Underwriting Guidelines Homeowners Arizona

Transcription

1 Underwriting Guidelines Homeowners Arizona Edition Date 10/16/2014 General Procedures Policy Period CSE Homeowners policies are written for a term of 12 months. Renewals are continuous and based upon the premiums in effect at the time of renewal. The current editions of the applicable forms and endorsements shall be made a part of the policy. All rates listed in the manual are based on a 12-month policy term. Premium Collections New Business All new business applications must be accompanied by either: Exception Full payment of the 12-month policy premium, or The initial premium payment if the policy is being issued under the installment payment plan (see Installment Payment Plan in this section). If the payment is to be paid by an escrow or mortgage company, the new business application may be sent without payment. The escrow or mortgage company must remit the full 12-month policy premium upon policy issuance. Note: Be sure to indicate in the designated space on the application the name and address of the individual, and the escrow or mortgage company to be billed for the premium, as well as any special billing procedures. Late Payment If payment has not been received by the cancellation effective date, a cancellation notice will be sent to any additional insureds and loss payees or mortgagees indicating that the policy was canceled for non-payment. Non-Pay Cancellation Procedure If premium payment has not been received by the fifteenth (15th) day after the effective date of coverage, a cancellation pending notice will be sent to all concerned parties indicating that if payment is not received within twenty (20) days, the policy will be cancelled effective on that twentieth (20th) day. Format Date 10/23/2014 1

2 If payment is received after the cancellation pending notice has been mailed but before the policy cancels, a $15 late fee will apply. If payment has not been received by the cancellation effective date, then a cancellation notice will be sent to any additional insureds and loss payees or mortgagees indicating that the policy was cancelled for non-payment on that twentieth (20th) day. Renewals All renewals are billed to the appropriate party per the agent s instructions 45 days prior to the renewal date, and the premium payment is due by the renewal date. If premium payment is not received within five (5) days after the due date, a lapse notice is mailed to all concerned parties. If premium payment is not received within twenty (20) days of the due date, a notice of cancellation will be sent to all parties. If payment is received after the lapse notice has been mailed but before the policy cancels, a $15 late fee will apply. Short Payments The CSE Homeowners premium payment plan is a paid- to-date program. This means that when a partial payment is made and no further payments are received, the policy will be canceled as of the date that the coverage purchased by the initial payment ceases. A cancellation pending notice will be issued to all concerned parties 15 days prior to the time coverage ceases. A notice of cancellation will be issued on the date coverage ceases. There is no mid-term billing of any outstanding balance other than the second payment due from the insured paying under the installment plan. If paid-to-date coverage extends into the renewal billing cycle, any balance due will be carried forward and added to the premium due on renewal. If paid-to-date coverage ends before the renewal billing cycle begins, the policy will be canceled unless payment of the amount due is received. Installment Payment Plan CSE offers 2 payment plans for insureds who do not wish to pay the full 12- month premium at one time. The first installment plan enables the insured to Format Date 10/23/2014 2

3 pay in 4 installments. The second payment plan allows the insured to pay in 6 installments. Service Charge If the insured wishes to pay by an installment plan, a $6 service charge will be assessed to each installment. Any time the first payment is less than the full term premium, we will use the installment plan selected by the insured, and the service charge will be added. Payment Allocation Billing For the 4 pay installment plan, the first installment consists of 25% of the full annual premium. The $6 service charge will be added to the first installment and to each remaining installment. The remaining three installments are 25% of the full annual premium. For the 6 pay installment plan, the first installment consists of 16.7% of the full annual premium. The $6 service charge will be added to the first installment and to each remaining installment. The five remaining installments are 16.66% of the full annual premium. For the 4 pay installment plan, we will automatically bill the insured for the second installment, which is due 70 days after the term effective date. The third and fourth installments, which will be due in 90 day intervals after the second installment, will be billed by us 30 days prior to the due date. For the 6 pay installment plan, we will automatically bill the insured for the second installment, which is due 40 days after the term effective date. The remaining installments, which will be due in 60 day intervals after the second installment, will be billed by us 15 days prior to the due date. Late Payment If payment has not been received by the cancellation effective date, a cancellation notice will be sent to any additional insureds, loss payees, or mortgagees indicating that the policy was canceled for non-payment. EFT Payment Plan CSE offers an Electronic Funds Transfer payment plan for insureds who wish to pay their insurance premium in equal monthly payments by having CSE withdraw the funds directly from the insureds checking account. There is no service charge for electronic funds transfer payments. See the Print on Demand forms for the EFT directions & application form. Format Date 10/23/2014 3

4 Returned Checks A $25.00 charge will be applied to a policy when the insured s check is returned to CSE for non-sufficient funds. Rounding of the Premium All premiums for coverage must be rounded to the nearest dime. Preparing Applications Note Failure to comply with the following guidelines may result in the suspension of the agent s binding authority. Legibility, Completeness, Timeliness Blank or unsigned applications must never be left with a prospective insured. CSE requires that all applications be: Effective Date Written legibly (preferably, typewritten or computer-generated) Completed in full (all questions answered) Submitted within 10 days of binding. Applications submitted more than 10 days after binding are subject to cancellation The policy effective date must be the same as or later than the date of the named insured s signature. Post-dated applications, to be effective within 60 days of the policy submission date, are permissible. Back-dated applications are prohibited. Backdating is defined as follows: posting an effective date prior to the time the coverage is applied for, without approval from an underwriter (Coverage is applied for when the named insured, for purposes of binding coverage, signs the application or submits money to the agent.) Insurance Binder CSE agents have authority to issue an insurance binder for a period of 30, 60, or 90 days from the effective date of the policy. Under no circumstances may a binder be issued for longer than a 90-day period. Include the time of binding as Format Date 10/23/2014 4

5 Address well as the expiration date of the insurance binder when completing the application. The applicant must have a definite and permanent address which is clearly stated on the application in the designated area. If the mailing address differs from the property location or is a post office box, the agent must state the reason for the discrepancy, or, in the case of a post office box, indicate the distance from the property to the post office box. Use the remarks section of the application for this information. If the property has no numerical address, clearly specify the location with respect to well-known landmarks or nearby entities which pinpoint locale. Signature and Dates Cancellations Each application must be personally signed and dated by a named insured listed on the application as well as by the issuing agent or a licensed representative acting on behalf of the agent. If the named insured is a minor, the application and attachments must also be signed by a parent or guardian of the minor. New Business CSE reserves the right to cancel a new business application for Underwriting reasons at any time within the initial 60-day underwriting period. General underwriting cancellation reasons include, but are not limited to, the following: Policy does not meeting underwriting criteria Insured does not provide the required or requested underwriting information Material misrepresentation has been made by the insured or agent CSE does not provide the coverage requested Non-weather or catastrophe related loss within the first 60 days of the policy period Condition of the dwelling and surrounding premises Policy premium is not submitted within required time period Format Date 10/23/2014 5

6 Mid-Term If we decline to process the application due to general underwriting unacceptability, we will mail a notice of cancellation to the named insured with a copy to the agent, as required by statute at the last known address. Unearned premium, calculated pro rata, will be returned to the named insured under a the same cover. To request reconsideration of a policy canceled within the initial 60-day underwriting period, the agent must write to the underwriter stating the reasons why the policy should remain in force. If the underwriter agrees to rescind the cancellation, the agent should return the refund check to CSE along with the information requested by the underwriter. Under no circumstances may the agent return a refund check to the company without prior approval from the underwriting department. Company-Initiated We may cancel a policy mid-term for the following reasons: Conviction of the named insured of a crime arising out of acts increasing the hazard insured against Non-payment of premium Acts or omission by the insured or the insured s representative constituting fraud or material misrepresentation in obtaining the policy, continuing the policy, or presenting a claim under the policy Discovery of grossly negligent acts or omissions by the insured substantially increasing any hazards insured against. Substantial change in the risk assumed by the insurer, since the policy was issued, except to the extent that the insurer should reasonably have foreseen the change or contemplated the risk in writing the contract. A determination by the director of insurance that the continuation of the policy would place the insurer in violation of the insurance laws of this state. Failure of the insured to take reasonable steps to eliminate or reduce any conditions in or on the insured premises which contributed to a loss in the past or will increase the probability of future losses. Insured-Initiated The named insured may request the policy to be canceled at any time during the policy period. An ACORD cancellation form should be used to cancel the Format Date 10/23/2014 6

7 Non-Renewal entire policy. The cancellation form must be signed and dated by the named insured or spouse, with the cancellation effective date indicated. Prohibited is retroactive cancellation where the effective date of cancellation is more than 30 days prior to the date of the named insured s signature on the cancellation form. The following cases are exceptions: Duplicate coverage exists under another policy issued by CSE or another insurance carrier, as evidenced by a declaration page from the new insurance carrier. The cancellation is pre-approved by the Underwriting Department The dwelling is sold at an earlier date and the insured provides proof of sale. If insurance is cancelled at the request of the insured, the earned premium shall be computed on a pro-rata basis. If insurance is cancelled at the request of the insured during the first policy term, the earned premium shall be computed on a short-rata basis. Reasons for non-renewal include, but are not limited to, the following: There is underwriting cause The agent no longer represent CSE Non-payment of premium occurs There is a substantial increase in the hazard insured against Condition of dwelling and surrounding area does not meet company requirements Failure of the insured to take reasonable steps to eliminate or reduce any conditions in or on the insured premises which contributed to a loss in the past or will increase the probability of future losses *See Mid-Term Cancellation section for additional reasons. We will notify the agent of our intent to non-renew. This notification will also include our reason(s) for the decision. Format Date 10/23/2014 7

8 Policy Rescission Policy rescission is an underwriting action that renders the entire contract between CSE and the applicant null and void as of the inception date. We rescind a policy when misrepresentation of material fact on the application is so critical that had the correct information been known at the time of the application we would not have bound the coverage. Reinstatement When a policy is canceled for non-payment of premium, the policy may be reinstated without lapse in coverage if the full amount due is received by the effective date of cancellation. A $20.00 reinstatement fee will be charged to the policy. Payments received after the date of cancellation will be referred to the Underwriting Department for approval. We may decline to reinstate a policy if: There is a history of late payments or prior cancellations for non-payment of premium There is a history of NSF (non-sufficient funds) check payments described as: 2 or more NSF checks in the last year, or 3 or more NSF checks in the last 2 years. If the amount paid is less than the amount due when received Policies with any prior loss history Policies currently set to non-renew If the Underwriting Department agrees to reinstate, such reinstatement will be processed without lapse in coverage. If the Underwriting Department declines reinstatement, the unearned premium will be returned to the insured, and the cancellation will stand. If payment is received more than 30 days after the cancellation date, the payment will be returned to the insured. Transfer or Assignment The transfer or assignment of policies is generally prohibited. A transfer or assignment may be approved under the following circumstances: Under Form H004, transfer to another location within the same state or Format Date 10/23/2014 8

