© ISO Properties, Inc01 25 (see Rule 14. in these state exceptions) in place of the policy's Sinkhole Collapse coverage. Catastrophic Ground Cover Collapse provides coverage for direct

Commercial Property/Fire ISO Rules

© ISO Properties, Inc ADDITIONAL RULE(S) A1. EXCLUSION OF CERTAIN COMPUTER-RELATED LOSSES Attach Exclusion Of Certain Computer-Related Losses Endorsement IL 09 35 to all policies. This endorsement specifies that certain risks associated with computer or other electronic equipment failure, malfunction, inadequacy or inability to correctly recognize, process, distinguish, interpret or accept one or more dates or times are excluded from coverage. A2. COVERAGE FOR YEAR 2000 COMPUTER-RELATED AND OTHER ELECTRONIC PROBLEMS 1. Description Of Coverage The Business Income And/Or Extra Expense Coverage For Year 2000 Computer-Related And Other Electronic Problems Endorsement CP 15 57 provides a method for writing coverage for loss of Business Income and/or Extra Expense caused by computer-related or other electronic problems due to the year 2000 and beyond. Such coverage has an annual aggregate limit of $25,000 in any one policy year, regardless of the number of computers or the number of instances involving computer failure. 2. Form Use Business Income And/Or Extra Expense Coverage For Year 2000 Computer-Related And Other Electronic Problems Endorsement CP 15 57. 3. Applicability Endorsement CP 15 57 may only be used with: a. Business Income (And Extra Expense) Coverage Form CP 00 30. b. Business Income (Without Extra Expense) Coverage Form CP 00 32. c. Extra Expenses Coverage Form CP 00 50. 4. Rates Refer to company. A3. OIL RISKS - PETROLEUM PROPERTIES A. Explanation Refer to ISO for rules and loss costs pertaining to this coverage. B. Term One Year.

A4. BUILDING CODE EFFECTIVENESS GRADING

A. General Information

1. The Building Code Effectiveness Grading Schedule develops grades of 1 to 10 for a community based on the adequacy of its building code and the effectiveness of its enforcement of that code. Policies which cover the Windstorm or Hail or Earthquake causes of loss may be eligible for special rating treatment, subject to the criteria in the following paragraphs. The Building Code Effectiveness Grading factor applies, where applicable, in addition to the Public Protection Classification factors.

2. In some communities, two Building Code Effectiveness Grades may be assigned. One grade will apply to 1 and 2 family dwellings; the other grade will apply to all other buildings. The Community Mitigation Classification Manual will indicate the application of each grade. This separation applies even if the residential property is written under a Commercial Property policy. The rate modification factors in Paragraph E. of this Additional Rule apply to the numerical grade shown, regardless of whether the property is graded as residential or commercial.

3. The Building Code Effectiveness Grades for a community, and their effective date, are provided in the Community Mitigation Classification Manual published by Insurance Services Office, Inc.

B. Community Grading

1. The Building Code Effectiveness Grading applies to any building that has an original certificate of occupancy dated in the year of the effective date of the community grading, or later. A rating factor has been developed for each community grade.

2. If a community is regraded subsequent to its initial grading, the factor for the revised grade applies to buildings that have an original certificate of occupancy dated the year of the effective date of the revised grading, or later.

3. Where certificates of occupancy are not issued, equivalent documentation acceptable to the company may be used.

4. If, due to an addition or alteration, the original building is changed to comply with the latest building code, the factor for the community grading applicable at the time the reconstruction is completed will apply to such building.

5. The Building Code Effectiveness Grade may apply to Windstorm/Hail or Earthquake, or to both. Specific information is provided in the Community Mitigation Classification Manual. If the grade in the Manual does not apply to one of the causes of loss, the factor should not be applied for that cause of loss.

6. Communities that decline to participate in the Building Code Effectiveness Grading Program will be identified in the Community Mitigation Classification Manual as not participating. Buildings in these communities will receive a premium surcharge, unless they qualify for individual grading under Paragraph C. This surcharge will apply to any building that has an original certificate of occupancy dated in the year of the effective date of the community evaluation that identifies the community as not participating.

C. Individual Grading

Where buildings have been built in full conformance with the natural hazard mitigation elements of one of the nationally recognized building codes even though the community grade is less than 1, or the community is not participating in the program, exception rating procedures may apply.

1. Any building may be classified as Grade 1 for Windstorm/Hail upon certification by a registered or licensed design professional, based on an on-site inspection, that such building is in compliance with one of the three nationally recognized building codes with respect to mitigation of the windstorm and/or hail hazard. This classification is effective only from the date of the certification.

2. Any building may be classified as Grade 1 for Earthquake upon certification by a registered or licensed design professional, based on an on-site inspection, that such building is in compliance with one of the three nationally recognized building codes with respect to mitigation of the earthquake hazard. This classification is effective only from the date of the certification.

