THE SUTTER INSURANCE COMPANY. California Effective Date: October 1, 2007

Transcription

1 THE SUTTER INSURANCE COMPANY HOMEOWNERS 3 SPECIAL REHABILITATION PROGRAM California Effective Date: October 1, 2007 Program Manual The Sutter Insurance Company Homeowners 3 Special Rehabilitation Program is designed to provide a safe, admitted market, to meet the needs of homeowners who have been declined, cancelled, or nonrenewed by a preferred carrier. Applicants with a loss history will be accepted if, in the judgment of the underwriter, precautionary measures have been taken to prevent further losses of the same nature, or that the risk of further occurrences can be substantially mitigated by limiting coverage, increasing deductibles, and/or excluding specific peril(s) coverage(s). Residence premises with adverse risk conditions will be accepted if, in the judgment of the underwriter, precautionary measures have been taken to substantially mitigate the risk(s) or by limiting coverage(s), adding deductibles, or excluding specific peril(s) coverage. Basic Coverage Limits Eligible, Submit, & Ineligible Dwellings and/or Risks Submission & Policy Issuance Deductibles: All-Perils Deductible Specific-Perils Percentage Deductibles Increased Coverage Limits: Coverage B - Other Structures Coverage C - Personal Property Coverage D - Loss of Use Coverage E - Personal Liability Coverage F - Medical Payments to Others Decreased Coverage Limits: Coverage A - 125% Extended Replacement Cost Coverage B - Other Structures Coverage Exclusion Options: Animal Liability Specific Water Damage Theft Roof Windstorm or Hail Table of Contents Optional Coverages: Ordinance or Law Coverage Residence Held in Trust Personal Property Replacement Cost Coverage Scheduled Personal Property Personal Injury Coverage Identity Theft Coverage Multiple Family Dwellings Special Computer Coverage Water Back-Up and Sump Discharge or Overflow Discounts: Burglary Local Alarm Police Station Alarm Central Station Alarm Fire Central Station Alarm Automatic Sprinklers Territory Codes Calculation SI 3285 (11-07) Abridged THE SUTTER INSURANCE COMPANY Page 1 of 10

2 BASIC POLICY LIMITS The Sutter Insurance Company HO-3 Special Rehabilitation Program utilizes the Insurance Services Office (ISO) HO-3 (Ed. 10/2000) Policy Form. This form provides coverage on the Dwelling, Personal Property, Other Structures, Loss of Use and Personal Liability. The Basic Policy Limits are as follows: Basic Policy Limits Coverage A Dwelling Coverage B Other Structures Coverage C Personal Property Coverage D Loss of Use Coverage E Personal Liability $100,000 Coverage F Medical Payments $1,000 each person Loss Assessment $1,000 included 125% Extended Replacement Cost $ 75,000 Minimum Value PC 1-8 $ 500,000 Maximum Value (greater values will be considered but must be submitted unbound to the Company) PC 9-10 $ 300,000 Maximum Value (greater values will be considered but must be submitted unbound to the Company) 10% of the Coverage A Limit On Premises - 50% of Coverage A Limit Off Premises - 10% of on premises coverage or $1,000, whichever is greater 20% of the Coverage A Limit ELIGIBLE DWELLINGS / RISKS 1. Single family dwellings used exclusively for private residential purposes, occupied by one family, with the named insured, residing full-time on the premises. 2. Two family dwellings used exclusively for private residential purposes, occupied by no more than two families, with the named insured residing full-time in one family unit. 3. Dwellings less than 50 years of age that are in good condition. 4. Dwellings more than 50 years of age that are in good condition, with satisfactory completion of an Underwriting Questionnaire indicating COMPLETE UPGRADES to electrical, plumbing, and HVAC systems. NOTE: Dwellings more than 50 years of age constructed on slab foundations require a Specific Water Peril Deductible (See Specific Water Peril Deductible Underwriting Guidelines). 5. Dwellings located in National Board Protection Classes 1-8A. 6. Dwelling must be protected by Deadbolts, Smoke Alarms, and Fire Extinguishers. 7. Dwellings must be insured (Coverage A Limit) for 100% of replacement cost. 8. Insured and/or spouse must be gainfully employed or retired. 9. Most breeds of dogs. (See Animal Liability Underwriting Guidelines). 10. Most roof types including wood shake (See Windstorm & Hail Underwriting Guidelines). 11. Most construction types including: a) Brick and block b) Modular Homes that are constructed according to local building and zoning code, inspected upon installation, and permanently attached to the foundation c) Closed foundation post & pier homes w/ less than 24 of clearance and that are built on a slope of 15 or less. 12. Private party mortgages. 13. Properties with Swimming Pools (diving boards and slides OK), Trampolines, Jacuzzis, and/or Hot Tubs, which are properly maintained and completely fenced, with a self-closing and lockable gate. 14. Risks with a history of prior loss(es) within the last 36 months resulting from, or with increased exposure to, the perils of Windstorm & Hail, Theft, Specific Water Damage, and/or Animal Liability (See Underwriting Guidelines for the appropriate Specific Peril). 15. Up to two minor (less than $5,000) non-liability (i.e. Fire or VMM) losses or one major loss ($10,000 or more) within the last 36 months resulting from perils that can not be limited or excluded (see Specific Peril Underwriting Guidelines), or that can be substantially mitigated 16. Heated structures must have a primary source of heat that is thermostatically controlled. 17. Risks with supplemental heating devices including those that use alternative fuels with satisfactory completion of Supplemental and Alternate Heating Questionnaire (must have a separate thermostatically controlled central heating system). 18. Dwellings held in trust (One party to the trust must reside in the dwelling). 19. Risks with farm animals for personal enjoyment (See Animal Liability Underwriting Guidelines). 20. Insureds who own large, unusual, or exotic animals (See Animal Liability Underwriting Guidelines). 21. Lapse of coverage with No Known Loss Letter and coverage bound next day. SI 3285 (11-07) Abridged THE SUTTER INSURANCE COMPANY Page 2 of 10

