NEW MEXICO AGENT MANUAL AND UNDERWRITING GUIDE HALLMARK RENTERS PROGRAM

NEW MEXICO AGENT MANUAL AND UNDERWRITING GUIDE HALLMARK RENTERS PROGRAM NEW BUSINESS: 9/14/2015 RENEWALS: 9/14/2015 This Product and Underwriting Guide provides summary information about our insurance products, but does not supplement or modify the provisions of any insurance policy. In the event of a conflict between this product guide and any insurance policy, the provisions of the insurance policy will prevail. NM Renters Program. 2015 American Hallmark General Agency, Inc. All Rights Reserved.

REFERENCE INFORMATION AGENT REFERENCE INFORMATION Online Service Use it to: www.hplagent.com Quote and sell new policies Process policy changes and customer payments View and print policy documents, ID cards, and declarations pages Check the status of your customers claims Monitor your agency s production, loss reporting numbers, and quality measures Access your commission statement Order marketing supplies Phone Service (800) 486 5616 Use it to: Ask a Policy Service representative policy related questions Process policy changes and customer payments Order new agency marketing supplies Check the status of your customers claims Send us Trailing Documents Fax (800) 876 6960 Email Agency File Audits endorsements@hallmarkgrp.com Fax Line (469) 298 5740 Email agencyaudit@hallmarkgrp.com CUSTOMER REFERENCE INFORMATION Online Service Customers can use it to: Make payments Verify last payment received Check due date of next payment Check the status of a claim Print policy documents www.myhallmarkinsurance.com Phone Service (800) 486-5616 Customers can use it to: Make payments Verify last payment received Check due date of next payment Quote policy changes Check the status of a claim Send us Requested Documents Fax (800) 876 6960 Email Contact our Claims Department endorsements@hallmarkgrp.com Phone (800) 486 5616 Fax (469) 298 5750 ADDRESSES CLAIMS Correspondence Address Hallmark Personal Lines Overnight Delivery Address Hallmark Personal Lines P.O. Box 250209 6500 Pinecrest Dr., Ste. 100 Plano, TX 75025 Plano, TX 75024 Please have the insured report a claim promptly to us. The insured should call our claims service at (800) 486-5616. The agent could be responsible for any fines imposed by the state if they take first notice of the claim and fail to relay the information to the Company within 24 hours.

Rule 2.19 Service Fees 6 RULE SECTIONS AND SUBJECTS Rule 2.20 Minimum Premium 6 Rule 2.21 Uninsurable Risk Verification 6 1. Definitions 2 Rule 2.22 Instructions for use of Pro Rata Tables 6 Rule 1.01 Renters Policy 2 Rule 1.02 Personal Liability Policy 2 3. Eligibility Guidelines 8 Rule 1.03 Construction Type 2 Rule 3.01 Acceptable Policies 8 Rule 1.04 Supplemental Heating Device 2 Rule 3.02 Unacceptable Policies 8 Rule 1.05 Actual Cash Value Loss Settlement 2 Rule 3.03 Unacceptable Named Insured 8 Rule 1.06 Replacement Cost Loss Settlement2 2. General Rules 3 Rule 2.01 Rule 2.02 Rule 2.03 Rule 2.04 Rule 2.05 Rule 2.06 Rule 2.07 Rule 2.08 Rule 2.09 Rule 2.10 Rule 2.11 Rule 2.12 Rule 2.13 Rule 2.14 Rule 2.15 Rule 2.16 Rule 2.17 Rule 2.18 Underwriting Company 3 Binding Authority 3 Policy Period 3 Named Insureds 3 Additional Interest 3 Risk Location Rating 4 Named Insured Rating 4 Policy Rating 4 Program Discounts 4 Program Surcharges 5 Premium Rounding 5 Changes to Policy 5 Rate Stability with Rate Capping 5 Cancellation of Policy 5 Reinstatement of Policy 5 Rewrite of Policy 6 Renewals 6 Investigative Reports 6 4. Coverage Descriptions & Rules Property 9 Rule 4.01 Rule 4.02 Rule 4.03 Rule 4.04 Perils Insured Against 9 Personal Property Coverage 9 Loss of Use Coverage 9 Deductibles 9 5. Coverage Descriptions & Rules Liability 9 Rule 5.01 Rule 5.02 Personal Liability 9 Medical Payments to Others 9 6. Optional Coverages 10 Rule 6.01 Rule 6.02 Rule 6.03 Replacement Cost Loss Settlement Personal Property 10 Equipment Breakdown Enhancement Coverage 10 Identity Recovery Coverage 10 7. Trailing Documents 10

1. DEFINITIONS Rule 1.01 Renters Policy A Renters policy may be issued to the tenant(s) (non-owner) of a dwelling or an apartment situated in any building; provided the residence premises occupied by the insured is used exclusively for residential purposes. The policy provides coverage for personal property, loss of use, personal liability, and medical payments coverage. Coverage is provided under the HO 00 04 Contents Broad Form Rule 1.02 Personal Liability Policy A Personal Liability policy may be issued to the tenant(s) (non-owner) of a dwelling or an apartment situated in any building; provided the residence premises occupied by the insured is used exclusively for residential purposes. The policy provides coverage for personal liability and medical payments coverage. Coverage is provided under the DL 24 02 Personal Liability form. Rule 1.03 Construction Type Rule 1.03.01 Frame Frame construction constitutes a dwelling with walls of frame, metal-sheathed