D. Ungraded And Non-Participating Risks

Buildings which do not meet the criteria described in Paragraphs B. and C. for Grade assignment are rated and coded as ungraded or non-participating risks. Do not classify as Grade 10.

E. Rate Modification

1. Community Grading

For buildings which are eligible under Paragraph B. of this Additional Rule, and for personal property inside such buildings, modify the Basic Group II and/or Earthquake rates by the applicable factor from the following tables. Do not apply a factor if the policy excludes Windstorm or Hail coverage or if Earthquake cause of loss has not been added.

a. Basic Group II Factors

Territory

Grade/ (Code)

Seacoast 1

Seacoast 2

Seacoast 3

Inland

Key West

Monroe Excl. Key West

Territory

Grade/ (Code)

Seacoast 1

Seacoast 2

Seacoast 3

Inland

Key West

Monroe Excl. Key West

1/(01) .87 .87 .87 .91 .85 .87 2/(02) .87 .87 .87 .91 .85 .87 3/(03) .87 .87 .87 .91 .85 .87 4/(04) .92 .92 .92 .94 .91 .92 5/(05) .92 .92 .92 .94 .91 .92 6/(06) .92 .92 .92 .94 .91 .92 7/(07) .92 .92 .92 .94 .91 .92 8/(08) .97 .97 .97 .98 .97 .97 9/(09) .97 .97 .97 .98 .97 .97 10/(10) 1.00 1.00 1.00 1.00 1.00 1.00 Ungraded/(99) 1.00 1.00 1.00 1.00 1.00 1.00

Non-Partici- pating/(98)

1.01

1.01 1.01 1.01

1.01 1.01

Table A4.E.1.a. Basic Group II Factors

b. Earthquake Factors

Grade/(Code) Entire State 1 (01) .90 2 (02) .90 3 (03) .90 4 (04) .94 5 (05) .94 6 (06) .94 7 (07) .94 8 (08) .98 9 (09) .98 10 (10) 1.00 Ungraded (99) 1.00 Non-

Partici-

pating (98) 1.00

Table A4.E.1.b. Earthquake Factors

2. Individual Grading

For any building classified as Grade 1 based upon certification as set forth in Paragraph C. of the Additional Rule, use the appropriate factor listed under Paragraph E.1. Code as follows:

Community Grade

Code

1 11 2 12 3 13 4 14 5 15 6 16 7 17 8 18 9 19 10 20 Ungraded 99 Non-Participating 98

Table A4.E.2. Individual Grading

A5. RESERVED FOR FUTURE USE

A6. FUNGUS, WET ROT, DRY ROT AND BACTERIA - COVERAGE LIMITATIONS AND OPTIONS

A. Introduction

1. In this rule, reference to fungus includes wet and dry rot and bacteria.

2. Under the Causes of Loss Forms, loss caused by fungus is limited as follows:

a. Fungus is not covered unless it is a consequence of a named peril or flood (if flood is endorsed to the policy).

b. Property damage coverage is subject to a sub-limit of $15,000 per policy, applicable on an annual aggregate basis. This is not additional insurance. Property damage coverage includes the cost of tearing out and replacing any part of the building or other property to gain access to the fungus, and the cost of post-remediation testing if indicated.

c. When time element coverage is written on a policy and a suspension of operations is caused by fungus, coverage is limited to the amount of business income loss and/or extra expense sustained in a period of not more than 30 days. If the suspension of operations is caused by loss other than fungus, but fungus prolongs the period of restoration, time element loss sustained during the delay is covered but such coverage is limited to 30 days. In either case, the 30 days are cumulative, not necessarily consecutive.

3. The limitations on fungus do not affect:

a. Fungus which is a consequence of fire or lightning; or

b. Collapse which results from decay or deterioration as provided in the Collapse coverage grant in the Broad and Special Causes Of Loss Forms.

B. Optional Endorsement - Increased Coverage

1. Coverage for fungus may be increased by attaching Endorsement CP 04 31 Changes - Fungus, Wet Rot, Dry Rot And Bacteria. Under this endorsement, any or all of the following options may be provided, by appropriate entry in the Schedule:

a. Increase the $15,000 sub-limit for property coverage. The new limit may not exceed the Limit of Insurance, since coverage for fungus is part of, not in addition to, the Limit of Insurance. The revised limit on fungus remains an annual aggregate limit.

b. Change the application of the $15,000 (or higher) limit, from a per-policy annual aggregate limit to an annual aggregate limit which applies separately to specified premises or locations. If the Schedule so indicates, a premises may be a separate building.

c. Increase the time element coverage period.