3 22. Properties less than 5 acres. SUBMIT BASIS DWELLINGS / RISKS 1. Dwellings located in protection class 1-8A with Coverage A amounts in excess of $500, Dwellings located in protection class Dwellings more than 50 years of age that are in good condition with satisfactory completion of an Underwriting Questionnaire indicating PARTIAL UPGRADES to electrical, plumbing, and HVAC systems. 4. Owner occupied dwellings with joint ownership other than husband and wife, registered domestic partners, or direct family. 5. Properties located immediately adjacent to property which would not be freely written by the Company. 6. Properties located within 1000 of property that is rated as a MEDIUM fire risk, or within 1 mile of property rated a HIGH fire risk as determined by RiskMeter 7. Properties located within 1500 of water. 8. Risks with more than two minor (less than $5,000) non-liability (i.e. fire or VMM) losses within the last 36 months resulting from perils that can not be limited or excluded (see Specific Peril Underwriting Guidelines), or that have any single loss greater than $5,000, or any combination of losses greater than $5,000 in the aggregate. 9. Applicants with any liability loss within the past 36 months. 10. Dwellings under renovation. 11. Structures with supplemental heating devices including alternative fuel sources with unsatisfactory completion of Supplemental and Alternate Heating Questionnaire (must have a separate thermostatically controlled central heating system). 12. Dwellings with more than two mortgages. 13. Open foundation post & pier homes built on a slope of Applicants that have filed for bankruptcy within the past 3 years. 15. Dwellings located on 6-25 acres that are completely fenced without any farming exposure. INELIGIBLE DWELLINGS / RISKS 1. Dwellings located in a wild fire or landslide area. 2. Dwellings which are isolated, or not visible and readily accessible from a public roadway. 3. Dwellings in an area being condemned due to urban renewal, highway construction, or current condition. 4. Dwellings which have been relocated. 5. Vacant or unoccupied dwellings. 6. Dwellings in litigation and/or foreclosure. 7. Log, earthen, open pier, stilt homes or homes built on a slope greater than Dwellings where other property insurance covers the property. 9. Properties with a Swimming Pool, Trampoline, Jacuzzi, and/or Hot Tub that is not properly maintained or completely fenced with a self closing and lockable gate. 10. Dwellings attached to, occupied as, or converted from a commercial risk. 11. Dwellings where a business exposure exists. 12. Dwellings with student housing. 13. Dwellings with any heating device(s) that does not have U.L. Label. 14. Dwellings that have a main source of heat that is not thermostatically controlled. 15. Dwellings with pre-existing un-repaired damage. 16. Properties with coverage on Other Structures used in connection with farming operations. 17. Risks that employ an in-servant(s) or out-servant(s)s more than 52 hours in any 90 day period. 18. Dwellings located on more than 25 acres. SUBMISSION & POLICY ISSUANCE APPLICATION: Homeowner s coverage requests must be submitted on a fully completed and signed ACORD Homeowners application. The following items must be submitted with the completed application: The following required forms must be completed and signed: California HO3 Coverage Statement. The Underwriting Questionnaire must be completed and signed, when applicable. A minimum of three recent photos (Front, Rear, & Roof) of the risk. Additional photos are required of all additional exposures, i.e. woodstoves, swimming pools, trampolines, and hot tubs. Loss history reports must be run on all new applications for insurance. VALUATION: The dwelling must be insured for 100% of its full replacement cost, excluding land value, at the time of submission or renewal. POLICY TERM: New policies are written for a period of one year. Renewal policies will be based upon the rules in effect on the effective date of the renewal. SI 3285 (11-07) Abridged THE SUTTER INSURANCE COMPANY Page 3 of 10

