ALLEGANY CO-OP INSURANCE COMPANY DWELLING FIRE/CPL AND OLT 1-4 FAMILY DWELLINGS UNDERWRITING RULES AND GUIDELINES I. PROGRAM DESCRIPTION

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1 DWELLING FIRE/CPL AND OLT 1-4 FAMILY DWELLINGS UNDERWRITING RULES AND GUIDELINES I. PROGRAM DESCRIPTION Allegany Co-op s Dwelling Fire Program has been designed for maximum flexibility to allow placement of a wide range of home construction types, ages, home values and occupancies in the program. The program seeks to recognize these varied risk characteristics through both selection criteria and pricing mechanisms. It is of utmost importance that agents using this program carefully follow program eligibility rules and product pricing rules. Fully completed applications with current and clear photographs of the property are minimum requirements to receive consideration by our underwriters. II. APPLICATION FORMS In order to underwrite this market segment Allegany Co-op requires the use of fully completed ACORD Dwelling Fire application forms that incorporate both a basic rating and policy information section and a complete underwriting section. In addition Allegany Co-op requires a completed and signed State of New York Anti-Arson Application as a required supplement for this program. This customized application needs to be completed in full in all instances even in territories where regulation does not require the use of the New York Anti-Arson application at Company Request. Complete information allows Allegany s underwriting unit to handle this segment with minimal intervention. III. UNDERWRITING APPROACH Allegany s underwriting selection process applies basic C O P E underwriting criteria in assessing each risk. C O P E is a four part assessment process that evaluates each property based on the following merits: CONSTRUCTION--Construction type (frame, masonry veneer, masonry or other) is included in this analysis as well as an evaluation of the quality and integrity of the construction. This includes any updates of roof and roof coverings, wiring and electrical systems, plumbing and heating systems. The use of Allegany Co-op s Renovated Home Questionnaire (RHQ) can greatly assist in this analysis. OCCUPANCY Underwriters need to evaluate properties for the number of apartment or dwelling units as well as for the quality of the occupants as evidenced by both exterior and interior housekeeping around the property. Any unoccupied or vacant units or structures must be noted on the application for accurate rating and coverage grants. ED. 6/2014

2 PROTECTION The quality of each municipality s fire department is developed by insurance rating organizations. The protection classification shows the capability of each municipal fire department and the available water sources for fighting fires. Just as important is the internal protection provided for each property. Internal protection devices such as: 1. Smoke Detectors-including hard wired systems on multiple family units 2. Dead Bolt Door Locks 3. Alarm Systems 4. Carbon Monoxide Detectors 5. Adequate Fire Escapes on multi-story dwellings 6. Emergency Lighting in Hallways These devices are all important means for protecting dwelling properties and their inhabitants. EXPOSURES The proximity of vacant and uncontrolled commercial or residential buildings requires special underwriting care. Allegany Co-op does not write property where exposing properties are either vacant, or in poor condition. Such conditions raise the potential for exposure losses. The application forms should note the distance from the subject home and description of all exposing properties that are in either poor condition or are unoccupied. PROPERTIES REQUIRING PRIOR COMPANY UNDERWRITING APPROVAL BEFORE BINDING The following situations require full underwriting review before binding authority can be exercised. This review enables smooth business flows with a minimum of coverage or binding disputes. Without prior company approval the following types of property cannot be bound. 1. Dwellings that have been cancelled or non-renewed by another company or by Allegany Co-op during the past 5 years; 2. Dwellings that are vacant or are unoccupied at the time of binding or submission to the company; 3. Dwellings where the insured is known to have poor premium payment history; 4. Properties where there is any horse exposures or animal boarding on premises. For any property where there is the presence of large farm animals, special underwriting consideration must be given. The condition of fences, the proximity of animals to roadways, and the knowledge and experience of the owners in caring for and handling these animals are all important considerations. Our underwriters will need full disclosure about these animals. 5. Properties where there has been a lapse in coverage for any period of time. ED. 6/2014