9 Eligibility Criteria Form Eligibility Under Forms H003 and H006, assignment from the Named Insured to a relative in the event of transfer to title to the dwelling, or death of the Named Insured. In all circumstances, the request must be submitted to Underwriting for prior approval. (See Non-Bound Submission Procedure in the Eligibility Criteria section of this manual.) Special Form (H003) A Homeowners policy may be issued using Form H003, provided the policy is issued: to the owner-occupant(s) of a 1- or 2-family dwelling which is used exclusively for private residential purposes (except permitted incidental business occupancies) and contains not more than 1 additional family, or, to the purchaser-occupant(s) who have entered into a long-term installment contract (contract of sale) for the purchase of the dwelling and who occupy the dwelling, but to whom title does not pass from the seller until all 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 Endorsement HO41 Additional Insured. Contents Broad Form (H004) A Homeowners policy may be issued using Form H004 provided the policy is issued to: the tenant(s) (non-owners) of a dwelling or an apartment situated in any building or, the owner-occupant of a dwelling, cooperative unit, or building containing an apartment who is not otherwise eligible for a Homeowners policy under the Special Form (H003) provided the residence premises occupied by the insured is used exclusively for private residential purposes (except permitted incidental business occupancies) and is not occupied by more than 1 additional family or more than 2 boarders or roomers. Condominium Unit-Owners Form (H006) A Condominium Unit-Owners policy may be issued using Form H006 provided the policy is issued to the owner-occupants of a condominium unit or the owner of a tenant-occupied condominium unit which is used exclusively for private residential purposes (except permitted incidental business Format Date 10/23/2014 9

10 occupancies). In order for an H006 policy to be issued for a tenant-occupied condominium unit, the HO33 Unit Owners Rental To Others coverage must be endorsed. Other Homeowners Form Eligibility Criteria When a 2-family dwelling is occupied by co-owners, each occupying distinct living quarters with separate entrances, a Homeowners policy providing dwelling coverage may be issued to only 1 of the co-owner occupants of the dwelling. The policy may be endorsed to cover the interest of the other co-owners(s) of the dwelling and for premises liability. A separate Homeowners policy Form H004STO may be issued to the co-owner(s) occupying the other distinct living quarters in the dwelling. The Homeowners policy may be extended, without additional premium charge, to cover the interest of a non-occupant co-owner of the dwelling and to cover premises liability by attaching Endorsement HO41- Additional Insured. Subject to all other sections of this rule, a Homeowners policy may be issued to cover a seasonal dwelling, and such dwelling shall be described as Seasonal Dwelling in the policy, provided the company has the supporting Homeowners policy (refer to the Underwriting Section of this manual). Incidental office, professional, private school, and studio occupancies are permitted provided: > The premises is occupied principally for dwelling purposes; > There is no other business conducted on the premises; > There is no increase in the applicable fire rate for such occupancy; > There is no unusual hazard presented; > There is minimal or no foot traffic from customers of described business. Refer to Optional Coverage, Endorsement HO42, Permitted Incidental Occupancies Residence Premises, or Endorsement HO43, Permitted Incidental Occupancies Other Residences. A Homeowners policy shall not be issued covering any property to which farm forms or rates apply under the rules filed by or on behalf of the company. In no event shall a policy be issued to cover any property situated on premises used for farming purposes, unless farming conducted thereon is only incidental to the occupancy of the premises by the insured as a dwelling, and farming is not the occupation of the Format Date 10/23/

11 insured. Also, the occupants of the dwelling and other structures thereto may not be engaged in the operation of the farm, and said dwellings are in addition to a complete set of farm buildings on the farm and are not exposed within 200' to any farm building. Minimum Limit of Liability Form Section Coverage Limit $ H003 I A 80,000 Metro * 70,000 Non-Metro H004 I C 25,000 H006 I C 25,000 All II E 100,000 All II F 1,000 * Metro areas include the following cities: Phoenix, Gilbert, Chandler, Tempe, Mesa, Scottsdale, Peoria, Glendale, and Tucson Non-metro areas include all other cities not listed above Agent Binding Authority Section I Protection Form Class Coverage Authority H003 1 to 7 A $800,000* H004 1 to 7 C 250,000 H006 1 to 7 C 250,000 *1. CSE can consider risks up to $1,500,000 on a non-binding basis. 2. Le Club and President s Council agents have Coverage A binding authority of $1,000,000 for dwellings in protection class 1 to 7. They can submit risks up to $2,000,000 on a nonbinding basis (CSE can write a limited number of these per year). Section II (All Forms) Coverage Personal Liability Medical Payment to Others Scheduled Personal Property Floater Authority $500,000 per occurrence $5,000 per person See the Inland Marine Scheduled Personal Property section of this manual Ineligible Risks The following classes of homeowner risks are not eligible for coverage. Such risks may not be bound & if submitted will be automatically rejected. Risks not meeting CSE s minimum insurable values. See Minimum Coverage Limits in this section of the manual. Format Date 10/23/

12 Payment history that is classified in Tier 29 of the Financial Stability Factor table per the ChoicePoint report. Risks of sub-standard construction Risks with poor housekeeping and maintenance conditions Risks subject to brush or firestorm hazards including risks within a 1 mile radius of an active wildfire. Risks located in a known flood area Risks located on more than 5 acres of land Risks currently in pre-foreclosure or foreclosure. Risks purchased through distressed financial sales (i.e. pre-foreclosure, foreclosure, REO, short-sale, auction, etc.). These risks may be bound if the agent has either first inspected the property and taken interior/exterior photos showing the dwelling is in good to better condition or the insured has a current 3 rd party, professionally completed, interior/exterior inspection (can include real estate inspections done in conjunction with the home sale). Vacant or unoccupied property Risks with corporation listed as named insured Homes with open foundation Homes not built by a licensed contractor Risks involving prolonged unoccupancy of premises or extensive travel Risks with poor or limited road access. (see Non-designated Brush Areas in this section of the manual) Homes with a wood burning stove or other space heater as the primary heat source Buildings converted to a dwelling occupancy from a non-residential occupancy Unusual liability exposure (e.g. vicious animal, unfenced swimming pool, swimming pools with slides, stairs with no handrail, trampolines, dwellings with lead based paint, etc.). Certain risks may be submitted on a nonbound basis. Dogs with prior bite history. Format Date 10/23/

13 Guard dogs or dog breeds* with a known propensity for viciousness including but not limited to: Akita, Chows, Pit-Bulls (a.k.a. American Staffordshire Terriers), Doberman-Pinschers, Rottweilers, Presa Canarios, Working American Bulldogs, Mastiffs (all types), Mix of the breeds listed above Non-domesticated animals which have a known propensity for viciousness or the ability to cause severe bodily injury. The following list is intended to be used as a guide and is not an exhaustive list: Large cats (lions, tigers, ocelots, etc), Wolf-hybrid dog breeds, Bears, Snakes (Boa Constrictors, Pythons, Rattlesnakes, Coral, etc.) Dwellings on a slope of 35 degrees or more Dwellings built on piers or posts Dwellings located in Protection Classes 8 through 10 (see Suburban Rating Rule for exceptions) Mobilehomes Manufactured homes that are not on a permanent foundation and do not have wood frame construction. Risks where the amount of insurance requested is less than 100% of the full replacement cost of the dwelling, or personal property if H004 or H006. Applicants that have had any of the following losses in the past three years: any liability or theft/vandalism loss, any water loss, any loss over $5000, two (2) or more losses Risks canceled or non-renewed by CSE or any other company for reasons listed in CSE s Ineligible Criteria. Payment history with CSE or payment history from reports showing a history of late pays, collections, bankruptcy, bad debts, liens, or judgments are ineligible. Credit reports are ordered on all new business. Dwellings whose architectural style is highly ornate (e.g. Victorian or Edwardian style). Dwellings with tar and gravel or flat roofs older than 20 years. Dwellings with composition/asphalt shingle roofs older than 30 years. The roof must not show visible signs of wear or deterioration. Dwellings with wood shake roofs. Format Date 10/23/

14 Dwellings with windows covered by non-releasable security bars in living areas. Risks where prior damage exists. Risks under course of construction. Risks undergoing renovation or reconstruction. Seasonal or Secondary dwellings, unless the owners primary residence is insured with CSE or written in conjunction with the secondary or seasonal dwelling. Risks purchased for real estate speculation. Dwellings which are architecturally unique (e.g., geodesic, log homes, earth homes). Absentee landlords (property owners who reside over 100 miles from the owned residence requesting to be insured). Dwellings must be a minimum of 800 square feet of living area. Dwellings that have not had plumbing, heating and electrical updates within the last 30 years. If the home s electrical system is on circuit breakers and plumbing system is made of copper; no updates will be required for these two items. Galvanized plumbing unless it is 40 years of age or less and the policy deductible is at least $1,000. Homes with an electrical system that contains any knob and tube, aluminum wiring, or any fuses. A dwelling that is unsupported by a primary homeowner s policy unless the following minimum requirements are met: > The home must have a minimum of 800 square feet. > Minimum Coverage A is $120,000 non-metro and $150,000 metro. > Must be loss free for the past 3 years. > Any course of construction risk must have the primary homeowner s insured by CSE. > Must meet all other regular underwriting guidelines. Individuals with the following occupations: Format Date 10/23/

15 > Reporters, authors, editors, or publishers of newspapers or magazines > Broadcasters, television and/or radio personalities > Professional actors, athletes, entertainers, or celebrities > Persons who have been elected to their occupations or full-time positions > Candidates for an elected office Form H004 and Form H006 Ineligible H004ST0 Contents Broad Form risks which have no evidence of previous insurance for personal property in the prior twelve (12) months, unless there is supporting business (Auto or Life) with the Company. Risks which have additional occupants in the household who are not eligible to be Named Insured Risks which have a concentration of value in one or two objects (stereo equipment, fine arts, etc.) Risks where coverage is to be written in the names of individuals who do not have an insurable interest in the property. Risks where the named insured is the owner- occupant of the residence unless the building contains more than two (2) residential units not insured with CSE under a Fire Policy. Risks where the amount of Coverage C Personal Property is less than 100% of the actual cash value of all unscheduled personal property. Non-Bound Risks (submit for approval) Any home with 3 or more mortgages Any home with roomers or boarders Primary residences located outside of producer s marketing area or outside of Arizona Dwellings exceeding building authority limits Format Date 10/23/

16 Non-Bound Submission Procedure An agent may not bind an applicant who does not qualify for coverage under the underwriting guidelines of this manual. Underwriting will review a nonbound application submitted by an agent if the following conditions are met: 1. Agent does not accept premium; 2. Agent indicates Non-Bound on the application; 3. Applicant and agent do not sign and date the application; 4. Application does not show effective dates but is otherwise completed in full; 5. Agent includes with the application a detailed description of the circumstances surrounding the non-bound submission and includes in that description comments regarding the applicant. If Underwriting approves the application for binding Underwriting will return the original application to the agent requesting the premium and an effective date. To assure prompt handling, the agent should forward the application, premium, and Underwriting memo of acceptance through the normal new business submittal process. We will not provide coverage prior to the date that we actually receive the premium. Policy Attachments and Inspection Requirements H003 Policy All H003 risks must be inspected by the agent prior to binding coverage. The following are items which must be inspected and forwarded by the agent: 1. The condition of the wiring, plumbing, heating, and roof 2. Any existing structure damage (all damage must be reported) 3. Replacement value of the dwelling The following items need to be included with each application submitted to CSE: 1. Marshall and Swift Replacement Cost Estimator (current version) 2. Supplemental wood stove questionnaire and photo of wood stove (if applicable) 3. Dog Questionnaire (if applicable) Format Date 10/23/