4 - Submission & Policy Issuance Continued on Next Page - SI 3285 (11-07) Abridged THE SUTTER INSURANCE COMPANY Page 4 of 10

5 BINDING AUTHORITY: SUBMISSION & POLICY ISSUANCE (Continued) Note that no coverage may be bound on any applications, including applications that meet all of the Company s underwriting guidelines, without the prior approval of the Company or its Authorized Agent. Bound applications, and all required supporting documentation, must be submitted within 72 hours of the effective date, otherwise coverage is bound at 12:01 a.m. the day the application is received. If the bound submission does not meet the Sutter Insurance Company underwriting guidelines for eligibility, it will be processed and a Notice of Cancellation will be issued immediately. Unbound applications that do not meet the Sutter Insurance Company underwriting guidelines for eligibility will be returned to the agent. Natural Catastrophes: Wildfires: No new policies, binders, or increases in coverage s will be accepted when a wildfire is within 30 miles of a home. Hurricanes and Tropical Storms: No new policies, binders, or increases in coverage s will be accepted in counties where a Hurricane Watch, Hurricane Warning, or Tropical Storm Warning has been posted as in effect by the National Weather Bureau. Earthquakes: No new policies, binders, or increases in coverage s will be accepted when the epicenter of an earthquake, or aftershock, of magnitude 5.0 or greater on the Richter Scale, as reported at any time by any government agency, occurs within 150 miles of the dwelling. Binding authority will be restricted for the day of, and for three days following, of the earthquake or aftershock. FEES: Policy Fee: A $40.00 policy fee is added to each policy's annual premium upon inception and at renewal. Inspection Fee: A $30.00 inspection fee is added to each policy's annual premium upon inception and every other year at renewal. PREMIUM BASIC PREMIUM: Basic is defined as the premium charged for the coverage s outlined in the Basic Policy Limits Section. It does not include credits or debits for Deductibles, Coverage Exclusions, Increased Limits, Decreased Limits, Optional Coverages, or Discounts. The definition of Basic changes, however, when the option of Replacement Cost on Personal Property is added to the policy. In this case the Basic will include the additional premium associated with adding this coverage. CANCELLATION OF INSURANCE: When this policy is cancelled by us, the premium for the period from the effective date of cancellation to the expiration date plus any fees will be refunded pro rata. When the policy is cancelled by you, the minimum earned or retained premium shall not be less than 25% of the annual premium or $250, whichever is greater, plus any fees in accordance with the Minimum Earned Endorsement which is made part of this policy. A cancellation for non-payment of premium shall be considered a cancellation request by you. ROUNDING RULE: After each step of the premium calculation, round to the nearest whole dollar An amount of forty-nine cents ($.49) or less shall be rounded down to the next whole dollar. An amount of fifty cents ($0.50) or more shall be rounded up to the next whole dollar. WHOLE DOLLAR PREMIUM RULE: The policy and endorsement premiums shall be a full dollar amount. A premium of forty-nine cents ($.49) or less shall be rounded down to the next whole dollar. A premium of fifty cents ($0.50) or more shall be rounded up to the next whole dollar. CHANGES: Policy coverages and limits may be increased or decreased, added or deleted, during the policy term by endorsement. Additional or return premium will be calculated on a pro-rata basis less the minimum earned premium if applicable. All changes will be based upon the rates, rules, and forms, in effect on the effective date of the change in coverage. PREMIUM REVISIONS: The effective date of premium revisions will be announced by the company. At no time will the effective date precede the effective date approved by the California Department of Insurance. SI 3285 (11-07) Abridged THE SUTTER INSURANCE COMPANY Page 5 of 10