or stuccoed frame construction, or with walls of metal lathe and plaster on combustible supports. Frame construction rating applies when the wall area of frame construction exceeds 33% of the total wall area. Rule 1.03.02 Masonry Veneer A frame construction home over which is placed a layer of brick or other masonry material such as stone, concrete block, glass block, or tile. For the Masonry Veneer rating to apply, the exterior finishing material must exceed 67% of the total wall area. Rule 1.03.03 Masonry A dwelling constructed from individual units laid in and bound together by mortar to make solid walls. The common materials of masonry construction are brick, stone, concrete block, glass block, and tile. For the Masonry rating to apply, the exterior finishing material must exceed 67% of the total wall area. A dwelling with walls, floor, and roof constructed entirely of masonry or fire resistive material with Fire Resistance rating of not less than 1 hour will qualify for the Masonry rating. For dwellings consisting of both Masonry and Masonry Veneer construction, rate as Masonry Veneer if total exterior finishing material exceeds 67% of the wall area. Note: Hardboard siding, often referred to as brand name Masonite, will be rated as Frame. Cement fiber siding, often referred to as brand name Hardie Board, will be rated as Masonry Veneer. Rule 1.04 Supplemental Heating Device A Supplemental Heating Device is a permanently installed wood, coal, or pellet burning stove; space heater; fireplace insert; or any other solid fuel burning device that is not thermostatically controlled. This does not include standard wood or gas fireplaces. Rule 1.05 Actual Cash Value Loss Settlement Actual Cash Value Loss Settlement is the cost to replace with new property of like kind and quality material, less depreciation. Rule 1.06 Replacement Cost Loss Settlement Replacement Cost Loss Settlement is the cost to replace the property on the same premises with other property of comparable material and quality used for the same purpose. New Mexico 2nd Edition 2015.09 Page 2

No new business policies may be written or bound and no inforce policies 2. GENERAL RULES may be endorsed, during active wild fires, hail storms, tornadoes, hurricanes, or comparable severe weather. Rule 2.01 Underwriting Company Renewals of the company s expiring policies may be written in the normal This Renters Manual is applicable for all new and renewal risks underwritten by manner providing there is no increase in exposure to the company. American Hallmark Insurance Company of Texas (the Company). Normal binding authority will resume after the state of emergency or watch and/or warning is lifted by the National Weather Service, providing there is Rule 2.02 Binding Authority no forecast of an imminent re-occurrence. Rule 2.02.01 Agent s Obligation Applications with an effective date/postmark combination which violate the prohibitions listed above will be rejected and no coverage will have existed. It is the agent s obligation to field underwrite every risk submitted to the Company. All Agents are responsible for enforcing these temporary binding restrictions, questions on the application must be explained and the consequences of missing or whether the company issues a bulletin or the system is modified to prevent incorrect information outlined in detail. binding. Note: We may obtain underwriting reports on every risk. If any undisclosed losses are discovered, all applicable surcharges will be applied or discounts eliminated and the policy will be amended. A cancellation notice may be generated at the same time at our discretion. Rule 2.02.02 Binding and Effective Dates Producer must be properly appointed and issued a producer number prior to issuing any policies. Applications for coverage must be consistent with the written program guidelines and producer agreement. The down payment or full premium must accompany the application or endorsement. Applications and endorsements processed through the Point of Sale System ( POS ) will be bound effective the date and time assigned by the system. Applications will not be accepted with a future effective date exceeding sixty days from the current date. Applications or endorsements may not be bound to cover a loss, which occurred before the application is signed. No agent may back date an application, cancellation or change request for any reason. Back dating is defined as using any date other than the current date and time, or the date and time all binding requirements have been completed, whichever is later. No agent is authorized to issue verbal or written coverage binders. Rule 2.02.03 Document Retention It is the agents responsibility to secure required documentation upon binding and retain this information in the insured s file based on the retention obligations of your state. Any and all documentation must be made available upon company request. Rule 2.02.04 Agency Funds Agency payments (made through agency