17 H004 Policy All H004 personal property risks must be inspected by the agent prior to binding coverage. The following are items which must be inspected and forwarded by the agent: 1. The condition of the wiring, plumbing, heating, and roof 2. Any existing structure damage (all damage must be reported) The following items need to be included with each application submitted to CSE: H006 Policy 1. Prior insurance carrier s policy number and/ or current declarations page or current CSE policy number 2. Existing CSE Auto Policy number All H006 property risks including personal property must be inspected by the agent prior to binding coverage. The following are items which must be inspected or forwarded by the agent: 1. The condition of the wiring, plumbing, heating, and roof 2. Any existing structure damage (all damage must be reported) Underwriting Guidelines Introduction The Homeowners Policy program provides property and liability coverages using the forms and endorsements specified in this manual, which contains the rules, classifications, and premiums which govern the writing of Homeowners policies. The rules, rates, forms, and endorsements filed by or on behalf of the company for each coverage shall apply in all cases not specifically provided herein. Occupation Definition Each application must identify the occupation of the Named Insured. Civil Servant Definition A government employee is any person who is principally employed on a permanent, full time basis by a government unit in the public service or has retired from such employment. A government unit is any entity which directly Format Date 10/23/

18 Eligibility or indirectly receives its authority from the constitution, state, county, or local law, or by custom is associated with these units. This includes those on active military duty, elected officials, and those who are employed by or retired from such units, or the surviving spouse of a government employee. Government Entity The Named Insured must have as a principal occupation a position with one of the following entities or must be a relative from such an entity: Federal Government > Civilian: Executive, Judicial, Legislative > Military: Active duty Officer, Non-Com E-5 through E-9 Federal Independent Agencies: Post Office State Government > Civilian: Executive, Judicial, Legislative > National Guard: State employee full time, Officer, Non-Com, Lower Ranks County Government Municipal Government Local District Government Extent of Full Time Full time means working at least 30 hours per week on a permanent basis. Status of Employment Current Regular Employment Retired (including surviving spouse) NOTE: If qualifying named insured or spouse of named insured is retired, the last position held prior to retirement must have been as a full-time employee of a government unit, as defined above. Format Date 10/23/

19 Forms Offered Special Form (H003) Contents Broad Form (H004) Condominium Unit-Owners Form (H006) For eligibility guidelines refer to the Eligibility Criteria section of this manual. For coverage definitions, conditions, and exclusions refer to the specific contract for each policy form. (This manual does not contain contract language.) Special Form (H003) Section I Property Damage Coverage A Dwelling Coverage B Other Structures Coverage C Personal Property Coverage D Loss of Use Section II Liability Coverage E Personal Liability Coverage F Medical Payments to Others Contents Broad Form (H004) Section I Property Damage Coverage C Personal Property Coverage D Loss of Use Section II Liability Coverage E Personal Liability Coverage F Medical Payments to Others Condominium Unit-Owners Form (H006) Section I Property Damage Coverage A Dwelling Coverage C Personal Property Coverage D Loss of Use Section II Liability Coverage E Personal Liability Coverage F Medical Payments to Others Format Date 10/23/

20 Deductibles Basic Deductible, All Forms The Homeowners policy applies a basic loss deductible clause of $250 to any loss under Section I of the policy, except that no deductible applies to Coverage D Loss of Use or Additional Coverage, Fire Department Service Charge and Credit Card, Fund Transfer Card, Forgery, and Counterfeit Money Coverages. Note: The $100 deductible is still available with a surcharge for HO3 and HO6 policies. Optional Deductible, All Forms Construction CSE offers the following optional deductibles: $100 (HO3 and HO6 only), $500, $1000, $2500, and $5000 Construction Classifications Frame Masonry Masonry Veneer Mixed Construction A dwelling with exterior walls of combustible construction, including walls with metal, stucco, or metal lath and plaster, on combustible supports A dwelling with exterior walls of brick, concrete, concrete block, adobe, tile, other masonry materials or non-combustible materials, on non-combustible supports A dwelling with walls of combustible construction veneered with masonry materials. Dwellings of masonry veneer construction and their contents and apartment contents are eligible for masonry premiums A dwelling is to be classified as masonry where the wall areas of masonry construction exceed 33 1/3% of the total exterior wall area. Construction Eligibility A dwelling is eligible if it meets the following qualifications: Has minimum of 800 sq. ft. of living area Built by a licensed contractor Permanently attached to a continuous foundation Has basic construction of frame, brick, concrete, or concrete block Has roof of composition shingle, rock, tile, slate or composition roll (semiflat roof only) Has siding of wood, composition, stucco, brick veneer, vinyl, asbestos, steel, or aluminum Format Date 10/23/

21 Brush Exposure Designated Brush Areas (and Possible Brush Areas) Any property located in a designated brush area or possible brush area (nondesignated) by visual inspection is ineligible unless the requirements below are met. A non-bound application may be submitted for consideration if there is or are: Brush clearance of 1,000' from all sides of the dwelling Tile roof on insured home and neighboring homes Dual access road (fire department will not enter a dead-end street or culde-sac where the fire can come in behind personnel and trap the equipment) 4 photos showing that surrounding area has been cleared of native growth Diagram of dwelling position in relation to the street No brush downhill from the dwelling Photocopy of page on map with dwelling pinpointed No risks with wood shake roofs whether treated or not Agent inspection of the risk Suburban Rating Rule Use for all risks rated from the personal lines manual. The location of the property must be inside the city limits or the described area furnishing the fire protection to qualify for the class listed for the city or area. Use the indicated class for properties inside the city limits or the described area furnishing the fire protection. Suburban Rating Rule: Dwellings not part of a complex and not located in areas listed will fall under Protection Class 6, provided all the following requirements are met: The dwelling is located within 5 miles travel distance from a full time, paid fire department that will respond. A State Department of Forestry fire station is not considered a recognized fire department unless it has contracted to provide residential protection for the area in which the dwelling is located. The dwelling is located within 1,000' of a public fire hydrant with 2 1/2" hose outlets connected to a 4" or larger main. Format Date 10/23/

22 The dwelling is not located in a severe brush or forest conflagration area. The dwelling will be as classified under Protection Class 8 if either one of 1. or 2. above together with 3. are met. The dwelling will be classified under Protection Class 9 if 1. and 2. above are not met, but 3. is satisfied. For towns or Areas not listed which are located in a brush or forest conflagration area, use Protection Class 10. NOTE: Protection Class 8-10 are unacceptable Wood Burning Stoves The following rules govern the binding of risks that contain wood burning stoves or other secondary heat sources. Mandatory attachments: photo of risk, photo of wood burning stove, and completed wood burning stove supplement. The wood burning stove must be installed by a contractor or other professional and must be approved by the fire department or building inspector. The wood burning stove must not be the only heat source in the home. The primary heat source should be central heating. The wood burning stove must be safety checked and cleaned annually. The home must be located in Protection Class 7 or lower. Special Form (H003) Definition 1 or 2-Family Residence May be written only for the owner-occupant of a 1- or 2-family residence, which means that not more than 1 additional family may occupy the building. An owner-occupant of a townhouse or row house is also eligible regardless of the number of units in the building. Townhouses and Row Houses Ownership consists of a separate interest in an individual dwelling unit, together with the land on which the unit is situated. A townhouse unit may be a single structure or 1 unit of a multi- unit structure. Note: Townhouse contents only may be written under the Condominium Owners Package, provided the dwelling building is covered under the association s property insurance. Townhouse dwelling (single structure or 1 unit of a multi- unit structure) may qualify for the Special Form. Format Date 10/23/

23 Mandatory Coverages It is mandatory that insurance be written for all coverages provided under both Sections I and II of the Homeowners policy. Section II of the Homeowners policy requires coverage for the following exposures and an additional premium must be charged when such exposures exist: All additional premises where the named insured or spouse maintains a residence other than business or farm properties Permitted incidental office, professional, private school, or studio occupancies used by the insured on residential premises of the Named Insured Section II of the Homeowners policy for Secondary Dwellings may be deleted. A premium credit will be given. However, the company must provide coverage for the primary Homeowners policy and extend coverage from the primary to the secondary. Optional Coverages Refer to the Endorsement Section of this manual for optional coverages pertaining to the Special Form H003 policy form. Replacement Cost Replacement Cost Statement CSE requires that all dwellings be insured at 100% of replacement cost, for the purpose of providing adequate protection against a total loss of property. We require the current Marshall & Swift replacement cost estimator calculation to establish accurate replacement cost coverage. Marshall & Swift RCT Express Introduction The Marshall & Swift program is designed to extend the estimating capability of the more traditional square foot method so that users may quickly and easily determine up-to-date replacement cost values for a wide range of homes, including those which are: Mainstream and upscale More lavish in their appointments and additional features, and Of high quality Format Date 10/23/

24 Inflation Factors CSE includes inflation factors in the calculation for each policy renewal period to adjust the replacement value of homes for varying costs in the construction industry. Note The Marshall & Swift program is available on the cseagents.com website and within SPInn. Homegard Endorsement (F.30850B) The Homegard endorsement will be included on all H003 policies if the following eligibility criteria are met: 1. Primary residence (seasonal and secondary dwellings do not qualify) 2. Year of construction 1960 and after. Homes built prior to 1960 may be considered for the Homegard rating if the dwelling has been completely rebuilt from the studs up since Proof of reconstruction is required. And risks must have: For New Business: no losses during the last 3 years For Renewals: A policy s loss history will be evaluated by a CSE Underwriter after a loss has occurred. In general, CSE will not remove the F.30850B endorsement unless: > the policy has more than ONE paid loss during the last 3 years, or > the loss occurred because of a lack of maintenance by the insured or the loss indicates poor condition of the dwelling, or > the loss is a non-weather or non-catastrophe-related loss, or > the policy has been insured with CSE for the following amount of time and the loss exceeds the following dollar amount: Consecutive Policy Renewals with CSE Loss Amounts 0-2 Renewals $0 3-5 Renewals up to $1, Renewals up to $2, Renewals up to $3, Renewals up to $4, Renewals up to $5,000 Format Date 10/23/

25 For rating information, please see the Homegard endorsement (F.30850B) in the Endorsement section of this manual. Policies with 2 or more losses within the last 3 years, regardless of loss type or amount, are ineligible for the F.30850B endorsement. If not non-renewed, the policy will have the F.30850B endorsement removed upon renewal. If CSE removes the F.30850B endorsement, comparable coverage will be added with the F.32760A Amendatory Endorsement. Replacement Cost Contents Endorsement (H500) (Forms H004 and H006 only) In addition to our eligibility guidelines, any applicant requesting replacement cost on unscheduled personal property (Endorsement HO-500) must meet the following requirements: Coverage must be maintained at 100% replacement cost of personal property contents. Any request to reduce Contents Coverage limits must be accompanied by an updated inventory of personal property completed by the named insured. Financial Stability Factor Table Tier Factor Format Date 10/23/

26 Tier Factor Not eligible No Score 0.00 No-Hit Refer to Underwriting Policy Discounts Multi-Policy Discount The multi-policy discount is provided when there is an in-force supporting automobile policy written in the name of the insured listed on the homeowners policy. A 10% multi-policy discount is credited to the homeowner (HO3, HO4 or HO6) policy. Age of Home Discount % Credit Construction Age CSEICO to to to Note: Age of home discount only affects HO3 policies. Home Inspection Discount A 10% discount may be given when the applicant provides satisfactory proof of a home inspection that occurred in connection with the property location that is Format Date 10/23/