6 DEDUCTIBLES ALL-PERILS DEDUCTIBLE: A $1,000 All-Perils Deductible applies to all applications that meet the approved program underwriting guidelines for eligible risks based upon risk factors and agreed upon loss history. In the event that the application does not meet the approved program underwriting guidelines for eligible risks, based upon risk factors and agreed upon loss history, the underwriter, at their discretion, may offer coverage by increasing the All-Perils Deductible to $2,500 or $5,000. Credit is taken by applying the applicable Credit Factor listed below to the Basic : All-Perils Deductible Credit Factor $2,500-5% $5,000-10% SPECIFIC-PERILS DEDUCTIBLE: In the event that the application does not meet the approved program underwriting guidelines for eligible risks, based upon risk factors and/or agreed upon loss history, the underwriter, at their discretion, may offer coverage by issuing a Specific-Perils Deductible(s) in amounts equal to 1%, 2%, 5% or 10% of the Coverage A limit. Credit is taken by deducting the appropriate credit listed below: Credit by Percentage Deductible 1% 2% 5% 10% Specific Peril Deductible Deductible Deductible Deductible Theft $3.00 $6.00 $15.00 $30.00 Specific Water Damage $3.00 $6.00 $15.00 $30.00 Windstorm or Hail $3.00 $6.00 $15.00 $30.00 INCREASED COVERAGE LIMIT OPTIONS COVERAGE B - OTHER STRUCTURES (Use HO Other Structures on the Residence Premises Endorsement) Coverage B may be increased above the Basic Policy Limit of 10% by applying the applicable rate below to the amount of increase in the Coverage B limit. If coverage is being provided for named other structures, apply the applicable rate to the full value of the structure(s) named. Limits above 30% of the dwelling value must be submitted unbound for underwriting approval. Protection Class Rate per $1, $ $ A $ $4.00 COVERAGE C PERSONAL PROPERTY (Use SI 023 (7/76) - General Change Endorsement) Coverage C may be increased above the Basic Policy Limit of 50% by applying the applicable rate below to the amount of increase in the Coverage C limit. Limits above 75% of the dwelling value must be submitted unbound for underwriting approval. Rate per $1,000 Rate per $1,000 Protection Class without HO with HO $3.00 $ $3.25 $ A $3.50 $ N/A N/A - Increased Coverage Limits Continued on Next Page SI 3285 (11-07) Abridged THE SUTTER INSURANCE COMPANY Page 6 of 10