2. The following rating provisions apply to the use of Endorsement CP 04 31:

a. To increase the $15,000 sub-limit, apply a loss cost to the amount of coverage (in 100's) in excess of $15,000. Refer to the loss cost pages for the applicable loss cost.

b. If the Schedule indicates that the $15,000 (or higher) limit applies to separate premises or locations, multiply the number of premises or locations (minus one) by the applicable loss cost shown in the loss cost pages.

c. Multiply the Business Income and/or Extra Expense rates otherwise applicable by the following factors based on the total number of days' coverage. The result is an additional premium.

Time Element Factors

Total Number Of Days Factor 60 .02 90 .03 120 .04 150 .06 180 .08

Table A6.B.2.c. Time Element Factors



A9. TERRORISM OPTIONS - FEDERAL BACKSTOP

Refer to the Terrorism Supplement to the CLM.

A10. TERRORISM PRICING - FEDERAL BACKSTOP

Refer to the Terrorism Supplement to the CLM.

A11. EXCLUSION OF LOSS DUE TO VIRUS OR BACTERIA

Attach Exclusion Of Loss Due To Virus Or Bacteria Endorsement CP 01 40 to all policies.

A12. CATASTROPHIC GROUND COVER COLLAPSE AND SINKHOLE LOSS

A. Florida law requires coverage in all Commercial Property policies for Catastrophic Ground Cover Collapse, which is provided under Florida Changes Endorsement CP 01 25 (see Rule 14. in these state exceptions) in place of the policy's Sinkhole Collapse coverage. Catastrophic Ground Cover Collapse provides coverage for direct physical loss or damage to Covered Property caused by or resulting from catastrophic ground cover collapse, meaning geological activity that results in all of the following:

1. The abrupt collapse of the ground cover;

2. A depression in the ground cover clearly visible to the naked eye;

3. Structural damage to the building, including the foundation; and

4. The insured structure being condemned and ordered to be vacated by the governmental agency authorized by law to issue such an order for that structure.

Catastrophic Ground Cover Collapse does not include sinkhole losses that do not meet the criteria of catastrophic ground cover collapse. Coverage for Sinkhole Loss is addressed in Paragraph D.

B. If the policy is not endorsed to cover Sinkhole Loss, multiply the Basic Group II building and personal property rates by the applicable factor from the following table:

Counties of Hernando and Pasco .80

Counties of Alachua, Citrus, Hillsborough, Lake, Marion, Pinellas, St. Lucie, Seminole, Sumter and Taylor

.94

Remainder of State .99

Table A12.B. Modification Factors For Catastrophic Ground Cover Collapse

C. If the policy is not endorsed to cover Sinkhole Loss, the insurer must include the following notice in the renewal notice and in the insurance contract by entry in the Declarations, in bold type of not less than 14 points: YOUR POLICY PROVIDES COVERAGE FOR A CATASTROPHIC GROUND COVER COLLAPSE THAT RESULTS IN THE PROPERTY BEING CONDEMNED AND UNINHABITABLE. OTHERWISE, YOUR POLICY DOES NOT PROVIDE COVERAGE FOR SINKHOLE LOSSES. YOU MAY PURCHASE ADDITIONAL COVERAGE FOR SINKHOLE LOSSES FOR AN ADDITIONAL PREMIUM.

D. Florida law requires the insurer to make available coverage for Sinkhole Loss for properties located in the state of Florida, subject to the following limited exception.

In Hernando or Pasco Counties, an insurer may nonrenew policies which include Sinkhole Loss coverage, for the purpose of removing such coverage; however, a policy including catastrophic ground cover collapse coverage must be offered. Further, in the aforementioned counties the insurer must provide each policyholder with the opportunity to purchase Sinkhole Loss coverage if such action is in accordance with the terms of the insurer's underwriting or insurability guidelines as approved by the Florida Office of Insurance Regulation, and subject to inspection of the property.

Sinkhole Loss coverage is a broader coverage than Catastrophic Ground Cover Collapse and therefore when Sinkhole Loss coverage is provided, do not apply the rate modification factors (which reflect a reduction in the Basic Group II rates) shown in Paragraph B. However, if Sinkhole Loss is provided on a residential risk, refer to Rule 70.E.4. in these state exceptions for special credit provisions relating to Sinkhole Loss.

Sinkhole Loss means loss of or damage to Covered Property when structural damage to a building, including the foundation, is caused by settlement or systematic weakening of the earth supporting the building, only when such settlement or systematic weakening results from movement or raveling of soils, sediments, or rock materials into subterranean voids created by the effect of water on a limestone or similar rock formation.

When Sinkhole Loss coverage is provided, attach Florida - Sinkhole Loss Coverage Endorsement IL 04 01 in addition to CP 01 25.