3 6. Out of State Ownership & Foreign National Property Ownership (other than Canadian Owners)-Note such property is required to have a local qualified property manager/management Company overseeing and maintaining the property. Ownership including Individual ownership and Property Management information must be fully disclosed on the application along with a completed Anti Arson Application is required. PROPERTIES WITH UNACCEPTABLE EXPOSURES The following exposures are unacceptable to the company. The company underwriting staff will reject coverage for these exposures. 1. Vacant properties that do not have a plan for sale or future occupancy or in instances where no one is managing and regularly checking the property. 2. Homes with substandard maintenance The company makes a concerted effort to conduct inspections of all habitational properties when written as new business and also will conduct periodic follow-up inspections on renewals. Elements of substandard maintenance can be readily observed. Some of the common items indicating that a dwelling will not meet the company s underwriting standards are the following: a. Poor Housekeeping both in the exterior and the interior of the property. Evidence of trash and junk lying around the premises is cause for concern; b. The presence of any homemade wood burning stoves or furnaces or unapproved installation of solid fuel burning systems; c. Deteriorated Roof conditions Look for excessive build-up of moss, curled or missing shingles, extensive roof patching and general roof covering brittleness; d. Electrical System Problems Observe uncovered junction boxes, use of extension cords, temporary wiring, outdated and low amp electrical services that cannot handle modern electrical demands and wrapped electrical cables; e. Plumbing System Problems Watch for any signs of water damage to floors, ceilings and walls, presence of outdated plumbing fixtures or incomplete or inadequate plumbing repairs; f. Liability Hazards Lack of handrails, broken or rotted porch floors, torn carpeting, broken chimneys, raised sidewalks, unsecured antennas and inadequate rain gutters or gutter discharges on steps and walkways are all liability hazard concerns that need to be addressed; g. Wood burning appliances are not permitted in tenant occupied properties. h. Swimming Pools are not permitted on tenant occupied premises. ED. 6/2014

4 3. Homes with unfenced in-ground swimming pools New York State law requires all in-ground swimming pools be protected with adequate fences and self locking-self-closing gates. Regulation part 744 and (f) of the New York State Uniform Fire and Building Code requires a high degree of care on the part of in-ground pool owners. Allegany Co-op will not write tenant occupied risks with any pool exposure on premises. For owner occupied dwellings the company will insure only pools that meet the protection requirements of the regulation. Diving Board exposures are not permitted. 4. Dog Breed and Dog Disposition No homeowner will readily admit that their own dog may be a hazard, however a sizeable percentage of liability claims for dwellings are paid for dog bite claims. Any aggressive dogs whether owned by a property owner or a tenant must be noted on the application. Dog breed for any dogs must also be noted. The following breeds are known to be aggressive. a. Rottweiller b. Pit Bull c. Doberman d. Siberian Husky e. German Shepard f. Akita g. Chow Any dog can be aggressive and the training and discipline exercised by the owner is a factor as important as a breed of dog. Allegany Co-op inspectors are required to note on their reports of any aggressive behavior exhibited by dogs regardless of dog breed. The company reserves the right to decline or to non-renew policies where aggressive dogs have been reported. The company may require a signed dog exclusion that excludes any coverage for claims arising out of the ownership, care, or control of dogs around the dwelling if the underwriter makes any exception with regard to dog breeds and disposition. 5. Bankruptcy during the past 5 years Any bankruptcy filing by an insured within the past 5 years will make the account unacceptable. 6. Space heaters as any source of heat. 7. Student Housing of any kind. 8. Tenant occupied properties having any type of Solid fuel Burner. 9. Submissions where the application information is incomplete. IV. PROPERTY VALUATION AND MARKET VALUE CONSIDERATIONS Under Allegany s Dwelling Fire Program coverage is only offered on an ACTUAL CASH VALUE BASIS. Due to the fact that a majority of properties insured under this program will be older properties having a reduced or limited market value Allegany Coop will only insure Coverage A values of up to 1.5 times the current market value for ED. 6/2014