sweep or any other means) that are returned from the bank unpaid must be replaced immediately. Recurring instances of dishonored payments could result in immediate cancellation of the agency contract. Rule 2.02.05 Temporary Binding Restrictions Due to Severe Weather or State of Emergency When a State of Emergency is declared or the National Weather Service issues a hurricane, tornado, hail, or other severe weather watch or warning, and the storm is within 100 miles of the location of the proposed risk, coverage acceptance is limited as follows: Rule 2.03 Policy Period Rule 2.03.01 Annual Program A policy may be written for a period of 12 months and subsequent policy periods will renew for a period of 12 months. Rule 2.04 Named Insureds A policy is permitted to have one or two Named Insureds. Co-applicants must be married to be listed as the second Named Insured. Other relationship statuses are not permitted. (i) Marital Status Only insureds who are legally married or deemed married by state law will be classified as married. Insureds that are single, windowed, legally separated, divorced, or in a relationship that is not recognized by the state will be classified as single. Rule 2.05 Additional Interest A policy is permitted to have one Additional Interest listed. Such person or organization is entitled to receive notification if the policy is cancelled or nonrenewed. A listed Additional Interest is not entitled to potential benefits provided by the policy, nor do they have authority to make changes on the policy. No additional charge is made for use of this endorsement. New Mexico 2nd Edition 2015.09 Page 3

2) Serious illness or injury, or serious illness or injury to an immediate Rule 2.06 Risk Location Rating family member; 3) Death of a spouse, child, or parent; Rule 2.06.01 Rating Territory 4) Divorce or involuntary interruption of legally owed alimony or support payments; The rated territory is determined according to the physical address zip code in which 5) Identity theft or fraud; the rented unit is located. If an insured moves, the location will be updated and the 6) Temporary loss of employment for a period of three (3) months or policy will be re-rated to reflect the change in exposure. more, if it results from involuntary termination; 7) Military deployment overseas; or 8) Other events, as determined by the company The Rate Manual displays the territory definitions and territory factors. (i) Each territory includes a specific area of the state which, in total, encompasses the entire state. Therefore, the following provision applies: 1) For any physical address zip code not explicitly defined within a territory, determine the county based on the physical address. Use the Rest of County definition to determine territory. Rule 2.06.02 Public Protection Classification The Public Protection Classification (PPC) is determined according to the physical address of the rented unit. Refer to ISO's Community Mitigation Classifications (CMC) Manual to determine the appropriate PPC. Rule 2.06.03 Construction Type The construction type of the dwelling is used to determine an appropriate rate for the policy. Masonry Veneer and Masonry construction types qualify as a discount. Rule 2.07 Named Insured Rating Rule 2.07.01 Age of Insured The Named Insured s age attained as of the effective date of the policy is used to determine an appropriate rate for the policy. Policies will not be re-rated mid-term to change the age classification. Rule 2.07.02 Financial Responsibility Report A financial responsibility report will be ordered for the first Named Insured for all new business. The Insurance Score returned by this report is used, in combination with other rating components, to determine the total policy premium. The Company, upon request of an insured at the time of a policy's anniversary date, will re-tier and re-rate the insured's policy based upon a current Insurance Score. The rating tier may stay the same, deteriorate, or improve based on the re-ordered report. Include full name, address, date of birth, and the Social Security number to avoid inaccurate or unavailable financial responsibility information. A customer may refuse to provide their Social Security number, but in this case, we may not be able to confirm financial responsibility. Hallmark Personal Lines will not decline to issue, cancel, non-renew, or otherwise terminate property and casualty insurance covering personal risks solely because of: (i) Credit history; (i) Lack of credit history; or (ii) The following extraordinary life circumstances that directly influence the credit history of the applicant or insured: 1) Catastrophic event, as declared by the federal or state government; Rule 2.08 Policy Rating Rule 2.08.01 Amount of Insurance The amount of insurance selected by the Named Insured is used to determine an appropriate rate for the policy. Selecting limits greater than the minimum will increase the policy premium. Rule 2.08.02 Deductible The