existing OMI policies that have not yet renewed: Select the Quote Existing option in BizLink quote/upload. Make changes, if any, and select the calculate button to display the proposal for the current (Market 3) homeowner policy. On the proposal screen select re-quote market 3 to market 4. (Market 4 is the new PCS program.) On the next screen, choose the desired effective date. It must be 3/10/2007 or later to be eligible for market 4. You can then proceed with the market 4/PCS quote. If you want to review the previous Homeowner policy premiums again, return to the quote screen, select edit eff and exp dates and reselect the OMI policy effective date. If you are interested in rewriting an existing customer in the new Homeowner program, please contact your Personal Lines Underwriter for assistance. Please contact your Personal Lines Underwriter or Agency Marketing Manager if you have any questions regarding our new PCS Homeowner Program. We are eager to write new business and look forward to assisting you. Soon to follow this change will be enhancements increasing the competitive range of our Personal Auto Program. Watch for our announcing premium reductions for many of the drivers in your area. We appreciate your support of Oregon Mutual Insurance Company. Roger McDougal, CPCU Personal Lines Business Unit Manager Our Mutual Interest is You

3 OREGON MUTUAL INSURANCE COMPANY M0005H (2-07) HOMEOWNER ACCIDENTAL DEATH BENEFIT AGREEMENT We will pay $1000 for the death of an insured caused by an accident occurring on the insured premises. The death must be the direct result of the accident, independent of all other causes and must occur within 90 days after the date of the accident. EXCLUSIONS: We will not pay for death caused directly or indirectly by: 1. bodily or mental infirmity or bacterial infections or any other kind of disease or medical or surgical treatment (except surgical operations made necessary solely by injuries covered by this endorsement); 2. war (declared or undeclared) including civil war, insurrection, rebellion, revolution, warlike acts by a military force or personnel or any consequence of any of these. Discharge of a nuclear weapon shall be deemed a warlike act even if accidental; 3. any nuclear hazard (nuclear means nuclear reaction, radiation, radioactive contamination, including radon or any result of these). This includes the negligent, defective or improper design or construction or maintenance of a nuclear facility or other act or omission which results in a nuclear hazard; 4. earthquake, tornado, hurricane, flood, volcanic eruption or other natural disasters; 5. suicide whether sane or insane; and 6. motorized vehicles. M0005H (2-07) FRM

4 OREGON MUTUAL INSURANCE COMPANY H155 (6-95) ADDED PERILS FOR REFRIGERATED FOOD PRODUCTS We cover loss to contents of a freezer or refrigerated unit on the insured premise. We pay no more than $500. The covered contents must be owned by you. The loss must be caused by change in temperature resulting from: 1. Interruption of electrical service to refrigeration equipment. The interruption must be caused by damage to the generating or transmission equipment; or 2. Mechanical or electrical breakdown of the refrigeration system. You must maintain the refrigeration equipment in proper working condition. No deductible applies. H155 (6-95) FRM

5 OREGON MUTUAL INSURANCE COMPANY M0030H (2-07) SPORTS EQUIPMENT ENDORSEMENT This endorsement insures against accidental direct physical loss to sports equipment caused by perils not otherwise excluded. Sports equipment not eligible for this coverage include motorized equipment, watercraft, aircraft including hang gliders or parachutes, jet skis, and scuba diving equipment. Our limit of liability is $1500 and is subject to the policy deductible. This special limit is the total limit per occurrence for all sports equipment losses not included in the named perils for personal property. EXCLUSIONS THAT APPLY TO SPORTS EQUIPMENT a. loss or damage caused (1) by any refinishing, renovating or repairing process; (2) by dampness of atmosphere and/or extremes of temperature; (3) by gradual depreciation, inherent defect or faulty manufacture. b. breakage, marring, scratching, tearing or denting unless caused by (1) fire; (2) theft; or (3) collision or derailment or overturn of a vehicle on which the insured property is being transported. c. loss or damage caused by or resulting from use of the insured property for the purposes for which it was intended. d. infidelity of the insured's employee or persons to whom the insured property may be entrusted or rented. M0030H (2-07) FRM

6 OREGON MUTUAL INSURANCE GROUP G0062H (2-07) MISCELLANEOUS SCHEDULED PROPERTY We cover the classes of personal property indicated below by a limit. This coverage is subject to all policy terms that apply to property coverage unless amended by this endorsement. See attached G0062H Schedule. Effective Date: Class of Property Deductible Limit Premium 1. Artisan's Tools and Equipment As scheduled Unscheduled 2. Electronic Sound Equipment As scheduled 3. Family, Garden, or Farming Equipment As scheduled 4. Horses, Ponies, and Project Animals (Named Peril) 5. Office Machines and Equipment 6. Recreational Trailers (not boat trailers) 7. Recreational Motor Vehicles $ $ $ NEWLY ACQUIRED PROPERTY We cover newly acquired property provided that it is of a class already covered under this endorsement and for an amount not more than 25 percent of the limit for that class of property or $10,000, whichever is less. The insured must report this newly acquired property to us within 30 days of acquisition and pay any additional premium from the date acquired. PERILS INSURED AGAINST 1. Horses, Ponies and Project Animals - We insure for: a. Death or destruction which results directly from: 1) fire and lightning; 2) windstorm, cyclone, tornado, hail, explosion, riot, riot attending a strike, civil commotion, aircraft, objects falling from aircraft, and smoke; 3) earthquake, flood, and collapse of bridges or culverts; 4) collision or derailment or overturn of a vehicle on which the insured property is being transported; collision with other vehicles except those owned or operated by the insured or by any tenant of the insured; 5) standing, sinking, burning, or collision of vessels, including General Average and salvage charges incurred; 6) accidental shooting, except by the insured or employees of the insured; 7) drowning; 8) artificial electricity; 9) attack by dogs or wild animals; 10) collapse of building. b. Theft, but excluding escape or mysterious disappearance. 2. All Other Classes of Property (Other than Horses, Ponies, and Project Animals) - We insure for all risks of physical loss to the described property unless otherwise excluded. WE DO NOT PAY FOR: a. Loss or damage caused by wear and tear, gradual deterioration, insects, vermin, inherent vice, latent defect, mechanical breakdown, or faulty manufacture; b. Loss or damage caused by corrosion, rust, dampness, freezing, extremes of temperature, or overheating; c. Damage sustained due to or resulting from any repairing, restoration, or retouching process; G0062H (2-07) Page 1 of FRM