5 occupied properties and only at current market value for unoccupied or vacant properties otherwise qualifying for coverage. We will establish market value based on either current price paid plus any improvements for recently purchased properties or by valuing other substantially similar properties held for sale in the neighborhood area of the property being insured. Since the dwelling property form does not have a coinsurance provision, partial losses are settled based on a flat ACV loss settlement. Where additional living expense or Loss of Rents Coverage is desired, the Coverage A Dwelling Value should be increased by + 10% since this coverage is determined at either 10% of Coverage A or 20% of Coverage C and is included in the basic policy form. IV. AGENT S BINDING AUTHORITY FORM 1 BASIC PERILS Minimum Coverage A $ 15,000. Maximum Coverage A $ 200,000. FORM 2 BROAD PERILS Minimum Coverage A $ 25,000 Maximum Coverage A $ 225,000 LIABILITY COVERAGE Occupied Dwellings $300,000 Vacant or Unoccupied $100,000 V. RATING SEQUENCE 1. Classify residence by construction type, age, territory zone, and public protection available. 2. Consult rate table to obtain appropriate rate per thousand for coverage s A-D. 3. Apply any rate surcharges. 4. Apply deductible credit or debit to the rate per thousand to multiply to coverage amount to get a base premium. 5. Add premium for higher liability with medical payments. Examples: $4.50/k x $50,000 = $225 Base Premium $4.50/k x (5% deductible credit) = $4.27/k x $50,000 = $214 Base Premium Vacant Dwelling Example: $4.50 x $4.50 = $9.00 x (5% deductible credit) = $8.55/k x $50,000 = $428 Base Premium ED. 6/2014

6 Territorial Zones: Zone 1 All of state except Richmond, Queens, New York, Bronx, and Kings Kings Counties and Cities in Zone 2. Zone 2 All Listed: Albany Auburn Binghamton Buffalo Niagara Falls Rochester Schenectady Syracuse Troy Utica Suffolk County Eastern Nassau County ED. 6/2014

7 DWELLING FIRE/CPL AND OLT 1-4 FAMILY DWELLINGS UNDERWRITING RULES AND GUIDELINES I. PROGRAM DESCRIPTION Allegany Co-op s Dwelling Fire Program has been designed for maximum flexibility to allow placement of a wide range of home construction types, ages, home values and occupancies in the program. The program seeks to recognize these varied risk characteristics through both selection criteria and pricing mechanisms. It is of utmost importance that agents using this program carefully follow program eligibility rules and product pricing rules. Fully completed applications with current and clear photographs of the property are minimum requirements to receive consideration by our underwriters. II. APPLICATION FORMS In order to underwrite this market segment Allegany Co-op requires the use of fully completed ACORD Dwelling Fire application forms that incorporate both a basic rating and policy information section and a complete underwriting section. In addition Allegany Co-op requires a completed and signed State of New York Anti-Arson Application as a required supplement for this program. This customized application needs to be completed in full in all instances even in territories where regulation does not require the use of the New York Anti-Arson application. Complete information allows Allegany s underwriting unit to handle this segment with minimal intervention. III. UNDERWRITING APPROACH Allegany s underwriting selection process applies basic C O P E underwriting criteria in assessing each risk. C O P E is a four part assessment process that evaluates each property based on the following merits: CONSTRUCTION--Construction type (frame, masonry veneer, masonry or other) is included in this analysis as well as an evaluation of the quality and integrity of the construction. This includes any updates of roof and roof coverings, wiring and electrical systems, plumbing and heating systems. The use of Allegany Co-op s Renovated Home Questionnaire (RHQ) can greatly assist in this analysis. OCCUPANCY Underwriters need to evaluate properties for the number of apartment or dwelling units as well as for the quality of the occupants as evidenced by both exterior and interior housekeeping around the property. Any unoccupied or vacant units or structures must be noted on the application for accurate rating and coverage grants.