27 being insured through the Company. Proof of home inspection must satisfy some basic requirements*. The inspection must be dated within 90 days of the policy inception or renewal date, and the discount will be applied for one policy term only. Proof of the inspection is not required if a home is in escrow. This discount applies to HO3 and HO6 policies only. * Requirements A Home inspection is a physical examination performed for a fee in connection with a transfer of a one to four unit residential dwelling designed to identify material defects in those systems, structures and components. The inspection includes the mechanical, electrical, and plumbing systems and the structural and essential components. A Home inspection may also include an inspection of energy efficiency. A material defect is a condition that significantly affects the value, desirability, habitability, or safety of the dwelling. A home inspection report is a written report prepared for a fee and issued after a home inspection. The report clearly describes and identifies the inspected systems, structures, or components of the dwelling, any material defects identified, and any recommendations regarding the conditions observed or recommendations for evaluation by appropriate persons. A home inspector is any individual who performs a home inspection and is licensed as a general contractor, architect, or registered as a professional engineer. A Transfer is a transfer by sale, exchange, lease with an option to purchase, any other option to purchase, of real property consisting of not less than one nor more than four dwelling units. A home inspector may not do any of the following: 1. Perform or offer to perform, for an additional fee, any repairs to a structure on which the inspector, or the inspector's company, has prepared a home inspection report in the past 12 months. 2. Inspect for a fee any property in which the inspector, or the inspector's company, has any financial interest or any interest in the transfer of the property. 3. Offer or deliver any compensation, inducement, or reward to the owner of the inspected property, or for the referral of any business to the inspector or the inspection company. Format Date 10/23/

28 Premises Alarm or Fire Protection System H216S0 The following credits apply to the basic policy premium derived from the rate pages. Total credit shall not exceed 14%. In order to receive the appropriate credit for a central station alarm system, an alarm certificate must be provided. Protective Device Premium Credit Device Credit % Central station burglary alarm system 7 Central station fire alarm system 7 Burglary alarm system that alerts the police department 6 Fire alarm system that alerts the fire department 6 Local burglary and/or fire alarm system (smoke detector) 5 Neighborhood Crime Watch Discount H525ST0 (Forms H003ST0 and H006ST0 Only) For a premium credit, the residence premises must be located within the boundaries of a neighborhood crime watch area and the insured must be an active, participating member of that neighborhood crime watch area. The premium credit shall be $10. Senior Discount H590ST0 (Forms HO3STO and HO6STO Only) For a premium credit, one of the named insureds must be at least 60 years old and the residence premises must be the insured s principal residence. The premium credit shall be 15%. Professional Occupation Discount A 15% policy discount applies to insureds who are firefighters*. A 10% policy discount applies to insureds with the following occupations: Law Enforcement Officers Teachers Professors A 5% discount applies to insureds with the occupations listed below: Accountants Actuaries Pharmacists Scientists Format Date 10/23/

29 Engineers Farmers Clergy Physical Therapists Only one occupation may be used to qualify for the policy discount. Insureds who have retired from the above occupations also qualify for this discount. * Firefighters must be government firefighters. Law Enforcement Officers consist of police officers, sheriffs, FBI agents, Secret Service agents, officers of the Department of Homeland Security, prison guard and Border Patrol Enforcement personnel and other comparable positions whose duties are primarily the prevention, investigation, apprehension or detention of individuals suspected or convicted of offenses against the criminal laws, including an employee engaged in this activity who is transferred to a supervisory or administrative position; or serving as a probation or pretrial services officer. Endorsements Index of Endorsements Miscellaneous Newer Home Premium Credit (Form H003 only) The following credits are given for homes constructed within the past seven years. Apply the proper credit to the $250 deductible base premium. Year of Construction % Credit Current calendar year year preceding current calendar year years preceding current calendar year years preceding current calendar year years preceding current calendar year years preceding current calendar year years preceding current calendar year years preceding current calendar year years preceding current calendar year years preceding current calendar year years preceding current calendar year years preceding current calendar year years preceding current calendar year years preceding current calendar year years preceding current calendar year years preceding current calendar year +10 Format Date 10/23/

30 Endorsement F.31075B Special Provisions, Arizona Rating Protection Classes 9 and 10 For existing CSE business located in Protection Class 9 or 10. Convert the basic premium for a risk in Protection Class 9 or 10 by multiplying the $100 deductible premium by the appropriate factor below. Protection Class Conversion Factor H003 H004 or H Coverage C Personal Property, Increased Limits The basic limit of liability for Coverage C may be increased to a maximum of 100% of Coverage A. The additional premium for each additional $1,000 of insurance shall be $1.70. Explain the reason for the increase in the remarks section of the application. Coverage C Personal Property, Reduction in Limits The return premium for each $1,000 of insurance shall be $1.00. Coverage D Loss of Use, Increased Limits The additional premium for each additional $1,000 of insurance shall be $1.00. Explain the reason for the increase in the remarks section of the application. Equipment Breakdown Enhancement Charge $27 to add Equipment Breakdown Enhancement coverage. Homeowners Endorsements HO32ST0 Unit Owners, Special Coverage (Form H006ST0 Only) HO33ST0 Unit Owners Rental to Other (Form H006ST0 Only) HO35ST0 Loss Assessment Coverage HO37ST0 Loss Assessment Coverage: 10% deductible on Earthquake HO40ST0 Structures Rented to Others, Residence Premises HO41ST0 Additional Insured, Residence Premises HO42ST0 Permitted Incidental Occupancies, Residence Premises HO43ST0 Permitted Incidental Business Occupancy, Other Residence HO48ST0 Other Structures, Increased Limits HO50ST0 Increased Limit on Personal Property in Other Residence HO51ST0 Building Additions and Alterations, Increased Limits (Form H004ST0 Only) HO52ST0 Continuous Renewal Plan Format Date 10/23/

31 HO53ST0 Credit Card, Fund Transfer Card, Forgery, and Counterfeit Money Coverage HO56ST0 Earthquake and Volcanic Eruption HO61ST0 Personal Property, Additional Coverage HO65ST0 Increased Special Limits of Liability HO70ST0 Additional Residence Rented to Others This endorsement will no longer be added on new business midterm or at renewal. HO71ST0 Business Pursuits HO72ST0 Incidental Farming Personal Liability (Form H003ST0 Only) HO74ST0 3- or 4-Family Dwelling Premises Liability (Form H004ST0 Only) HO75ST0 Watercraft Liability HO80ST0 Residence Rental Theft (Form H003ST0 Only) HO82ST0 Personal Injury (Forms H004 and H006 Only) H164ST0 Snowmobile H216ST0 Premises Alarm or Fire Protection System H308ST0 Landlord s Furnishings (Form H003ST0 Only) H312ST0 Increased Limits on Business Property H313ST0 Incidental Motorized Land Conveyances H314ST0 Special Computer Coverage H372ST0 Mortgagee Clause H438ST0 Lender s Loss Payable Clause H500ST0 Replacement Cost on Contents (Forms H004 and H006 only) H525ST0 Neighborhood Crime Watch (Forms H003ST0 and H006ST0 Only) H590ST0 Senior Discount (Forms H003ST0 and H006ST0 Only) F.30420G (05/03) Endorsements booklet F.30440C Policy booklet (H006) F.30455D Policy booklet (H004) F.30480E Policy booklet (H003) F.30850B HOMEGARD F.30915A Sections I and II Exclusions for Computer-Related Damage or Injury F.31025C Homeowner Deluxe Endorsement F.31075B Special Provisions (all forms) F.31550A Pathogenic Organisms Exclusion F.32465A Identity Recovery Coverage F.32760A Amendatory Endorsement F Equipment Breakdown Enhancement (H003) F Equipment Breakdown Enhancement (H004) F Equipment Breakdown Enhancement (H006) F.33980A Additional Interests Residence Premises Initial Residence Coverage E, Increased Limits Initial Residence Coverage F, Increased Limits Increased Limits Additional Residence Occupied by Insured (1- or 2-Family), Coverage E Increased Limits Additional Residence Occupied by Insured (1- or 2-Family), Coverage F Multiple Policy Discount Format Date 10/23/

32 Homeowners Endorsements (All Forms) NOTE Please refer to the Index of Endorsements section of this manual for endorsement titles which relate to endorsement numbers. Property Endorsements (H032 to H065) H032 H032ST0 Unit Owners, Special Coverage (Form H006ST0 Only) When the policy is extended beyond the automatic 10% of Coverage C (provided by the policy) to insure for risk of direct physical loss to property, the additional premium shall be $2 for the Basic Limit of Liability (10% of Coverage C) plus, for the Increased Limit of Liability, $1 per $1,000 of insurance above the Basic Limit of Liability to be added to the applicable premium for each additional $1,000 as shown on the rate pages for Form H006ST0. Agent s Coverage A binding authority is $300,000 (includes the automatic 10% of Coverage C). H033 H033ST0 Unit Owners Rental to Other (Form H006ST0 Only) For an additional premium, coverage is provided while the residence premises is regularly rented or held for rental to others. The additional premium shall be 25% of the basic premium (including any credit for higher optional deductibles). H035 H035ST0 Loss Assessment Coverage For an additional premium, the Special Limit of Liability of $1,000 for Loss Assessment Coverage provided in Sections I and II Additional Coverages may be increased as follows: Amount of Coverage Forms H003ST0 or H006ST0 with H032ST0 All Other Forms $5,000 $4 $3 $10, Each additional $5,000 (up to $50,000) 2 1 Format Date 10/23/

33 H037 H037ST0 Loss Assessment Coverage: 10% deductible on Earthquake For an additional premium, coverage is provided for the insured s share of any loss assessed by a corporation or association of property owners as a result of a direct physical loss to the property, owned by all members collectively, caused by Earthquake or Volcanic Eruption. The additional premium per $1,000 of insurance shall be: Construction Type EQ Zone 4 5 Frame $2.40 $1.70 Masonry Refer to Company Refer to Company Refer to Company for rates on other constructions. See Endorsement H056ST0 for EQ Zone Definitions. H040 H040ST0 Structures Rented to Others, Residence Premises For an additional premium, coverage is provided for structures on the residence premises rented or held for rental to any person not a tenant of the dwelling for use as a private residence. Liability coverage is also provided. The additional premium shall be $4.25 for each $1,000 of insurance plus the premium for Coverage E Personal Liability and Coverage F Medical Payments to Others for H070ST0 Additional Residence, Rented to Others. H041 H041ST0 Additional Insured: Residence Premises This endorsement extends the policy to include any person or organization who has an interest in the named insured s property with respect to Coverages A, B, E, and F. There is no additional premium for this endorsement. H042 H042ST0 Permitted Incidental Occupancies, Residence Premises For an additional premium, coverage is extended under Section I Coverage C, Property Coverages for the equipment, supplies, and furnishing usual and occupancy incidental to the business conducted by the insured on the residence Format Date 10/23/

34 premises in the dwelling or in a separate structure on the premises. Liability coverage is also provided. If the business is located in another structure, Coverage B does not apply to that structure. When the building is insured under the Homeowners Special Form and the building has been physically altered for the occupancy, the limit of liability for Coverage C Personal Property must be increased to not less than 60% of the Coverage A Dwelling limit of liability. Provide the Company 1. the nature of the business conducted 2. the amount of space dedicated to the business 3. the frequency of client visits to the premises 4. the estimated quantity of inventory on premises 5. confirmation of the presence of any exterior sign. Coverage E Additional Premium Limit Premium $100,000 $19 200, , , , Coverage F Additional Premium Limit Premium $2,000 $5 3, , , H043 H043ST0 Permitted Incidental Business Occupancy, Other Residence Coverage E Additional Premium Limit Premium $100,000 $18 200, , , , Format Date 10/23/