deductible amount selected by the Named Insured is used to determine an appropriate rate for this policy. Selecting a deductible greater than the minimum will decrease the policy premium. The deductible applies only to Section I coverages. A deductible is not selected for the Personal Liability policy. Rule 2.08.03 Personal Property Replacement Cost The policy provides loss settlement on an Actual Cash Value basis for certain types of property. The policy may be endorsed to provide loss settlement on a Replacement Cost basis for such property. Selecting this endorsement will increase the policy premium. This endorsement is not available for the Personal Liability Policy. Rule 2.09 Program Discounts Rule 2.09.01 Multi-Policy The multi-policy discount applies if the named insured has a PPA and HO4 policy insured with Hallmark. Multiple HO4 policies in the same household will not qualify. Rule 2.09.02 Advanced Quote The policy is eligible for the Advanced Quote Discount (AQD) if the application is bound and required premium is paid seven (7) or more days in advance of the policy effective date. New Mexico 2nd Edition 2015.09 Page 4

Rule 2.09.03 Protective Device Discount (ii) A policy will not be changed mid-term because of a change in prior loss history. (i) Central Station Reporting Fire Alarm All endorsements that generate an additional premium must be paid pursuant to the The fire alarm system must be properly maintained and centrally monitored calculation of premium due as generated by the policy system. Examples may include by a service (e.g. ADT) to receive the Protective Device discount. but not limited to: adding or changing coverage or territory address change. For date (ii) Central Station Reporting Burglar Alarm and time bound, please refer to Rule 2.02. To process endorsement requests submitted through the mail, we require: The burglar alarm system must be properly maintained and centrally monitored by a service (e.g. ADT) to receive the Protective Device discount. (i) Agent number and name of representative handling request for change (ii) Policy number, effective date, and requested change with all required Rule 2.10 Program Surcharges information Rule 2.10.01 Claims History (iii) Additional premium, if adding coverage The Named Insured s prior claims history is used to determine eligibility and set an appropriate rate for the policy. Claims history will be reviewed for chargeable losses in the most recent 5 years. (i) For new policies, the experience period begins on the effective date of the policy (ii) For renewal policies, the experience period will begin 30 days prior to the policy renewal effective date. Claims occurring within the 30 days window will be considered at the next renewal. A chargeable loss is a closed, paid claim incurred by the applicant; (i) Not including losses paid under a prior policy excluded by current Hallmark policy (e.g. equipment breakdown, water backup), and (ii) Not including Closed Without Payment (CWP) claims, and (iii) Not including Weather losses incurred at a prior residence Weather includes: Lightning, Windstorm, Hail, Earthquake, Landslide, Weight of Ice or Snow. Rule 2.10.02 Heating System Dwellings with a supplemental heat unit are subject to a surcharge. A dwelling without a thermostatically controlled central heating system is ineligible. Rule 2.11 Premium Rounding The premium for each policy will be rounded to the nearest whole dollar. A premium involving $.50 or more will be rounded to the next higher whole dollar. This procedure will apply to all interim premium adjustments, including endorsements or cancellations at the request of the insured. In the case of cancellation by the company, the return premium may be carried to the next higher whole dollar. Rule 2.12 Changes to Policy All changes requiring premium adjustments will be computed pro rata, with the following exceptions: (i) A policy will not be changed mid-term because of the attained age of the named insured. Signed endorsement requests are required for the following: (i) Insured requested cancellations Note: Any change request originating from the agent of record to reduce or delete coverage submitted to the Company will be processed with the understanding and presumption the agency has obtained and will retain the required signature in the agency file. Rule 2.13 Rate Stability with Rate Capping To increase customer satisfaction, we cap significant premium changes on renewal policies that are due to change in our rating structure. This process will take place at every renewal. Rule 2.14 Cancellation of Policy If a policy or form of coverage is canceled by the company or insured, compute return premium pro rata. Cancellations are effective no earlier than the date and time the cancellation request signed by the named insured is received, unless acceptable proof of replacement coverage is provided. Flat Cancellations will not be approved unless: (i) (ii) Rule 2.15 The Company is relieved of the