8 PROTECTION The quality of each municipality s fire department is developed by insurance rating organizations. The protection classification shows the capability of each municipal fire department and the available water sources for fighting fires. Just as important is the internal protection provided for each property. Internal protection devices such as: Smoke Detectors-including hard wired systems on multiple family units 2. Dead Bolt Door Locks 3. Alarm Systems 4. Carbon Monoxide Detectors 5. Adequate Fire Escapes on multi-story dwellings 6. Emergency Lighting in Hallways These devices are all important means for protecting dwelling properties and their inhabitants. EXPOSURES The proximity of vacant and uncontrolled commercial or residential buildings requires special underwriting care. Allegany Co-op does not write property where exposing properties are either vacant, or in poor condition. Such conditions raise the potential for exposure losses. The application forms should note the distance from the subject home and description of all exposing properties that are in either poor condition or are unoccupied. PROPERTIES REQUIRING PRIOR COMPANY UNDERWRITING APPROVAL BEFORE BINDING The following situations require full underwriting review before binding authority can be exercised. This review enables smooth business flows with a minimum of coverage or binding disputes. Without prior company approval the following types of property cannot be bound. 1. Dwellings that have been cancelled or non-renewed by another company or by Allegany Co-op during the past 5 years; 2. Dwellings that are vacant or are unoccupied at the time of binding or submission to the company; 3. Dwellings where the insured is known to have poor premium payment history; 4. Properties where there is any horse exposures or animal boarding on premises. For any property where there is the presence of large farm animals, special underwriting consideration must be given. The condition of fences, the proximity of animals to roadways, and the knowledge and experience of the owners in caring for and handling these animals are all important considerations. Our underwriters will need full disclosure about these animals.

9 PROPERTIES WITH UNACCEPTABLE EXPOSURES The following exposures are unacceptable to the company. The company underwriting staff will reject coverage for these exposures Vacant properties that do not have a plan for sale or future occupancy or in instances where no one is managing and regularly checking the property. 2. Homes with substandard maintenance The company makes a concerted effort to conduct inspections of all habitational properties when written as new business and also will conduct periodic follow-up inspections on renewals. Elements of substandard maintenance can be readily observed. Some of the common items indicating that a dwelling will not meet the company s underwriting standards are the following: a. Poor Housekeeping both in the exterior and the interior of the property. Evidence of trash and junk lying around the premises is cause for concern; b. The presence of any homemade wood burning stoves or furnaces or unapproved installation of solid fuel burning systems; c. Deteriorated Roof conditions Look for excessive build-up of moss, curled or missing shingles, extensive roof patching and general roof covering brittleness; d. Electrical System Problems Observe uncovered junction boxes, use of extension cords, temporary wiring, outdated and low amp electrical services that cannot handle modern electrical demands; e. Plumbing System Problems Watch for any signs of water damage to floors, ceilings and walls, presence of outdated plumbing fixtures or incomplete or inadequate plumbing repairs; f. Liability Hazards Lack of handrails, broken or rotted porch floors, torn carpeting, broken chimneys, raised sidewalks, unsecured antennas and inadequate rain gutters or gutter discharges on steps and walkways are all liability hazard concerns that need to be addressed; g. Wood burning appliances are not permitted in tenant occupied properties. h. Swimming Pools are not permitted on tenant occupied premises. 3. Homes with unfenced in-ground swimming pools New York State law requires all in-ground swimming pools be protected with adequate fences and self locking-self-closing gates. Regulation part 744 and (f) of the New