35 Coverage F Additional Premium Limit Premium $2,000 $ 3 3, , , H048 H048ST0 Other Structures, Increased Limits The additional premium per $1,000 of insurance shall be $2.00. H050 H050ST0 Increased Limit on Personal Property in Other Residence For an additional premium the basic limit of liability that applies to personal property usually situated at an insured s residence, other than the residence premises, 10% of Coverage C Personal Property, may be increased. The additional premium shall be $7 per $1,000 of additional insurance. H051 H051ST0 Building Additions and Alterations, Increased Limits (Form H004ST0 Only) For an additional premium, the limit of liability for Building Additions and Alterations, 10% of Coverage C Personal Property, may be increased. The premium for each $1,000 of additional insurance shall be the rate per $1,000 shown on the Homeowners Contents rate pages for the protection class in which the premises is rated. H052 H052ST0 Continuous Renewal Plan This endorsement provides continuous coverage until the policy is cancelled in writing by the Company or the insured fails to pay the premium. H053 H053ST0 Credit Card, Fund Transfer Card, Forgery, and Counterfeit Money Coverage The limit of liability of $1,000 may be increased. Additional Premium Limit Premium $ 2,500 $2 Format Date 10/23/

36 Additional Premium 5, , ,000 5 H056 H056ST0 Earthquake and Volcanic Eruption The premium for each $1,000 of insurance shall be: Form EQ Zone 4 2 Construction 1 Frame All Other EQ EQ Zone 5 3 Zone 4 2 EQ Zone 5 3 Apply Rate to H Coverage A H04 and H Coverage C H03 Coverage C Increased Limits All Forms Coverage B or D Increased or Added Limits Rate masonry veneer as All Other. 2 EQ Zone 4: Cochise, Pima, Santa Cruz, and Yuma Counties 3 EQ Zone 5: Remainder of State Amount of increase only Amount of increase or added H061 H061ST0 Personal Property, Additional Coverage Refer to the Inland Marine Manual for premium on Scheduled Personal Property. H065 H065ST0 Increased Special Limits of Liability Jewelry, Watches, and Furs (Forms H004 and H006 only) The special limit of $1,000 for theft of jewelry, watches, and furs for any policy other than HOMEGARD may be increased to a maximum of $10,000 but not exceeding $2,500 for any one article. The additional premium per $1,000 of coverage shall be $ Money and Securities (Forms H004 and H006 only) The special limit of liability of $200 on money may be increased to a maximum of $1,000. The additional premium shall be $6 per each $100 of additional insurance. Format Date 10/23/

37 The special limit of liability of $1,000 on securities may be increased to a maximum of $5,000. The additional premium shall be $4 per $100 of additional insurance. Silverware, Goldware, and Pewterware (Forms H004 and H006 only) The special limit of liability of $2,500 for loss by theft of silverware, goldware, and pewterware may be increased to a maximum of $10,000 in increments of $500. The additional premium shall be $3.25 for each $500 of increased insurance Firearms The special limit of liability of $2,000 for loss by theft of firearms may be increased to a maximum of $6,000 in increments of $100. The additional premium shall be $3 for each $100 of increased insurance. Property Endorsements (H070 to H525) H070 H070ST0 Additional Residence Rented to Others The maximum number of additional residences that can be named in this endorsement is four. Additional Coverage E Premium per Additional Residence Limit Premium 1-Unit 2-Unit 3-Unit $100,000 $8 $10 $25 200, , , , Additional Coverage F Premium per Additional Residence Limit Premium 1-Unit 2-Unit 3-Unit $2,000 $1 $1 $1 3, , , H071 H071ST0 Business Pursuits For an additional premium, under Coverage E Personal Liability and Coverage F Medical Payments to Others, coverage may be extended for liability of an Format Date 10/23/

38 insured arising out of business activities, other than those related to a business which the insured is a sole owner or partner. Apply a separate charge for each person insured. To determine the amount of the charge, first classify the insured person according to the list of classifications below, then find the corresponding additional premium in the table immediately following the list of classifications. Refer to the Company occupations not otherwise classified. Premium Code A B C D E F Classification description Clerical office employee whose duties are confined to keeping books or records or conducting correspondence, or who is engaged wholly in office work where such books or records are kept or where such correspondence is conducted, having no other duty of any nature in or about the employer s premises. This classification applies only to a person employed exclusively in a separate building, or on a separate floor of the same building, or in a department on such floor separate from any other workplace of the employer by a structural partition and within which no work is performed other than clerical office duties. Salesperson, collector, or messenger including installation, demonstration, or servicing operations. Athletic, laboratory, manual training, physical training, and swimming instruction teacher, excluding liability for corporal punishment of pupils. Teacher not otherwise classified, excluding liability for corporal punishment of pupils. Liability for corporal punishment of pupils for teacher listed under Classification C above. Liability for corporal punishment of pupils for teacher listed under Classification D above. Additional Premium Coverage E Limit $ Premium $ A B C D E F 100, , , , , Additional Premium Coverage F Limit $ Premium $ A B C D E F 2, , , , H072 H072ST0 Incidental Farming Personal Liability (Form H003ST0 Only) Format Date 10/23/

39 For an additional premium, under Coverage E Personal Liability and Coverage F Medical Payments to Others, coverage may be extended to provide liability of the insured arising out of incidental farming operations that are conducted on the residence premises. But coverage may not be extended under this endorsement to any farm whose principal purpose is to supply commodities for manufacturing or processing by the insured for sale to others, such as to a creamery or dairy (but not to a dairy farm), any farm that operates a freezing or dehydrating plant, and any poultry factory. The word processing does not apply to the slaughtering and dressing of livestock or to such operations as bunching vegetables or crating berries. Nor may coverage be extended under this endorsement to (1) any farm whose principal purpose is to raise and use racehorses (2) any incorporated farm (3) any farm that produces more than $2,000 in annual receipts (4) any farm with five or more animals (including horses), or (5) any farm located on more than five acres of land. Additional Coverage E Premium Limit Premium $100,000 $40 200, , , , Additional Coverage F Premium Limit Premium $2,000 $1 3, , ,000 4 H074 H074ST0 Three- or Four-Family Dwelling Premises Liability (Form H004ST0 Only) For an additional premium under Coverage E Personal Liability and Coverage F Medical Payments to Others, that part of the premises shown in the declarations, other than the residence premises, is included in the definition of insured location. Additional Coverage E Premium Limit Premium $100,000 $25 200, , , , Format Date 10/23/

40 Additional Coverage F Premium Limit Premium $2,000 $1 3, , ,000 4 H075 H075ST0 Watercraft Liability For an additional premium, coverage E Personal Liability and Coverage F Medical Payments to Others, apply to bodily injury and property damage arising out of ownership, maintenance, use, and loading and unloading of a watercraft. Coverage must be written to the expiration of the policy. No credit is allowed for limited navigational periods. The premium applicable in the state in which the insured s initial residence premises is located shall apply, except that if the insured owns another premises where he or she maintains a residence and operates his or her boat principally from such other premises, the premium applicable in the state where the latter premises are located shall apply provided the Company is licensed in the state. Coverage on outboard motors of 25 horsepower or less and sailboats of 25 feet or less with or without auxiliary power is automatically provided in the Homeowners Policy. Provide the Company with each operator s driver s license number and the boat s make, model, length, horsepower, and motor type (inboard, outboard, jet, inboard/outboard). To determine the charge, first identify the premium code in the Premium Codes table below. (For a single watercraft with two or more motors that are regularly used together, use the combined horsepower of the motors. Refer to the Company any motorboat 15' or under with HP.) Then find the amount of additional premium that corresponds to the premium code in the appropriate Additional Premium table. Type Horsepower Length in feet Premium Code Motorboat Up to 50 Up to 15 A Motorboat Up to B Motorboat Up to 15 C Motorboat D Motorboat Up to 15 E Motorboat F Motorboat G Sailboat With or without auxiliary power H Format Date 10/23/

41 Coverage E Additional Premium Limit $ Premium $ A B C D E F G H 100, , , , , Coverage F Additional Premium Limit $ Premium $ A B C D E F G H 2, , , , H080 H080ST0 Residence Rental Theft (Form H003ST0 Only) The additional premium shall be $15. H082 H082ST0 Personal Injury (Forms H004 and H006 only) For an additional premium under Coverage E Personal Liability, the definition of Bodily Injury is amended to include personal injury, meaning injury arising out of false arrest, libel, slander, or invasion of privacy. Additional Premium Limit Premium $100,000 $18 200, , , , H164 H164ST0 Snowmobile For an additional premium Coverage E Personal Liability and Coverage F Medical Payments to Others apply to bodily injury or property damage arising out of the ownership, maintenance, use, or the entrustment by an insured of a snowmobile to any person who uses the snowmobile off an insured location. Format Date 10/23/

42 Additional Coverage E Premium Limit Premium $100,000 $46 200, , , , Additional Coverage F Premium Limit Premium $2,000 $1 3, , ,000 4 H216 H216ST0 Premises Alarm or Fire Protection System The following credits apply to the basic policy premium derived from the rate pages. Total credit shall not exceed 14%. In order to receive the appropriate credit for a central station alarm system, an alarm certificate must be provided. Protective Device Premium Credit Device Credit % Central station burglary alarm system 7 Central station fire alarm system 7 Burglary alarm system that alerts the police department 6 Fire alarm system that alerts the fire department 6 Local burglary and/or fire alarm system (smoke detector) 5 H308 H308ST0 Landlord s Furnishings (H003ST0 Only) For an additional premium, coverage is provided for a major appliance used to preserve or cook food, wash or dry dishes or clothes, or for wall-to wall carpeting owned by the insured and located in another apartment rented or held for rental to others situated on the residence premises. The additional premium shall be $30 per policy plus an additional premium per unit. Landlord s Furnishings Coverage Additional Premium per Unit Limit Premium $1,000 $4 2, , , , Format Date 10/23/

43 H312 H312ST0 Increased Limits on Business Property The $2,500 limit of liability for business property on the residence premises may be increased to $10,000 in increments of $2,500. The premium for each $2,500 is $25. The limit of liability in excess of $2,500 does not apply to business property in storage or held as a sample or for sale or delivery after sale or to business property pertaining to a business actually conducted on the residence premises. (Refer to endorsement H042ST0 Permitted Incidental Occupancies, Residence Premises). When the on-premises limit is increased, the off-premises limit of $250 is automatically increased at no additional premium charge to an amount that is 10% of the total on-premises limit of liability. H313 H313ST0 Incidental Motorized Land Conveyances For an additional premium, Coverage E Personal Liability and Coverage F Medical Payments to Others apply to bodily injury or property damage arising out of the ownership, maintenance, use, loading or unloading of a motorized land conveyance, or the entrustment by an insured of the motorized land conveyance to any person. This does not include golf carts. Provide the Company with each operator s driver s license number and date of birth. Coverage E Additional Premium Limit Premium $100,000 $15 200, , , , Coverage F Additional Premium Limit Premium $2,000 $1 3, , ,000 4 H314 H314ST0 Special Computer Coverage For an additional premium, the insured s computer equipment will be covered against risks of direct physical loss except as excluded in the endorsement. The additional premium shall be $15. Format Date 10/23/