obligation to provide coverage to the Insured and Lienholder (if applicable) by showing proof of replacement coverage. The insured s down payment is returned to the company or agent due to insufficient funds. Reinstatement of Policy Policies in cancel pending status due to missed payments will be reinstated if payment is received prior to the cancel date. Payment must include late payment fee if received after the due date. Policies cancelling for non-payment may be eligible for reinstatement within 30 days of the cancellation effective date. Reinstatements without a lapse in coverage require full payment including any applicable late fee and a signed Statement of No Loss. Policies reinstating with or without a coverage lapse require full payment including any applicable late fee. New Mexico 2nd Edition 2015.09 Page 5

For payments received after the cancel date, see Rule 2.16 Rewrite. The NSF fee is fully earned per occurrence. The fee applies to any payment returned Rule 2.16 Rewrite of Policy by the bank for non-sufficient funds. Policies cancelling for non-payment may be rewritten within 60 days of the date of Rule 2.20 Minimum Premium cancellation. If all policy characteristics remain the same compared to the cancelled Policies are subject to a minimum policy premium during the policy period to cover policy, simply bring up the cancelled policy in our policy system and click the Process the cost of fixed expenses and expected losses. Rewrite button. When rewriting a policy, please ensure all eligible coverages transfer to the new policy. All outstanding balances on cancelled policies must be paid before Rule 2.21 Uninsurable Risk Verification the insured is rewritten. The rewrite policy will be written as a full policy period. Rule 2.17 Renewals Renewal offers are mailed directly to the insured approximately 30 days prior to the renewal payment due date. If payment is not received by the due date, the renewal offer will expire. If payment is received within 30 days of the renewal offer expiring, a renewal will generate with a lapse in coverage. For mailed payments, the renewal effective date will be the payment postmark date plus one day at 12:01 AM. For payments posted in the policy system, the renewal effective date will be the payment date and time. Rule 2.18 Investigative Reports Rule 2.18.01 Loss History A loss history report may be ordered for named insured(s) at new business. Chargeable losses not currently accounted for in rating will be included. Any chargeable losses incurred during any policy period with the Company will be accounted for in future renewals. Rule 2.18.02 Financial Responsibility Report A financial responsibility report will be ordered for the first Named Insured for all new business. The Insurance Score returned by this report is used, in combination with other rating components, to determine the total policy premium. Rule 2.19 Service Fees Policies may be subject to the following service fees during the policy period. See the Rate Manual for applicable charges. Rule 2.19.01 Policy Fee The policy fee is earned as billed during the policy period. The fee applies to all policy periods. Rule 2.19.02 Installment Fee The installment fee is fully earned per occurrence. The fee applies to all payments that cover only a portion of the total policy premium. The fee may vary by payment method. Rule 2.19.03 Late Payment Fee The late payment fee is fully earned per occurrence. The fee applies to any payment received after the payment due date. Rule 2.19.04 Non-Sufficient Funds (NSF) Fee The Company will verify whether your customer has ever been cancelled or not renewed by us due to: misrepresentation, misrepresentation on a claim, fraud or misrepresentation on an application, fraud on a claim, lack of cooperation in a fraud investigation, or record of an unauthorized or counterfeit payment. If the Company determines an applicant is an uninsurable risk, the quoting system will inform you and you must tell the customer. You will not be able to complete the quote. Rule 2.22 Instructions for use of Pro Rata Tables Express the date of cancellation by year and decimal part of a year by combining the calendar year with the decimal appearing opposite the month and day in the Pro Rata Table, e.g. March 7, 2014 is designated as 2014.181. New Mexico 2nd Edition 2015.09 Page 6 (i) (ii) (iii) In like manner, express the effective date of the policy by year and decimal part of a year and subtract from the cancellation date. The difference in the case of 1 year policies represents the percentage of the annual premium which is to be retained by the company. Example: Cancellation date: May 19, 2014 2014.381 Effective date: March 2, 2014-2014.167 0.214 1) Earned premium for a 1 Year Term Policy will therefore be 0.214 times the annual premium. 2) Note: As it is not customary to charge for the extra day (February 29th) which occurs one year in every four years this table will also be used for each such year.