10 4. York State Uniform Fire and Building Code requires a high degree of care on the part of in-ground pool owners. Allegany Co-op will not write tenant occupied risks with any pool exposure on premises. For owner occupied dwellings the company will insure only pools that meet the protection requirements of the regulation. Diving Board exposures are not permitted. 4. Dog Breed and Dog Disposition No homeowner will readily admit that their own dog may be a hazard, however a sizeable percentage of liability claims for dwellings are paid for dog bite claims. Any aggressive dogs whether owned by a property owner or a tenant must be noted on the application. Dog breed for any dogs must also be noted. The following breeds are known to be aggressive. a. Rottweiller b. Pit Bull c. Doberman d. Siberian Husky e. German Shepard f. Akita g. Chow Any dog can be aggressive and the training and discipline exercised by the owner is a factor as important as a breed of dog. Allegany Co-op inspectors are required to note on their reports of any aggressive behavior exhibited by dogs regardless of dog breed. The company reserves the right to decline or to non-renew policies where aggressive dogs have been reported. The company may require a signed dog exclusion that excludes any coverage for claims arising out of the ownership, care, or control of dogs around the dwelling if the underwriter makes any exception with regard to dog breeds and disposition. 5. Bankruptcy during the past 5 years Any bankruptcy filing by an insured within the past 5 years will make the account unacceptable. 5. Submissions where the application information is incomplete. IV. PROPERTY VALUATION AND MARKET VALUE CONSIDERATIONS Under Allegany s Dwelling Fire Program coverage is only offered on an ACTUAL CASH VALUE BASIS. Due to the fact that a majority of properties insured under this program will be older properties having a reduced or limited market value Allegany Coop will only insure Coverage A values of up to 1.5 times the current market value for

11 5. occupied properties and only at current market value for unoccupied or vacant properties otherwise qualifying for coverage. We will establish market value based on either current price paid plus any improvements for recently purchased properties or by valuing other substantially similar properties held for sale in the neighborhood area of the property being insured. Since the dwelling property form does not have a coinsurance provision, partial losses are settled based on a flat ACV loss settlement. Where additional living expense or Loss of Rents Coverage is desired, the Coverage A Dwelling Value should be increased by + 10% since this coverage is determined at either 10% of Coverage A or 20% of Coverage C and is included in the basic policy form. IV. AGENT S BINDING AUTHORITY FORM 1 BASIC PERILS Minimum Coverage A $ 15,000. Maximum Coverage A $ 200,000. FORM 2 BROAD PERILS Minimum Coverage A $ 25,000 Maximum Coverage A $ 225,000 LIABILITY COVERAGE Occupied Dwellings $300,000 Vacant or Unoccupied $100,000 V. RATING SEQUENCE 1. Classify residence by construction type, age, territory zone, and public protection available. 2. Consult rate table to obtain appropriate rate per thousand for coverage s A-D. 3. Apply any rate surcharges. 4. Apply deductible credit or debit to the rate per thousand to multiply to coverage amount to get a base premium. 5. Add premium for higher liability with medical payments. Examples: $4.50/k x $50,000 = $225 Base Premium $4.50/k x (5% deductible credit) = $4.27/k x $50,000 = $214 Base Premium Vacant Dwelling Example: $4.50 x $4.50 = $9.00 x (5% deductible credit) = $8.55/k x $50,000 = $428 Base Premium

12 Territorial Zones: Zone 1 All of state except Richmond, Queens, New York, Bronx, and Kings Kings Counties and Cities in Zone 2. Zone 2 All Listed: Albany Auburn Binghamton Buffalo Niagara Falls Rochester Schenectady Syracuse Troy Utica Suffolk County Eastern Nassau County

13 2007 FIRE RATES RATES ARE SHOWN AT $500 DEDUCTIBLES. OTHER DEDUCTIBLES ARE AVAILABLE USING THE DEDUCTIBLE % TABLES RATES ARE PER $1000. OF COVERAGE AND APPLY TO COVERAGES A, B, C, & D NOTE: MINIMUM COVERAGE A FOR FL-1 PERILS IS $15,000. FL-1-NAMED PERILS--ZONE 1 MASONRY OR FRAME 1 & 2 FAMILY CONSTRUCTED SINCE 1940 HIGHLY PROTECTED $ 3.00 HIGHLY PROTECTED $ 4.50 PROTECTED 3.25 PROTECTED 4.95 SEMI-PROTECTED 4.10 SEMI-PROTECTED & 2 FAMILY CONSTRUCTED PRIOR TO 1940 HIGHLY PROTECTED $ 3.30 HIGHLY PROTECTED $ 5.00 PROTECTED 3.60 PROTECTED 5.45 SEMI-PROTECTED 4.50 SEMI-PROTECTED & 4 FAMILY CONSTRUCTED SINCE 1940 HIGHLY PROTECTED $ 3.70 HIGHLY PROTECTED $ 5.60 PROTECTED 4.05 PROTECTED 6.20 SEMI-PROTECTED 5.10 SEMI-PROTECTED & 4 FAMILY CONSTRUCTED PRIOR TO 1940 HIGHLY PROTECTED $ 4.15 HIGHLY PROTECTED $ 7.00 PROTECTED 4.45 PROTECTED 7.70 SEMI-PROTECTED 6.40 SEMI PROTECTED 9.60 WIND RATE--$.50 FOR ALL PROTECTION CLASSES OWNER OR TENANT ALL POLICIES ARE SUBJECT TO A MINIMUM EARNED OR RETAINED PREMIUM OF $100 ED. 6/01/2007