7 INCREASED COVERAGE LIMIT OPTIONS (Continued) COVERAGE D LOSS OF USE (Use SI 023 (7/76) - General Change Endorsement) Coverage D may be increased above the Basic Policy Limit of 20% of Coverage A by applying the applicable rate below to the amount of increase in the Coverage D limit. Limits above 40% of the dwelling value must be submitted unbound for underwriting approval. Protection Class Rate per $1, A $ $8.00 COVERAGE E- PERSONAL LIABILITY (Use SI 023 (7/76) - General Change Endorsement) Coverage E may be increased above the Basic Policy Limit of $100,000 by adding the appropriate additional premium listed below: Coverage Limit $300,000 $40.00 $500,000 $55.00 COVERAGE F MEDICAL PAYMENTS TO OTHERS (Use SI 023 (7/76) - General Change Endorsement) For an additional premium the Coverage F Medical Payments to Others Limit can be increased above the Basic Policy Limit of $1,000 by adding the appropriate additional premium listed below: Coverage Limit $3,000 $10 $5,000 $20 DECREASED COVERAGE LIMIT OPTIONS COVERAGE A DWELLING (Use SI 023 (7/76) - General Change Endorsement) Extended Replacement Cost for Coverage A can be deleted entirely by applying the applicable Credit Factor to the Basic (No other decrease in Coverage A is available): Delete Extended Replacement Cost for Coverage A Credit Factor (Delete Extended Coverage) -3% COVERAGE B OTHER STRUCTURES (Use SI 023 (7/76) - General Change Endorsement) Coverage B can be deleted entirely by applying the applicable Credit Factor to the Basic (No other decrease in Coverage B is available): Decrease in Coverage B Credit Factor 100% (Delete Coverage) -5% COVERAGE EXCLUSIONS In the event that the application does not meet the approved program underwriting guidelines for eligible risks, based upon risk factors and agreed upon loss history, the underwriter, at their discretion, may offer coverage by excluding specific perils. Because these exclusions completely remove certain perils from coverage the following credits are available. Credit is taken by applying the applicable Credit Factor/Discount listed below to the Basic : Excluded Perils (Form #) Credit Factor/Discount Animal Liability (SI 3436) $3.00 Roof Exclusion (SI3496) $10.00 Windstorm or Hail (SI 3463) $10.00 Theft (SI 3457) -5% Specific Water Damage (SI 3460) -10% SI 3285 (11-07) Abridged THE SUTTER INSURANCE COMPANY Page 7 of 10

8 OPTIONAL COVERAGES ORDINANCE OR LAW COVERAGE (Use SI 3454 Ordinance or Law Coverage Endorsement) The cost of additional construction, repair or demolition of property required by a government agency in order to bring a structure up to current building code is not covered under the Basic Policy Limits. The policy may be endorsed to provide such coverage by applying the Surcharge Factor below to the Basic : Coverage Limit Surcharge Factor $10,000 10% $20,000 15% RESIDENCE HELD IN TRUST (Use HO Residence Held in Trust Endorsement) This endorsement facilitates writing the added risk of properties occupied under a trust agreement. The policy may be endorsed to provide such coverage by adding the following additional premium: Residency Condition Trustee Resides on Insured Location $30.00 Trustee and: Beneficiary OR Grantor Reside on Insured Location $60.00 Trustee and: Beneficiary AND Grantor Reside on Insured Location $75.00 PERSONAL PROPERTY REPLACEMENT COST (Use HO Personal Property Replacement Cost Endorsement) The Coverage C loss settlement basis can be changed to full replacement cost by applying the following Surcharge Factor to the Basic. Coverage Surcharge Factor Replacement Cost on Personal Property 10% SCHEDULED PERSONAL PROPERTY (Use SI Scheduled Personal Property Endorsement) Total aggregate schedule is limited to 10% of Coverage A or $25,000, whichever is less, with a maximum of $5,000 on any single item (except for jewelry which has a maximum of $10,000 on any single item). Appraisals or bills of sale, with full descriptions are required on all items over $1,000. Appraisals should be updated every three years. Class of Personal Property Rate per $100 Jewelry $1.50 Furs $1.50 Cameras & Projection Equipment $1.65 Musical Instruments (excluding Professional Instruments) $0.50 Silverware $0.65 Golfer s & Sporting Equipment $1.25 Fine Arts $0.50 Postage Stamps $1.25 Rare and Current Coins $2.50 Comics, Trading Cards, and Other Collections $1.25 Fire Arms $3.00 Mobile Communication Equipment (incl. Cell Phones) $3.50 Property Not Otherwise Classified $3.50 PERSONAL INJURY COVERAGE (Use HO Personal Injury Endorsement) MAY NOT EXCEED CPL LIMIT Personal Injury Coverage may be added to the policy by adding the appropriate additional premium listed below: Coverage $100,000 $13.00 $300,000 $39.00 $500,000 $65.00 IDENTITY THEFT COVERAGE (Use Ho Identity Fraud Expense Coverage) This endorsement provides coverage for specific expenses incurred by an insured as a result of identity fraud. The policy may be endorsed to provide such coverage by adding the following additional premium: Coverage Limit $5,000/$15,000 $25 - Optional Coverages Continued on Next Page SI 3285 (11-07) Abridged THE SUTTER INSURANCE COMPANY Page 8 of 10