Pro Rata Tables January February March April May June 1 1 0.003 1 32 0.088 1 60 0.164 1 91 0.249 1 121 0.332 1 152 0.416 2 2 0.005 2 33 0.090 2 61 0.167 2 92 0.252 2 122 0.334 2 153 0.419 3 3 0.008 3 34 0.093 3 62 0.170 3 93 0.255 3 123 0.337 3 154 0.422 4 4 0.011 4 35 0.096 4 63 0.173 4 94 0.258 4 124 0.340 4 155 0.425 5 5 0.014 5 36 0.099 5 64 0.175 5 95 0.260 5 125 0.342 5 156 0.427 6 6 0.016 6 37 0.101 6 65 0.178 6 96 0.263 6 126 0.345 6 157 0.430 7 7 0.019 7 38 0.104 7 66 0.181 7 97 0.266 7 127 0.348 7 158 0.433 8 8 0.022 8 39 0.107 8 67 0.184 8 98 0.268 8 128 0.351 8 159 0.436 9 9 0.025 9 40 0.110 9 68 0.186 9 99 0.271 9 129 0.353 9 160 0.438 10 10 0.027 10 41 0.112 10 69 0.189 10 100 0.274 10 130 0.356 10 161 0.441 11 11 0.030 11 42 0.115 11 70 0.192 11 101 0.277 11 131 0.359 11 162 0.444 12 12 0.033 12 43 0.118 12 71 0.195 12 102 0.279 12 132 0.362 12 163 0.447 13 13 0.036 13 44 0.121 13 72 0.197 13 103 0.282 13 133 0.364 13 164 0.449 14 14 0.038 14 45 0.123 14 73 0.200 14 104 0.285 14 134 0.367 14 165 0.452 15 15 0.041 15 46 0.126 15 74 0.203 15 105 0.288 15 135 0.370 15 166 0.455 16 16 0.044 16 47 0.129 16 75 0.205 16 106 0.290 16 136 0.373 16 167 0.458 17 17 0.047 17 48 0.132 17 76 0.208 17 107 0.293 17 137 0.375 17 168 0.460 18 18 0.049 18 49 0.134 18 77 0.211 18 108 0.296 18 138 0.378 18 169 0.463 19 19 0.052 19 50 0.137 19 78 0.214 19 109 0.299 19 139 0.381 19 170 0.466 20 20 0.055 20 51 0.140 20 79 0.216 20 110 0.301 20 140 0.384 20 171 0.468 21 21 0.058 21 52 0.142 21 80 0.219 21 111 0.304 21 141 0.386 21 172 0.471 22 22 0.060 22 53 0.145 22 81 0.222 22 112 0.307 22 142 0.389 22 173 0.474 23 23 0.063 23 54 0.148 23 82 0.225 23 113 0.310 23 143 0.392 23 174 0.477 24 24 0.066 24 55 0.151 24 83 0.227 24 114 0.312 24 144 0.395 24 175 0.479 25 25 0.068 25 56 0.153 25 84 0.230 25 115 0.315 25 145 0.397 25 176 0.482 26 26 0.071 26 57 0.156 26 85 0.233 26 116 0.318 26 146 0.400 26 177 0.485 27 27 0.074 27 58 0.159 27 86 0.236 27 117 0.321 27 147 0.403 27 178 0.488 28 28 0.077 28 59 0.162 28 87 0.238 28 118 0.323 28 148 0.405 28 179 0.490 29 29 0.079 29 88 0.241 29 119 0.326 29 149 0.408 29 180 0.493 30 30 0.082 30 89 0.244 30 120 0.329 30 150 0.411 30 181 0.496 31 31 0.085 31 90 0.247 31 151 0.414 Pro Rata Tables July August September October November December Ratio Day of Year Ratio 1 182 0.499 1 213 0.584 1 244 0.668 1 274 0.751 1 305 0.836 1 335 0.918 2 183 0.501 2 214 0.586 2 245 0.671 2 275 0.753 2 306 0.838 2 336 0.921 3 184 0.504 3 215 0.589 3 246 0.674 3 276 0.756 3 307 0.841 3 337 0.923 4 185 0.507 4 216 0.592 4 247 0.677 4 277 0.759 4 308 0.844 4 338 0.926 5 186 0.510 5 217 0.595 5 248 0.679 5 278 0.762 5 309 0.847 5 339 0.929 6 187 0.512 6 218 0.597 6 249 0.682 6 279 0.764 6 310 0.849 6 340 0.932 7 188 0.515 7 219 0.600 7 250 0.685 7 280 0.767 7 311 0.852 7 341 0.934 8 189 0.518 8 220 0.603 8 251 0.688 8 281 0.770 8 312 0.855 8 342 0.937 9 190 0.521 9 221 0.605 9 252 0.690 9 282 0.773 9 313 0.858 9 343 0.940 10 191 0.523 10 222 0.608 10 253 0.693 10 283 0.775 10 314 0.860 10 344 0.942 11 192 0.526 11 223 0.611 11 254 0.696 11 284 0.778 11 315 0.863 11 345 0.945 12 193 0.529 12 224 0.614 12 255 0.699 12 285 0.781 12 316 0.866 12 346 0.948 13 194 0.532 13 225 0.616 13 256 0.701 13 286 0.784 13 317 0.868 13 347 0.951 14 195 0.534 14 226 0.619 14 257 0.704 14 287 0.786 14 318 0.871 14 348 0.953 15 196 0.537 15 227 0.622 15 258 0.707 15 288 0.789 15 319 0.874 15 349 0.956 16 197 0.540 16 228 0.625 16 259 0.710 16 289 0.792 16 320 0.877 16 350 0.959 17 198 0.542 17 229 0.627 17 260 0.712 17 290 0.795 17 321 0.879 17 351 0.962 18 199 0.545 18 230 0.630 18 261 0.715 18 291 0.797 18 322 0.882 18 352 0.964 19 200 0.548 19 231 0.633 19 262 0.718 19 292 0.800 19 323 0.885 19 353 0.967 20 201 0.551 20 232 0.636 20 263 0.721 20 293 0.803 20 324 0.888 20 354 0.970 21 202 0.553 21 233 0.638 21 264 0.723 21 294 0.805 21 325 0.890 21 355 0.973 22 203 0.556 22 234 0.641 22 265 0.726 22 295 0.808 22 326 0.893 22 356 0.975 23 204 0.559 23 235 0.644 23 266 0.729 23 296 0.811 23 327 0.896 23 357 0.978 24 205 0.562 24 236 0.647 24 267 0.732 24 297 0.814 24 328 0.899 24 358 0.981 25 206 0.564 25 237 0.649 25 268 0.734 25 298 0.816 25 329 0.901 25 359 0.984 26 207 0.567 26 238 0.652 26 269 0.737 26 299 0.819 26 330 0.904 26 360 0.986 27 208 0.570 27 239 0.655 27 270 0.740 27 300 0.822 27 331 0.907 27 361 0.989 28 209 0.573 28 240 0.658 28 271 0.742 28 301 0.825 28 332 0.910 28 362 0.992 29 210 0.575 29 241 0.660 29 272 0.745 29 302 0.827 29 333 0.912 29 363 0.995 30 211 0.578 30 242 0.663 30 273 0.748 30 303 0.830 30 334 0.915 30 364 0.997 31 212 0.581 31 243 0.666 31 304 0.833 31 365 1.000 New Mexico 2nd Edition 2015.09 Page 7