14 2007 FIRE RATES RATES ARE SHOWN AT $500 DEDUCTIBLES. OTHER DEDUCTIBLES ARE AVAILABLE USING THE DEDUCTIBLE % TABLES RATES ARE PER $1000. OF COVERAGE AND APPLY TO COVERAGES A, B, C, & D NOTE: MINIMUM COVERAGE A FOR FL-2 PERILS IS $25,000. FL-2-NAMED PERILS--ZONE 1 MASONRY OR FRAME 1 & 2 FAMILY CONSTRUCTED SINCE 1940 HIGHLY PROTECTED $ 4.35 HIGHLY PROTECTED $ 6.50 PROTECTED 4.70 PROTECTED 7.15 SEMI-PROTECTED 5.95 SEMI-PROTECTED & 2 FAMILY CONSTRUCTED PRIOR TO 1940 HIGHLY PROTECTED $ 4.80 HIGHLY PROTECTED $ 7.25 PROTECTED 5.20 PROTECTED 7.90 SEMI-PROTECTED 6.50 SEMI-PROTECTED & 4 FAMILY CONSTRUCTED SINCE 1940 HIGHLY PROTECTED $ 5.35 HIGHLY PROTECTED $ 8.10 PROTECTED 5.90 PROTECTED 9.00 SEMI-PROTECTED 7.40 SEMI-PROTECTED & 4 FAMILY CONSTRUCTED PRIOR TO 1940 HIGHLY PROTECTED $ 6.00 HIGHLY PROTECTED $ PROTECTED 6.45 PROTECTED SEMI-PROTECTED 9.30 SEMI PROTECTED WIND RATE-- $.50 FOR ALL PROTECTION CLASSES OWNER OR TENANT ALL POLICIES ARE SUBJECT TO A MINIMUM EARNED OR RETAINED PREMIUM OF $100 ED. 6/01/2007

15 2007 FIRE RATES RATES ARE SHOWN AT $500 DEDUCTIBLES. OTHER DEDUCTIBLES ARE AVAILABLE USING THE DEDUCTIBLE % TABLES RATES ARE PER $1000. OF COVERAGE AND APPLY TO COVERAGES A, B, C, & D NOTE: MINIMUM COVERAGE A FOR FL-1 PERILS IS $15,000. FL-1-NAMED PERILS--ZONE 2 MASONRY OR FRAME 1 & 2 FAMILY CONSTRUCTED SINCE 1940 HIGHLY PROTECTED $ 3.60 HIGHLY PROTECTED $ 5.40 PROTECTED 3.90 PROTECTED 5.95 SEMI-PROTECTED SEMI-PROTECTED & 2 FAMILY CONSTRUCTED PRIOR TO 1940 HIGHLY PROTECTED $ 4.00 HIGHLY PROTECTED $ 6.00 PROTECTED 4.30 PROTECTED 6.55 SEMI-PROTECTED SEMI-PROTECTED & 4 FAMILY CONSTRUCTED SINCE 1940 HIGHLY PROTECTED $ 4.45 HIGHLY PROTECTED $ 6.70 PROTECTED 4.90 PROTECTED 7.45 SEMI-PROTECTED SEMI-PROTECTED & 4 FAMILY CONSTRUCTED PRIOR TO 1940 HIGHLY PROTECTED $ 5.00 HIGHLY PROTECTED $ 8.40 PROTECTED 5.35 PROTECTED 9.25 SEMI-PROTECTED SEMI PROTECTED WIND RATE--$.50 FOR ALL PROTECTION CLASSES OWNER OR TENANT ALL POLICIES ARE SUBJECT TO A MINIMUM EARNED OR RETAINED PREMIUM OF $100 ED. 6/01/2007