44 H372 H372 Mortgagee Clause This endorsement extends payment of a loss under this policy to the mortgagee who is named as payee(s) in the Declarations of this policy. H500 H500ST0 Replacement Cost on Contents (Forms H004 and H006 only) For an additional premium, Coverage C Personal Property is extended to include the full cost of repair or replacement without deduction for depreciation. The minimum limit of liability for Coverage C Personal Property is $25,000. Additional Premium Form % of Basic $250 Deductible Premium H004ST0 30 H006ST0 30 H525 H525ST0 Neighborhood Crime Watch (Forms H003ST0 and H006ST0 Only) For a premium credit, the residence premises must be located within the boundaries of a neighborhood crime watch area and the insured must be an active, participating member of that neighborhood crime watch area. The premium credit shall be $10. Property Endorsements (H590 to End) H590 H590ST0 Senior Discount (Forms HO03STO and HO06STO Only) For a premium credit, one of the named insureds must be at least 60 years old and the residence premises must be the insured s principal residence. The premium credit shall be 15%. F.30850B F.30850B HOMEGARD (Form H003ST0 Only) The limit of liability for Coverage C is increased to 70% of the Coverage A Dwelling limit of liability. The Homegard endorsement provides a credit of 16%. Please see a copy of the endorsement for further detail. Format Date 10/23/

45 F.30915A F.30915A Sections I and II Exclusions for Computer-Related Damage or Injury The exclusions apply to policies endorsed with the following forms: Permitted Incidental Occupancy-HO42STO 0188; Permitted Incidental Business Occupancy-Other Residence-HO43STO 0188; Farmers Personal Liability-Incidental Farming Personal Liability-HO72STO 0188; or Business Pursuits-HO71STO F.31025C Homeowner Deluxe Endorsement F.31025C Homeowner Deluxe Endorsement (Form H003STO only) For an additional premium, Section I-Property Coverages, Additional Coverages, Conditions, and Section II-Liability Coverages, Exclusions, and Additional Coverages are modified. The additional premium is 18% of the policy premium. Minimum Coverage A of $150,000 is required. All other property qualifications remain the same per the CSE Guidelines. (See a copy of the Homeowners Deluxe Endorsement for specific coverage changes.) F.31075B F.31075B Special Provisions (All Forms) Form F.31075B is required on all Homeowners Policies. F.31550A F.31550A Pathogenic Organisms Exclusion The following exclusion is added to SECTION II-EXCLUSIONS, 1. Coverage E- Personal Liability and Coverage F-Medical Payments to Others do not apply to bodily injury or property damage: m. Arising out of any pathogenic organisms, regardless of any other cause or event that contributed concurrently or in any sequence to that injury or damage. Format Date 10/23/

46 Pathogenic Organisms means any bacteria, yeasts, mildew, virus, fungi, mold, or their spores, microtoxins or other metabolic products. F.32465A Identity Recovery Coverage F.32465A Identity Recovery Coverage For no additional premium, policies endorsed with the Homeowner Deluxe Endorsement (F.31025C) will automatically include Identity Recovery Coverage endorsement. The Identity Recovery Coverage endorsement pays for various out-of-pocket expenses due to a covered identity theft, including lost wages, up to specified sub-limits. This endorsement can be endorsed onto policies that do not have the Homeowner Deluxe Endorsement (F.31025C) for an additional premium of $15. F.32760A Amendatory Endorsement (Form H003ST0 Only) The limit of liability for Coverage C is increased to 70% of the Coverage A Dwelling limit of liability. F Equipment Breakdown Enhancement (H003) Policies endorsed with this endorsement will be covered for Equipment Breakdown, with a $25,000 limit (will be increased to $50,000 effective 11/1/12) and a $500 deductible. This coverage also includes Expediting Expense, Spoilage Coverage, and Pollutant Clean-up and Removal caused by a covered equipment breakdown, up to specified sublimits. The loss must be at the residence premises. If we replace equipment due to a covered equipment breakdown, we may pay up to 25% more than we otherwise would to replace it with equipment that is better for the environment, safer, or more efficient than the equipment being replaced. F Equipment Breakdown Enhancement (H004) Policies endorsed with this endorsement will be covered for Equipment Breakdown, with a $25,000 limit (will be increased to $50,000 effective 11/1/12) and a $500 deductible. This coverage also includes Expediting Expense, Spoilage Coverage, and Pollutant Clean-up and Removal caused by a covered equipment breakdown, up to specified sublimits. The loss must be at the residence premises. If we replace equipment due to a covered equipment breakdown, we may pay up to 25% more than we otherwise would to replace it with equipment that is better for the environment, safer, or more efficient than the equipment being replaced. Format Date 10/23/

47 F Equipment Breakdown Enhancement (H006) Policies endorsed with this endorsement will be covered for Equipment Breakdown, with a $25,000 limit (will be increased to $50,000 effective 11/1/12) and a $500 deductible. This coverage also includes Expediting Expense, Spoilage Coverage, and Pollutant Clean-up and Removal caused by a covered equipment breakdown, up to specified sublimits. The loss must be at the residence premises. If we replace equipment due to a covered equipment breakdown, we may pay up to 25% more than we otherwise would to replace it with equipment that is better for the environment, safer, or more efficient than the equipment being replaced. F.33980A Additional Interests Residence Premises In addition to the Mortgagee(s) shown in the Declarations, the persons or organizations named in the Declarations also have an interest in the residence premises. If we decide to cancel or not to renew a policy, the persons or organizations named in the Schedule will be notified in writing. All other provisions of this policy apply. This endorsement is available in the HO3, HO4 and HO6 programs. Initial Residence Coverage E, Increased Limits Additional Premium Limit Premium $200,000 $10 300, , , Initial Residence Coverage F, Increased Limits Additional Premium Limit Premium $2,000 $3 3, , , Increased Limits Additional Residence Coverage E Increased Limits Additional Residence Occupied by Insured (One- or Two- Family) Coverage E Additional Premium Limit Premium $100,000 $5 200, ,000 7 Format Date 10/23/

48 Additional Premium Limit Premium 400, ,000 9 Increased Limits Additional Residence Coverage F Increased Limits Additional Residence Occupied by Insured (One- or Two- Family) Coverage F Additional Premium Limit Premium $2,000 $1 3, , ,000 4 Multi-Policy Discount A 10% discount will be given to all policyholders when both a Homeowners policy (either forms H003ST0, H004ST0 or H006ST0) and an Automobile policy are written with CSE Insurance Companies. The discount is to be applied to the Coverage A base premium plus any increase/decrease in premium for Coverage C. Please note on the application the CSE or CSE SAFEGUARD Policy number in the Remarks section. The discount will be effective from the date of the new policy. If an auto policy is written to make the account eligible for the discount, the effective date of the discount is the date of the auto policy. Format Date 10/23/

49 Arizona Homeowners Comparison Civil Service Employees Insurance Company CSE Safeguard Insurance Company Underwriting/Binding Guidelines Feature HO3 HO3 Deluxe HO4 & HO6 Employment Eligibility Civil Servants are eligible for Civil Service Employees Company. Non-civil servants are eligible for Safeguard Company. Minimum Coverage $80,000 Metro $70,000 Non-Metro $150,000 HO4 $25,000 HO6 $25,000 Maximum for binding $800,000 HO4 $250,000 HO6 $250,000 Primary /Seasonal / Secondary Residences Seasonal/Secondary OK with primary residence, HO6 Rented to Others acceptable with HO33 endorsement. SQFT Minimum 800 Maximum Coverage A with UW approval $1,500,000 Liability Limits Offered $100,000-$500,000; Umbrellas available separately Deductibles Offered $100 (HO3 and HO6 only) $250 $500 $1000 $2500 $5000 Personal Injury HO3: Included under bodily injury definition Add HO82 endorsement Extended Replacement Cost 150% included 175% N/A Determining Replacement Cost Marshall & Swift RCT Express Available at and within SPInn N/A Payment Plans Payment History Year Built Pay in full 4 Pay Plan: 25% down+3 payments ($6 installment fee) 6 Pay Plan: 16.7% down+5 pay of 16.66% ($6 installment fee) 11 Pay Plan/ Monthly EFT: 16.7% down+10 installments (no installment fee) Checks, Credit Cards and Electronic Checks accepted Ineligible: Tier 29 of Financial Stability Factor table per the ChoicePoint report, history of late pays, collections, bankruptcy, bad debts, liens, or judgments No Age Restriction; see update requirements for homes over 30 yrs old. Losses Ineligible if applicants had any of the following losses in the past three years: Liability, Theft/Vandalism or Water; any loss over $5000; two (2) or more losses ChoicePoint Updates CLUE required for eligibility. Updated/Up to Code if over 30 years old. Galvanized plumbing acceptable if 40 years old or newer & policy deductible is at least $1,000. Circuit Breakers required. Roofs Tar & gravel or flat roofs eligible if replaced within the last 20 years; Composition/Asphalt Shingle roofs acceptable if replaced within the last 30 years. No wood shake roofs. Agency Use Only. This information is for ease of comparison and does not change the policy contract in anyway. Always refer to the policy contract for coverage information and details. Information is subject to change without notice. Ver Format Date 10/23/

50 Underwriting/Binding Guidelines Feature HO3 HO3 Deluxe HO4 & HO6 Protection Class Supporting Business Modular and Manufactured Homes Construction Type Earthquake Slope Protection Classes 1-7 and properties using the suburban rating rule are eligible. Protection Class 8-10 ineligible. Not Required Eligible if there is a permanent foundation and wood frame construction. No Mobile Homes Ineligible: dwellings built on piers or posts Available see HO56 in underwriting guidelines Dwellings must not be on a slope of 35 degrees or more Ineligible Animals Trampolines Bars on Windows Pools Guard dogs and dog breeds with a known propensity for viciousness, such as Chows, Akitas, Doberman-Pinschers, Pit-Bulls (a.k.a. American Staffordshire Terrier), Working American Bulldogs, Presa Canarios, Rottweilers and Mastiffs (all types); or any mixed breeds containing the above dog types or any dog with a prior bite history. Nondomesticated animals (i.e.., Large Cats, Wolf Hybrid dogs, Bears, Snakes, etc) Not Eligible Acceptable if Windows are covered by releasable security bars. Non-releasable security bars are ineligible in living areas. Pools and Diving boards are acceptable if up to current code. The yard must be fenced. Slides are ineligible. Construction Type Common Construction Frame or Brick Eligible. Risks which are architecturally unique (e.g.; geodesic, log homes, Victorian or Edwardian) are not eligible. Course Of Construction Mortgagees Named Insured Properties currently under construction are not eligible. If more than 2 mortgagees, submit non-bound. The named insured must be an individual(s). Trusts and certain LLCs (formed for tax purposes with no employees) can be listed as additional insureds. Corporations are ineligible as named or additional insureds Ineligible Occupations Deductible Credits Reporters; Authors; Editors; Publishers; Broadcasters; Television and/or Radio Personalities; Professional Actors, athletes, entertainers or celebrities; Elected or candidates for positions in public office. Credits Available Deductible % Credit Maximum Credit $ $100 $ $250 $ $350 $ $450 Insurance Scoring Financial Scoring Credits up to 40% Agency Use Only. This information is for ease of comparison and does not change the policy contract in anyway. Always refer to the policy contract for coverage information and details. Information is subject to change without notice. Ver Format Date 10/23/