The animal liability exclusion must be applied to the policy when an animal with a bite history exists to be acceptable. 3. ELIGIBILITY GUIDELINES Rule 3.01 Acceptable Policies Rule 3.01.01 Occupancy A Renters Broad Form Policy or Renters Personal Liability Policy may be issued to the tenant(s) (non-owner) of a dwelling or apartment situated in any building, provided the residence premises is used exclusively for residential purposes. Rule 3.01.02 Policy Types The Renters Broad Form policy affords Property and Liability coverage. The Renters Personal Liability Policy affords Liability coverage only. Rule 3.02 Unacceptable Policies Rule 3.02.01 Unacceptable Prior Loss History Any policy with 5 or more losses in the past 5 years is ineligible. Any policy with more than 1 fire loss in the past 5 years is ineligible. Any policy with more than 1 liability loss in the past 5 years is ineligible. All repairs must be complete from a prior loss to be acceptable. Rule 3.02.02 Unacceptable Risk Characteristics Any applicant currently unemployed, other than retired, disabled, or a full-time student, is ineligible. Any applicant under the age of 18 at the time of application is ineligible. Any applicant with a past felony conviction or conviction for arson, fraud, or other insurance-related offense is ineligible. Any residence with business exposure on the premises, including home daycare (does not include unpaid babysitting of relatives). Any residence with no centralized heating is ineligible. Rule 3.03 Unacceptable Named Insured Named Insureds who move out of state during the policy period are ineligible. A Named Insured refusing to disclose information requested on the application is ineligible for coverage. A Named Insured failing to respond to a request for information is ineligible for coverage. New Mexico 2nd Edition 2015.09 Page 8

4. COVERAGE DESCRIPTIONS & RULES PROPERTY Rule 4.01 Perils Insured Against The following is a general description of the coverages provided by the Renters Broad Form policy. The policy should be consulted for exact contract language. Perils Insured Against: Fire or Lightning; Windstorm or Hail; Explosion; Riot or civil commotion; Aircraft; Vehicles; Smoke; Vandalism or malicious mischief; Theft; Volcanic eruption; Falling objects, Weight of ice, snow or sleet; Accidental discharge or overflow of water or steam; Sudden and accidental tearing apart of a heating system or appliance for heating water; Freezing; and Sudden and accidental damage from artificially generated electrical current. Rule 4.02 Personal Property Coverage All Renters Broad Form policies must have a personal property limit of at least $5,000. Rule 4.03 Available Limits $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 No Coverage No Coverage is applicable for the Renters Personal Liability Policy Form only. Loss of Use Coverage Loss of Use is included in the base rate. Limit of Liability is always 20% of the selected Personal Property coverage limit. Rule 4.04 Deductibles All Renters Broad Form policies are subject to a minimum deductible of $500 that applies to loss from all Section I Perils, except Refrigerated Property. A separate deductible provision applies to Refrigerated Property as described in the Refrigerated Property Coverage amendatory endorsement. Deductible per Occurrence $500 $1,000 Increased deductibles result in a lower premium. 