16 2007 FIRE RATES RATES ARE SHOWN AT $500 DEDUCTIBLES. OTHER DEDUCTIBLES ARE AVAILABLE USING THE DEDUCTIBLE % TABLES RATES ARE PER $1000. OF COVERAGE AND APPLY TO COVERAGES A, B, C, & D NOTE: MINIMUM COVERAGE A FOR FL-2 PERILS IS $25,000. FL-2-NAMED PERILS--ZONE 2 MASONRY OR FRAME 1 & 2 FAMILY CONSTRUCTED SINCE 1940 HIGHLY PROTECTED $ 5.20 HIGHLY PROTECTED $ 7.85 PROTECTED 5.65 PROTECTED 8.65 SEMI-PROTECTED SEMI-PROTECTED & 2 FAMILY CONSTRUCTED PRIOR TO 1940 HIGHLY PROTECTED $ 5.80 HIGHLY PROTECTED $ 8.70 PROTECTED 6.25 PROTECTED 9.50 SEMI-PROTECTED SEMI-PROTECTED & 4 FAMILY CONSTRUCTED SINCE 1940 HIGHLY PROTECTED $ 6.45 HIGHLY PROTECTED $ 6.70 PROTECTED 7.10 PROTECTED SEMI-PROTECTED SEMI-PROTECTED & 4 FAMILY CONSTRUCTED PRIOR TO 1940 HIGHLY PROTECTED $ 7.25 HIGHLY PROTECTED $ PROTECTED 7.75 PROTECTED SEMI-PROTECTED SEMI PROTECTED WIND RATE--$.50 FOR ALL PROTECTION CLASSES OWNER OR TENANT ALL POLICIES ARE SUBJECT TO A MINIMUM EARNED OR RETAINED PREMIUM OF $100 ED. 6/01/2007

17 2007 FIRE RATE MANUAL DEDUCTIBLE PLAN: $ % RATE SURCHARGE % RATE SURCHARGE 500 STANDARD RATES % RATE CREDIT % RATE CREDIT SPECIAL RULES & RATES: MOBILE HOME RULE Add $ 1.70 to the applicable one family dwelling fire rate. MOBILE HOME WIND COVERAGE Use 1.70 per $1000 of Coverage A. SEASONAL DWELLINGS RATE:Minimum $1000 deductible FL-2 with Prior Approval $ 7.70 per $1000. Fire $ 1.00 per $1000. Wind $20.00per $1000 Theft Prior approval only VACANCY SURCHARGES: Partial Vacancy- 50% of Applicable Fire Rate. Vacancy- 100% of Applicable Fire Rate. CONTENTS IN STORAGE UNITS: FL-2 $6.00 per $1000. Fire-excludes theft coverage. FL-3 $8.00 per $1000. Fire-includes theft coverage under the FL-31BT. ALL POLICIES ARE SUBJECT TO A MINIMUM EARNED OR RETAINED PREMIUM OF $100 ED. 6/01/2007