7 d. Breakage, unless caused by any of the following perils: fire, lightning, aircraft, theft or attempted theft, cyclone, tornado, windstorm, earthquake, flood, explosion, malicious damage, or collision, derailment or overturning of conveyances; e. Loss of market, damage or deterioration arising from delay; f. Loss by disappearance; loss or shortage disclosed upon taking inventory; or unexplained loss; g. Loss resulting from any electrical injury or disturbance to electrical appliances, devices, or wiring from artificial causes unless fire ensues, and if fire does ensue, we shall be liable only for its proportion of loss caused by such ensuing fire; and h. As respects recreational motor vehicles, 1) loss or damage caused by or resulting from use of the recreational motor vehicle in any business or occupation, or while rented to others; 2) loss or damage caused by or resulting from the operation of a recreational motor vehicle in any racing, speed or jumping contest or in practicing or preparation for any such contest. EXCLUSIONS THAT APPLY TO MISCELLANEOUS SCHEDULED PROPERTY In addition to the exclusions contained in the General Policy Provisions - Exclusions That Apply to Property Coverages, we do not pay for any loss resulting directly or indirectly from misappropriation, secretion, conversion, infidelity or any dishonest act on the part of the insured or other party of interest, their employees or agents, or others to whom the property may be entrusted (except carriers for hire). HOW MUCH WE PAY FOR LOSS OR CLAIM 1. Valuation - Unless otherwise stated in this endorsement, the value of the covered property is not agreed upon but shall be ascertained at the time of loss or damage. We pay the least of the following amounts: a. The actual cash value of the property at the time of loss; b. The amount for which the property could reasonably be expected to be repaired or replaced (to the extent practical) with property substantially identical to the property lost or damaged; c. An amount not greater than the insured's interest in the property; or d. The applicable limit. 2. Deductible - The deductible under How Much We Pay for Loss or Claim is amended by this endorsement. We will pay for loss insured under the provisions of this endorsement less the deductible amount indicated for that class of property on the schedule. 3. Coinsurance - We will pay no more than the amount the loss bears to the actual cash value of the property described at the time of loss. 4. Loss to a Pair or Set - In case of a loss to a pair or set, we may elect to: a. repair or replace any part to restore the pair or set to its value before the loss; or b. pay the difference in the actual cash value of the pair or set just before the loss and the actual cash value just after the loss. 5. Restoration of Limit of Liability - The limit under this endorsement shall not be reduced except for a total loss of a scheduled article. If a claim is paid for total loss of a scheduled article, the unearned premium applicable to the lost article will be refunded to you or applied to the premium due on articles replacing those on which the claim was paid. 6. All-Terrain Vehicles - In addition to the limit shown in the schedule, we agree to provide up to $1,500 for each all-terrain vehicle scheduled to cover custom parts and equipment for the perils insured against. Custom parts and equipment include permanently attached accessories including, but not limited to, custom exhaust, custom painting, chroming, decorations, devices, electronic equipment, racks, storage compartments or other items not originally installed by the manufacturer as standard equipment and trailers designed to be pulled behind an all-terrain vehicle. This coverage is additional insurance. G0062H (2-07) Page 2 of FRM

8 G0062H SCHEDULE Total Items Scheduled: Effective Date: Article Description Limit $ G0062H Schedule FRM

9 OREGON MUTUAL INSURANCE COMPANY M8622HN (3-07) IMPORTANT NOTICE TO POLICYHOLDERS Dear Policyholder, With this renewal we have made the following enhancements in our Homeowner Program. Ordinance and Law Coverage If you have purchased the optional Replacement Cost Provisions for your home, we have increased the amount of Ordinance and Law Coverage from 10% to 25% of the limit shown for your insured residence. This change is shown on your Declaration page, and there is no additional charge for the increase to 25% of your residence limit. Should you have any questions regarding this change or the amount of Ordinance and Law Coverage you should purchase, please contact your Oregon Mutual agent. All Terrain Vehicle Coverage We now have optional Liability and Physical Damage Coverage available for policyholders who own or are thinking about purchasing an All Terrain Vehicle. For complete information on eligibility and rates for All Terrain Vehicle Coverage, please contact your Oregon Mutual agent. Thank you for insuring with the Oregon Mutual Insurance Group. Roger McDougal, CPCU Personal Lines Business Unit Manager Our Mutual Interest is You M8622HN (3-07) FRM