51 Credits Available Alarm Credits Central Station Burglary Alarm System 7%; Central Station Fire Alarm system 7%; Burglary system that alerts the police department 6%; Fire alarm system that alerts the fire department 6%; Local burglary and/or fire alarm system (Smoke Detectors): 5% Maximum Available Credits 14% Multi-policy discount 10% Neighborhood Watch Credit $10 Homegard Credit Home Inspection Discount HO3 and HO6 A premium credit will be given: primary residence; year built 1960 or newer; no losses in past three years 10% Discount with proof of home inspection. Inspection must be dated within 90 days of inception or renewal date and applied for one term only. Proof of the inspection is not required if the home is in escrow. HO3 & HO6 only. Senior Discount 15% discount. One of the named insureds must be at least 60 years old and the residence premises must be the insured s principal residence. Professional Occupation Discount 15% for Firefighters (must be government)); 10% for Law Enforcement Officers, Teachers or Professors; 5% for Accountants, Actuaries, Pharmacists, Scientists, Engineers, Farmers, Clergy, Physical Therapists Newer Home Credits Available for HO3 only: up to 23% based on year built Civil Servant Civil servants qualify for Civil Service Employees Insurance Company which is a discounted program (local, state or federal employees) Coverage Comparisons Features HO3 HO3 Deluxe HO4 & HO6 Replacement Cost Contents Included:70% of Coverage A, Broad Form Perils Included:70% of Coverage A, All Risk Add H500 endorsement Building & Ordinance N/A 20% of coverage A and is not an additional amount of insurance; is subject to the limit of coverage A N/A Equipment Breakdown Enhancement Endorsement $27 premium. Adds mechanical breakdown & electrical disturbance coverage. $500 deductible/$25,000 (will be increased to $50,000 effective 11/1/12) per occurrence limit for dwelling, contents and appurtenant structures. No occurrence limitation per policy term. Government Owned Property $500 (There is no coverage for electronic equipment, computers, and computer software, sound receiving and transmitting equipment, for equipment designed for the reproduction of sound or other devices for use with equipment designed for the reproduction of sound) N/A Identity Recovery Coverage Available $15.00 Included Available $15.00 Pathogenic Organisms $5,000 $10,000 Not available Agency Use Only. This information is for ease of comparison and does not change the policy contract in anyway. Always refer to the policy contract for coverage information and details. Information is subject to change without notice. Ver Format Date 10/23/

52 Coverage Comparisons Features HO3 HO3 Deluxe HO4 & HO6 Backup of sewers and drains (see policy conditions) $3,000 under coverage A & C Debris Removal $500 $5,000 under coverage A & C Not available Money, bank notes, bullion, gold other than goldware, silver, silverware, platinum, coins & medals Securities, accounts, deeds, etc $1,000 $200 $5,000 $1,000 Watercraft $3,500 $1,000 Trailers not used for watercraft $4,500 $1,000 Grave markers $6,000 $1,000 Theft of Jewelry, watches, furs, precious and semiprecious stones $2,500 per item; $10,000 aggregate $1,000 Theft of Firearms $2,500 $2,000 Theft of silverware, silverplated ware, goldware, gold-plated ware, pewterware Theft of Rugs, carpet and tapestry (except wall to wall carpeting) Business Personal Property, on premises Business Personal Property, off premises $3000 per item; $10,000 aggregate $2,500 $2,500 per item; $7,500 aggregate Not Applicable $10,000 on premises; $1,000 away from premises $2500 on premises; $250 away from premises 1, Spoilage of Food $500 Not available Re-key Locks due to theft $1000 Reward for arrest and conviction for arson Not available $5000 Not available Golf Carts $2000 ($500 deductible applies) Not available Additional Living Expense for a child under age 21 attending school more than 30 miles from residence premises $200 per month for up to 3 months Not available Trees, shrubs and other plants (see policy for perils insured against) 5% of Coverage A limit, maximum $ % of Coverage C limit, $500 maximum for any one Agency Use Only. This information is for ease of comparison and does not change the policy contract in anyway. Always refer to the policy contract for coverage information and details. Information is subject to change without notice. Ver Format Date 10/23/

53 Coverage Comparisons Features HO3 HO3 Deluxe HO4 & HO6 Credit card, fund transfer, forgery and counterfeit money $1000 Loss Assessment $5000 $1000 Electronic Data Processing hardware & related peripheral equipment Up to $5,000 on electronic data processing hardware & related equipment, which is otherwise excluded by this form No coverage Damage to Property of others $1000 per occurrence $500 Agency Use Only. This information is for ease of comparison and does not change the policy contract in anyway. Always refer to the policy contract for coverage information and details. Information is subject to change without notice. Ver Format Date 10/23/

54 Inland Marine Scheduled Personal Property Introduction Eligible Inland Marine property may be added by endorsement (HO-61STO Endorsement) to an H003, H004,or H006 policy. The scheduled personal property coverage requires additional premium. Binding Authority An agent s binding authority is based on a percentage of the Homeowner policy s unscheduled personal property (Coverage C) limit. As the limit of a policy s unscheduled personal property coverage increases, so does the agent s binding authority, up to a maximum amount as listed below: Agent Binding Authority Any one item, pair or set, including stamp or coin collections Total schedule of all items on the policy % of Unscheduled Personal Property (Coverage C) 20% or $30,000, whichever is less 50% or $50,000, whichever is less All scheduled personal property (per item or aggregate) exceeding the agent s binding authority must be submitted non-bound for underwriting approval. See the non-bound submission procedure in this section. Ineligible Risks Risks with frequent travel exposure (more than 4 weeks) Persons in the public eye and/or engaged in any high profile occupations Residents of rooming or boarding houses or college dormitories Sports Card collections Note: See specific Scheduled Personal Property categories for ineligible property. Non-Bound (Submit for Approval) Persian or hand woven rugs valued at over $2,000 or located on floors Items not in the care, custody, or control of the named insured Any schedule exceeding agent binding authority. Policies may be issued covering only engagement rings, wedding rings, and guard rings in the name of the two individuals as their interest may appear, irrespective of domicile. Format Date 10/23/

55 Non-Bound Submission Procedure An agent may not bind an application where the risk does not qualify for coverage under the underwriting guidelines of this section of the manual. Underwriting will review a non-bound endorsement submitted by an agent if the following conditions are met: Agent does not accept premium. Agent indicates non-bound on the endorsement. Applicant and agent do not sign and date the endorsement. Endorsement does not show effective dates but is otherwise completed in full. Agent includes with the endorsement a detailed description of the circumstances surrounding the non-bound submission. If Underwriting approves the endorsement for binding, Underwriting will return the original endorsement to the agent requesting the premium and an effective date. To assure prompt handling, the agent should forward the endorsement, premium and underwriting memo of acceptance through the normal new business submittal process. Policy Provisions Coverage This endorsement provides coverage for all risks of direct physical loss or damage, subject to certain exclusions and conditions (see endorsement contract for specific exclusions and conditions). Territorial Limit This endorsement covers the scheduled property world-wide. However, fine arts are covered only within the United States and Canada. Deductible No deductible is applied to a loss for property covered by this endorsement. Pair, Set, or Parts Loss to a Pair or Set In case of a loss to a pair or set, we may elect to: Format Date 10/23/

56 Parts repair or replace any part to restore the pair or set to its value before the loss, or pay the difference between actual cash value of the property before and after the loss. In case of a loss to any part of covered property, consisting of several parts when complete, we will pay for the value of the part lost or damaged. No Assignment Clause Scheduled personal property does not contain an assignment clause; therefore, CSE will not transfer the insurance with the property. When the property is no longer owned by the insured, the item or schedule must be deleted from the policy. Newly Acquired Property Jewelry, Furs, Cameras, and Musical Instruments Only Fine Arts We cover newly acquired property of a class already insured. The lesser of the following limits applies: 25% of the amount of insurance for that class of property, or $10,000. When new property is acquired the insured must: report these objects to us within 30 days, and pay the additional premium from the date acquired. When fine arts are scheduled, we cover objects of art acquired during the policy period for their actual cash value. However, we will pay no more than 25% of the amount of insurance for fine arts scheduled. For coverage to apply for newly acquired fine arts the insured must: report the acquisition of these objects to us within 90 days, and pay the additional premium from the date acquired. Format Date 10/23/

57 Golf and Sports Equipment, Silverware, Stamps and Coins Golf equipment, silverware, sports equipment, and stamp and coin coverages are not automatically covered and must be scheduled for coverage to begin. Preparing Endorsements The scheduled personal property is an endorsement (HO-61STO) and, as such, must be added within 30 days of acquisition of the property by the named insured using a current ACORD Policy Change Request form (PCR). The PCR must indicate which items, sets, or collections are to be added, along with the appropriate values of each item, set, or collection. In addition, all documentation (appraisals, bills of sale, gemologist diagrams, etc.) should be attached to the PCR. Backdating Backdating of scheduled personal property is strictly prohibited. Backdating is defined as follows: posting an effective date of the coverage prior to the time coverage is bound, without prior underwriting approval. Rounding of the premium all premiums for coverage must be rounded to the nearest dollar. For purposes of this rule, an amount of $0.50 or more shall be rounded up to a $1.00. Eligibility and Rates Camera Property Covered Scheduled cameras, projection machines, and related equipment Movable sound equipment pertaining to the recording, projection, reproduction, and operation of motion pictures Home video cameras, playback recorders and articles of equipment pertaining thereto Miscellaneous property such as films, binoculars, telescopes, microscopes and the like, which are used in conjunction with cameras or photographic equipment Not Covered Television cameras and equipment; coin and token-operated devices; cameras or other camera property for account of dealers, manufacturers and individuals principally engaged in photography or videography for remuneration. Format Date 10/23/

58 Value The minimum value for camera body shall be $200. The minimum value for each item of miscellaneous equipment shall be $50. Appraisal Items over $500 require an appraisal or bill of sale not more than 24 months old. Schedule Requirements All items must be individually listed and supported by an accurate description, to include the manufacturer s name, type, serial number, purchase price, date of purchase, and the amount of insurance applicable. The application should be accompanied by an appraisal or bill of sale (if appraisal is not warranted). Miscellaneous items of not more than 10% of the total amount of insurance to be scheduled under this floater may be blanketed. Premium Fine Arts The annual premium per $100 of insurance shall be $1.65. Property Covered Value Scheduled paintings, etchings, pictures, tapestries, art glass windows, bona fide works of art (such as valuable rugs, statuary, marbles, bronzes, antique furniture (not for daily use, must be display only), rare blocks, antique silver, manuscripts, porcelains, rare glass, and bric-a-brac) of rarity and historical value, and antique guns built prior to December 31, The minimum value per item shall be $200. Appraisals Items over $2,500 require an appraisal or bill of sale not more than 24 months old. Schedule Requirements Endorsement should itemize articles to be insured, with respective amounts of insurance applicable. The locations at which the property is situated at Format Date 10/23/

59 inception of the policy are to be stipulated in the policy with the insured value at each location. The application should be accompanied by an appraisal or bill of sale. Premium The annual premium per $100 of insurance shall be as follows: Coverage Premium First $10, Next $15, Next $75, Fur Coverage above $200,000 is not available. Property Covered Value Scheduled fur coats, neckpieces, evening wraps and garments trimmed with fur or consisting principally of fur, being property of insured and resident family members. The minimum value per item shall be $500. Appraisals Items valued at more than $1,000 require an appraisal or bill of sale no older than 24 months. The appraisal should include a complete description of each scheduled item; it must describe the type and color, the length of garment, the country of origin, and date and place of purchase. Schedule Requirements All items must be described and scheduled with the value of each item listed. Upon renewal, scheduled fur policies may be subject to a reduced coverage amount due to a nominal depreciation factor, unless a current appraisal is submitted. In this case the policy will be amended to indicate the new appraised value. The endorsement should be accompanied by an appraisal or bill of sale. Premium The annual premium per $100 of insurance shall be $0.45. Format Date 10/23/