9 OPTIONAL COVERAGES (Continued) MULTIPLE FAMILY DWELLING COVERAGE (Use SI 023 (7/76) - General Change Endorsement) This endorsement facilitates writing the added risk of residence premises with multiple family dwellings where you reside in at least one of the family units. The rate is reduced when proof of a separate liability insurance policy covering the unit not resided in is provided. The policy may be endorsed to provide such coverage by applying the applicable Surcharge Factor to the Basic.: Family Units per Dwelling Surcharge Factor Two Family Dwelling w/o Proof of Additional Coverage 25% Two Family Dwelling With Proof of Additional Coverage 10% SPECIAL COMPUTER COVERAGE (Use SI Special Computer Coverage) This endorsement expands protection for computer equipment as defined in this endorsement up to the limit of liability indicated in the schedule. The policy may be endorsed to provide such coverage up to a maximum of $4,500, by multiplying the rate indicated below by the limit of liability requested and adding the result to the Basic : Rate per $100 Maximum Coverage $1.50 $4,500 WATER BACK UP COVERAGE (Use HO Water Back Up and Sump Discharge or Overflow) The perils of Water Back Up and Sump Discharge or Overflow are not covered under the Basic Policy Limits. The policy may be endorsed to provide such coverage by applying the applicable Surcharge Factor to the Basic : Water Back Up Coverage With HO (RC on Coverage C) $75.00 Without HO (ACV on Coverage C) $50.00 DISCOUNTS PROTECTIVE DEVICE / SYSTEM DISCOUNTS (Use HO Premises Alarm or Fire Protection System) The following credits are calculated by applying the applicable Credit Factor to the Basic (Only one discount can be applied per protected peril). Discount is taken by applying the applicable Credit Factor to the Basic : Definitions: Local Alarm: System in which the protective circuits and devices are connected to an enclosed tamper proof external sounding device that is audible from at least ¼ mile. Circuit activation automatically causes the sounding device to activate. Police Station Alarm: System in which the local alarm with direct circuit or transmitting equipment is connected to constantly monitored equipment at a police station. Central Station Alarm: System in which the local alarm with direct circuit or transmitting equipment is connected to, recorded in, and supervised from a central station, with trained operators who upon receipt of a signal take required action. Automatic Sprinklers: System that has been both installed and maintained in accordance with nationally accepted standards, and that protects all areas of the residence, including attics, bathrooms, closets, and attached structures. Protected Peril Type of System Credit Factor Burglary Local Alarm -2% Burglary Police Station Alarm -3% Burglary Central Station Alarm -5% Fire Local Alarm -2% Fire Central Station Alarm -5% Fire Automatic Sprinklers -7% SI 3285 (11-07) Abridged THE SUTTER INSURANCE COMPANY Page 9 of 10

10 SURCHARGES INCREASED ACREAGE SURCHARGE (Use SI 023 (7/76) - General Change Endorsement) The Underwriting Guidelines allow for propertieslocated on 6-25 acres to be considered on a submit basis. In the event that the Underwriter determines that the risk is acceptable, the premium must be adjusted to indicate the increase in risk. This is done by applying the following Surcharge Factor to the Basic. Acreage Surcharge Factor 0-5 Included % % PROTECTION CLASSIFICATIONS The Sutter Insurance Company utilizes the Insurance Services Office, Inc. Mitigation Classifications for determining Protection Classifications. SI 3285 (11-07) Abridged THE SUTTER INSURANCE COMPANY Page 10 of 10