18 2007 FIRE RATE MANUAL SPECIAL RULES & RATES CONTINUED BARN RATES: $9.00 per $1000. Fire $2.50 per $1000. Wind $6.00 per $1000. Collapse (on approved barns) Barns with Heat-add $2.00 to the fire rate. Barns with ML approved Lightning Rods- $8.00 per $1000. Fire Dairy Free Stall Barns, superior type, one story, continuous masonry foundation, no hay or straw, no heat, in excellent condition, enclosed on all four (4) sides: $5.00 per $1000. Fire $2.00 per $1000. Wind $4.50 per $1000. W/ML Rods $2.00 per $1000. Wind SILOS: Masonry/Minimum Coverage $5,000 $9.00 per $1000. Fire $9.00 per $1000. Wind Harvester/Minimum Coverage $5,000 $5.00 per $1000. Fire $2.00 per $1000. Wind LIVESTOCK: $3.00 per $1000. Fire $.50 Per $1000. Wind MOBILE MACHINERY: $4.00 per $1000. Fire $.60 per $1000. Wind CREDITS: Approved ML Rod- Smoke Detectors- Fire Extinguisher- Central Station Alarm- 5% Credit 2% Credit 2% Credit 10% Credit Credits apply to Fire rate only. 10% maximum allowed credit. ED. 6/01/2007

19 2007 FIRE RATE MANUAL TIER II PROGRAM This program is available for dwellings that would not normally be accepted by the company underwriter because there are certain unacceptable exposures present or there are conditions that would normally require prior underwriting approval. There is no agency binding authority granted for Tier II application submissions. The underwriter must give prior approval before binding. The following are conditions that will require Tier II submissions: 1. Policies where the insured has had a poor premium payment history and cancellation for non-payment of premiums. 2. Properties having some elements of poor housekeeping either on the exterior or in the interior of the dwelling. 3. Deteriorated roof and rain gutters where there is definite lack of ongoing maintenance present. 4. Prior insured loss experience at the insured location or at other locations owned by the insured entity. Loss experience in excess of two or more prior paid claims within the past five years will be placed in the Tier II program. Rates for Tier II are Standard Tier Fire rating for the policy plus 50% of each of the rates that make up the policy premium. Ed. 10/01/2007 ED. 6/01/2007

20 DWELLING FIRE CPL, FCPL, AND OLT RATES Below Premiums are Applicable to FL-1 and FL-2 Policies Only Zone 1 CPL/1 & 2 Family OLT/1 & 2 Family Liability Limit Premium Liability Limit Premium $25, $25, $50, $50, $100, $100, $200, $200, $300, $300, $500, $500, $1,000, $1,000, Each additional $500 medical add $3.00 OLT/3 Family Med Pay $1000/25000 OLT/4 Family Liability Limit Premium Liability Limit Premium $25, $25, $50, $50, $100, $100, $200, $200, $300, $300, $500, $500, $1,000, $1,000, Zone 2 CPL/1 & 2 Family OLT/1 & 2 Family Liability Limit Premium Liability Limit Premium $25, $25, $50, $50, $100, $100, $200, $200, $300, $300, $500, $500, $1,000, $1,000, Each additional $500 medical add $3.00 Med Pay $1000/25000 OLT/3 Family Med Pay $1000/25000 OLT/4 Family Med Pay $1000/25000 Liability Limit Premium Liability Limit Premium $25, $25, $50, $50, $100, $100, $200, $200, $300, $300, $500, $500, $1,000, $1,000, ED. 6/01/2007

21 DWELLING FIRE CPL, FCPL, AND OLT RATES FCPL Below Premiums are Applicable to FL-1 and FL-2 Policies Only Acres Acres Over 500 Acres Liability Limit Premium Liability Limit Premium Liability Limit Premium $25, $25, $25, $50, $50, $50, $100, $100, $100, $300, $300, $300, $500, $500, $500, Each additional $500 medical add $3.00 Add'l Farm Premises Farm Premises-Rented Liability Limit Premium Liability Limit Premium $25, $25, $50, $50, $100, $100, $300, $300, $500, $500, Each additional $500 Medical Add $1.00 Animal Collision: $15.00 Per Policy OLT/Farm Acres Med Pay $1000/ Acres Med Pay $1000/25000 Liability Limit Premium Liability Limit Premium $25, $25, $50, $50, $100, $100, $200, $200, $300, $300, $500, $500, $1,000, $1,000, Over 500 Acres Liability Limit Premium $25, $50, $100, $200, $300, $500, $1,000, ED. 6/01/2007