60 Golf Equipment Property Covered Golf clubs, golf clothing, and golf equipment Property Not Covered Value Watches and jewelry, golf balls (except against loss by fire or burglary), property held for sale. The minimum value per set shall be $250. Schedule Requirements All items to be scheduled must include a complete description and value. Premium Jewelry The annual premium per $100 of insurance shall be $1.00. Property Covered Scheduled jewelry, watches, rings, pens, pencils, flasks, smoking equipment, cigarette cases, and similar articles. Property of the insured and resident family members is covered by the policy. Servants are not considered family members. Property Not Covered Value Damaged gemstones including chipped or cracked diamonds, or other items of value which need repair Loose gemstones Silverware, goldware, plated ware, and pewterware. It shall not be permissible to issue coverage involving jewelry belonging to unrelated persons residing together. (exception: Engagement ring) The minimum value per item shall be $250. Format Date 10/23/

61 Appraisals Items valued at more than $5,000 require a local appraisal no older than 24 months, and should include the following information: Each ring should be described as silver, platinum, white or yellow gold with K (carat) weight as 10, 14, 18, 20 or 24 and specified as either a signet, engagement, Wedding, or dinner ring. Each ring or earring with precious stone settings should be described as having one, two, three or more stones and the color, cut, clarity and weight of stones or gems indicated. Each bracelet, brooch or pin should be similarly described giving its size, and indicating color, kind and weight of stones or gems. Necklaces should be described indicating the number and length of strands and the kind, number and color of stones or gems. Watches and bands must be properly described to indicate man or woman s jewels, the maker, works, and the jeweled settings in case or wrist band. Other articles of jewelry must be clearly identified according to maker, shape, setting, etc. Schedule Requirements The application should itemize all articles to be insured, with applicable amounts of insurance, and should be accompanied by a current appraisal or bill of sale. Note: To facilitate claim settlement, an application for an article of jewelry worth more than $25,000 must be accompanied by a photo and jewelry or gemologist diagram in addition to the appraisal. These articles may not be bound. (See non-bound submission procedure.) Specific Items in Bank Vaults Items in a bank vault require a minimum value of $10,000. Items may not be out of the bank vault for more than 10 days a year. The annual premium for specific items in bank vaults shall be $0.30 per $100 of insurance. Due to a substantially reduced rate, coverage on items in bank vaults shall cease unless the insured notifies the company in advance of any removal from Format Date 10/23/

62 the vault and pays the appropriate additional premium pro-rata for the length of time the property is off bank premises. Broad Pair and Set Coverage When this coverage is desired, an additional premium is charged for the total amount of insurance on the applicable items, at an annual rate of $0.50 per $100 of insurance. Premium The annual premium per $100 of insurance shall be $1.30. Musical Instruments Property Covered Musical instruments, articles, and support equipment Property Not Covered Value Musical instruments played for remuneration are not covered. A professional under this form is designated as a person who receives remuneration for playing a musical instrument during the term of the policy. Radios, hi-fi stereo equipment, TVs and tape recorders Sheet music The minimum per item value shall be $200. Appraisals Items valued at more than $2,000 require an appraisal or bill of sale not older than 24 months. Schedule Requirements The application should itemize articles to be insured, including identification numbers and amounts of insurance. The application should be accompanied by a current appraisal or bill of sale. Premium The annual premium per $100 of insurance shall be $0.45. Format Date 10/23/

63 Silverware Property Covered Silverware, silver-platedware, goldware, gold-platedware, pewterware. Property Not Covered Value Pens, pencils, flasks, smoking implements, accessories or articles of personal adornment; property pertaining to the business, profession, or occupation of the insured. The minimum value for individual serving pieces shall be $ The minimum value for a set of service shall be $100. Appraisals Items valued at more than $1,000 require an appraisal or bill of sale not older than 24 months. Collections valued at more than $3,000 require an appraisal or bill of sale not older than 24 months. Schedule Requirements All property must be scheduled to show name of manufacturer, pattern, and values. CSE does not require a meticulous listing of each item being scheduled; however, the property must be adequately described. For example: One set gold, International flatware (or other manufacturer s name) consisting of 4, 6, 8, etc., place settings of the following (list type of spoons as dessert, coffee, soup; forks as dinner, salad, etc.; and any other miscellaneous pieces). Next, state the pattern of the gold flatware and the value, etc. The endorsement should be accompanied by a current appraisal or bill of sale. Premium The annual premium per $100 of insurance shall be $0.40. Sports Equipment and Guns Floater Property Covered Scheduled sports equipment and accessories, and guns Format Date 10/23/

64 Property Not Covered Value Golf Equipment Clothing Boats Bicycles Underwater (SCUBA) equipment Theft from an unattended automobile is excluded unless there is visible evidence of forcible entry to a securely locked, fully enclosed body or compartment. The minimum value per item shall be $200. Schedule Requirements All property must be scheduled to show name of manufacturer; identifying marks or numbers (including serial numbers, if applicable); and the amount of insurance for each scheduled item. Expensive guns (valued at more than $500) and foreign made guns must be supported by a bill of sale which lists the guns serial number. Premium The annual premium per $100 of insurance shall be $3.00. Stamp and Coin Collection Property Stamps Postage stamps including due, envelope, official, revenue, match and medicine stamps, covers, locals, reprints, essays, proofs, and other philatelic property owned by or in the custody or control of the insured, including the books, pages, and mountings Coins Rare and current coins, medals, paper money, bank notes, tokens of money, and other numismatic property owned by or in custody or control of the insured Format Date 10/23/

65 Value including coin albums, containers, frames, cards, and display cabinets in use with such collection. The minimum value for individual stamps and coins shall be $10. The minimum value for collections shall be $100. Appraisals Items valued at more than $10 require an appraisal, bill of sale, or listing in an official stamp or coin catalogue, not older than 24 months. Schedule Requirements All scheduled items must be itemized with applicable amounts of insurance. Stamps or coins valued in excess of $300 each should be listed. The application should be accompanied by a current appraisal, bill of sale, or catalogue listing. Premium Stamp Collection The annual premium per $100 of insurance shall be $0.45. Coin Collection Change History The annual premium per $100 of insurance shall be $ /16/2014 Updates Added risks located on more than 5 acres of land to the Ineligible Risks section. 6/23/2014 Updates Increased agent s Coverage C binding authority for HO4 and HO6 policies to $250,000 and for the HO32 Unit Owners, Special Coverage endorsement to $300,000 (including the automatic 10% of Coverage C). Updated the description for the Neighborhood Crime Watch Discount. 4/11/2014 Updates Updated the EFT service charge to $0. Introduced a $15 late fee. Increased the reinstatement fee from $6 to $20. Format Date 10/23/

66 11/25/2013 Updates Updated the Ineligible Risks section and the Losses section of the Product Comparison chart to include vandalism losses as ineligible along with theft losses. 5/17/2013 Updates Updated the H032 Endorsement by removing the requirement that Coverage A cannot exceed the Coverage C limit of liability. Updated the Homegard endorsement renewal criteria for policies with multiple losses. 2/25/2013 Updates Amended the Coverage Comparison chart to show that Building and Ordinance coverage is not available for HO3 policies without the Deluxe endorsement. Clarified that the $100 deductible is only available for HO3 and HO6 policies. 9/7/2012 Updates Updated references to the Equipment Breakdown Enhancement endorsement amending the endorsement number and updating the coverage limit effective 11/1/12. 5/15/2012 Updates Updated the Ineligible Risks section to include all types of Mastiff dogs and dwellings purchased through distressed financial sales. 1/20/2012 Updates Added the F.33980A Additional Interests Residence Premises endorsement to the Index of Endorsements and Homeowners Endorsements sections. Updated the Ineligible Risks section to include risks undergoing renovation or reconstruction. 12/12/2011 Updates Amended the H032 endorsement details to advise of an agent binding authority limit of $50,000 (including the automatic 10% of Coverage C) for Coverage A. 9/12/2011 Updates Updated the Ineligible Risks section to include risks within a 1 mile radius of an active wildfire. Format Date 10/23/

67 6/7/2011 Updates Updated references for the 6 Pay Plan so that it is now offered for both new business and renewals. 4/20/2011 Updates Corrected the Neighborhood Crime Watch Credit section of the comparison chart to reflect a $10 discount. Renamed all references to the 55 and Retired discount to Senior Discount and updated the description. Changed the Ineligible Risks to state that manufactured homes without a permanent foundation and without wood frame construction are ineligible. 11/18/2010 Updates Amended description of unusual liability exposures in the Ineligible Risks section to include dwellings with lead based paint. Removed references to the rating disk and German Shepherds. Updated the Inland Marine Binding Authority section. Amended the description of the HO32 endorsement to clarify Coverage A cannot exceed the Coverage C limit of liability. Updated references to the 55 and Retired Discount to clarify that the discount applies to HO3 and HO6 policies only. 2/9/2010 Updates Updated the Financial Stability Factor Table. Changed the Ineligible Risks list to replace Tier 28 with Tier 29 on the Financial Stability Factor Table. Increased the Professional Occupation Discount for firefighters to 15%. Added a product comparison chart. 6/25/2009 Updates Updated agent Coverage A binding authority for HO3 policies to $800,000. Added CSE can consider risks with Coverage A up to $1,500,000 on a nonbinding basis ($2,000,000 for Le Club and President s Council agents). 5/12/2009 Updates Removed Dwellings built prior to 1960 from the Ineligible Risks section and Dwellings with flat roofs from the Non-Bound Risks section. Replaced the F.32815A, F.32820A and F.32825A endorsements with the F.32815B, F.32820B and F.32825B endorsements. Increased the amount an item of scheduled jewelry can be worth before an appraisal is required from $2,500 to $5, /05/2008 Updates Updated the description of the F.30850B Homegard endorsement adding "Please see a copy of the endorsement for further detail." Format Date 10/23/

68 Changed the Multi-Policy Discount to include HO4 policies. 10/03/2008 Updates Added to the ineligible risks list any risk that falls in Tier 28 of the Financial Stability Factor Table per the ChoicePoint report. Added the Financial Stability Factor Table. Added the Professional Occupation Discount. Updated the details of the Homegard Endorsement. 8/22/2008 Updates Increased the photo & jewelry/gemologist diagram requirement for scheduled jewelry items above $10,000 to above $25,000 per item. Updated the ineligible list to include the acceptability of galvanized plumbing if 40 years or newer and policy deductible is at least $1,000. Updated the ineligible list to include the acceptability of Composition/Asphalt shingle roofs if replaced in the last 30 years, from 20 years. Updated the Home Inspection Discount criteria to indicate that a copy of the home inspection is not required if the home is in escrow. 5/1/2008 Updates Updated ineligible list to include risks in pre-foreclosure or foreclosure. Clarified the ineligible list to include Pit Bulls (a.k.a. American Staffordshire Terriers) 3/1/2008 Updates Updated the installment payment plan description to include the 6 pay option. Increased agent binding authority for Coverage C on H004 policies to $80,000. 2/15/2008 Updates Corrected the description for the Multi-Policy Discount. Updated the ineligible list to show 800 is the minimum square footage versus 1,000. Format Date 10/23/

69 11/06/2007 Updates Amended the ineligible risks list to include swimming pools with slides 10/16/2007 Updates Updated the premium charge for Identity Recovery Coverage. 09/11/2007 Updates Corrected the spelling of Presa Canario in the Ineligible Risks section. Created a Policy Discounts Section that includes the Premises Alarm or Fire Protection System, Neighborhood Crime Watch, and 55 and Retired discounts. Added the Age of Home Discount and Home Inspection Discount to the Policy Discounts Section. Updated the Multi-Policy discount to include HO4 policies. Format Date 10/23/