5. COVERAGE DESCRIPTIONS & RULES LIABILITY Rule 5.01 Personal Liability Covers payment on behalf of any insured for all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage arising out of an insured s premises or personal activities. All policy types must have a minimum limit of at least $25,000. Available Limits $25,000 $50,000 $100,000 Liability exposure from animals is limited to $25,000. If the insured has an animal with a bite history in their care and custody, Liability exposure will be excluded. The Animal Liability Exclusion will be applied to risks with unusual, exotic, vicious, or potentially vicious animals, regardless of bite history. Liability exposure from trampolines is excluded. Rule 5.02 Medical Payments to Others Covers medical expenses incurred by persons, other than the insured, who sustain bodily injury caused by an accident arising out of an insured's premises or personal activities. All policy types must have a minimum limit of at least $500. Available Limits $500 $1,000 $2,000 $3,000 $4,000 $5,000 Liability exposure from trampolines is excluded. New Mexico 2nd Edition 2015.09 Page 9

6. OPTIONAL COVERAGES Rule 6.01 Replacement Cost Loss Settlement Personal Property The policy provides loss settlement on an Actual Cash Value basis for certain types of property. For increased premium, the policy may be endorsed to provide loss settlement on a Replacement Cost basis for such Property. Available options contingent upon selecting Renters Broad Form. Rule 6.02 Equipment Breakdown Enhancement Coverage The following is a general description of the coverages provided by the Equipment Breakdown Enhancement Coverage. The endorsement should be consulted for exact contract language For increased premium, the policy may be endorsed to provide coverage for direct physical loss or damage to all mechanical, electrical, electronic, or fiber optic equipment caused by, or resulting from, mechanical breakdown; electrical or electronic breakdown; or rupture, bursting, bulging, implosion, or steam explosion. Coverage is subject to a $50,000 per occurrence limit and a $500 per occurrence deductible. Rule 6.03 Identity Recovery Coverage The following is a general description of the coverages provided by the Identity Recovery Coverage. The policy should be consulted for exact contract language For increased premium, the policy may be endorsed to provide coverage for recovery from the fraudulent use of the personal identity of an insured to establish credit accounts, secure loans, enter into contracts or commit crimes. Coverage includes services of an ID Recovery Case Manager and reimbursement of actual ID theft costs incurred up to $15,000. A $250 deductible applies to the incurred costs coverage. 7. TRAILING DOCUMENTS It is the agents responsibility to secure required documentation upon binding and retain this information in the insured s file based on the retention obligations in your state. Any and all documentation must be made available upon company request. For certain policies, it is imperative to maintain proof of qualification for certain rating components. The policy system will prompt you to retain trailing documents. The chart below designates what proof should be agent retained and what proof requires submission to the Company. Trailing Document Required Documentation Where to send Information Application A signed and dated application by the named insured and agent of record. Three (3) methods of obtaining the required signatures: 1. The application has been signed electronically in the policy system; or 1. Automatically attached to policy 2. The application has been signed electronically outside of the policy system; or 2. Agent Retained and/or 3. The application has been printed and signed by hand attached to policy electronically 3. Agent Retained and/or attached to policy Protective Device Proof of service must be updated annually. A copy of the most recent service invoice is sufficient. Agent Retained and/or attached to policy electronically Recurring Payment Authorization Form A signed and dated authorization form is required if the Named Insured modifies their method of payment to Recurring Payment at any time, other than new business submission. At new business, the application includes the required documentation. Agent Retained and/or attached to policy electronically New Mexico 2nd Edition 2015.09 Page 10