A13. OPTION NOT TO COVER CONTENTS (RESIDENTIAL RISKS)

Florida law requires that an insurer issuing a commercial residential property insurance policy must make available, at the option of the policyholder, a means to exclude contents coverage. Coverage may be excluded only if the policyholder provides a handwritten statement to the insurer, containing wording prescribed in section 627.712 of the Florida statutes. The policyholder and all other named insureds must sign and date the statement. The insurer must keep the original copy of the signed statement, electronically or otherwise, and provide a copy to the policyholder who provided it. The exclusion of coverage applies for the term of the policy and for each renewal thereafter; changes to the exclusion may be implemented only as of the date of renewal.

Policywriting Support Form IL N 153 Election Not To Purchase Contents Coverage may be used to inform the policyholder of these requirements.

Residential properties are properties classified under the following CSP codes:

0074 0078 0198 0321 0332 0343 0075 0079 0311 0322 0333 0076 0196 0312 0323 0341 0077 0197 0313 0331 0342

A14. WATER EXCLUSION

Attach Water Exclusion Endorsement CP 10 32 to all policies.

RULES (EXCEPTIOnS) RULES (MULTISTATE)

SECTION I-GENERAL RULES 1. APPLICATION OF THIS DIVISION A. Contents Division Five contains the rules, ISO prospective loss costs and/or individual company rates, rating procedures and state exceptions for the Commercial Property Coverage Part. B. Sections This Division is divided into separate sections for: 1. General Rules 2. Coverage Form Rules

Building And Personal Property Coverage 3. Coverage Form Rules

Builders' Risk Coverage 4. Coverage Form Rules

Time Element Coverage 5. Coverage Form Rules

Other Coverage Forms 6. Causes Of Loss Form Rules 7. Rating Plans 8. Basic Group 1 Class Rates 9. Classification Table 10. Rating Examples Appendix C. Rule Exceptions Refer to the state exceptions for any exception to the rules in this Division. D. Company Rates/ISO Loss Costs 1. Definition

This Division contains either ISO prospective loss costs or individual company rates. A loss cost is that portion of the premium which covers only losses and the costs associated with settling losses.

2. Company Rates All rules in this Division are designed to be utilized with rates. All references in the rules and examples to rates and/or premiums (including base premiums) shall be interpreted to mean those established by the individual insurance company.

3. Loss Cost Conversion Each insurance company must provide manualholders with either its own rates or with procedures to convert ISO prospective loss costs to rates and/or premiums. If an insurer provides its own rates, use them in place of the ISO prospective loss costs in this Manual. If an insurer does not provide its own rates, manualholders must convert the ISO prospective loss costs in this Manual to rates and/or premiums before applying any of the rules. Refer to the company for specific instructions - including rounding procedures - on how to do this.

E. Statistical Codes

Refer to the Commercial Fire and Allied Lines module of the Commercial Statistical Plan for statistical codes. 2. REFERRALS TO COMPANY Rule 2. is replaced by the following: Refer to company for: A. Any applicable rating plan modification. B. Rating or classifying any risk or exposure for which there is no manual rate or applicable

classification. Rates shall not be inadequate, excessive or unfairly discriminatory. Companies should maintain complete files, including all details of the factors used in determining the rate or classification for a particular risk and make these files available to state regulators on request. Such rates or classifications need not be filed with the state regulator. However, the second paragraph of Paragraph B. shall not apply when a company has developed or prepared a manual or schedule of rates which includes a classification applicable to a risk being written. To the extent that filing requirements apply to such a manual or schedule of rates, they must be followed. 2. REFERRALS TO COMPANY Refer to the company for: A. Rating or classifying any risk or exposure for which there is no manual rate or applicable

classification. B. Any applicable rating plan modification. 3. EFFECTIVE DATE The date shown on the bottom of the manual page is a printing date and not necessarily the effective date. Effective dates are announced on the Notices to Manualholders. 4. POLICY TERM A. Policies may be written for a specific term up to three years or on a continuous basis. B. A policy may be renewed by renewal certificate or by use of Commercial Property

Coverage Part Renewal Endorsement CP DS 02. When renewal certificates are used, they must conform in every aspect to current rules, rates and forms at the time of renewal.

5. PREMIUM COMPUTATION A. Prepaid Policies 1. Compute the premium using the annual rates in effect at policy inception multiplied by the policy term expressed in years (term factor). Refer to Table 5.A.1. Policy Term Factors for examples.

Term Of Term

Policy Factor

6 months 0.5

18 months 1.5

2 years 2.0

3 years 3.0

Table 5.A.1. Policy Term Factors 2. If the term of the policy is less than 1 year, multiply the premium determined in Paragraph A.1. by 1.1 unless the policy is issued to obtain anniversary dates common with other policies. B. Annual Premium Payment Plan Policies 1. For policies with less than $500 annual premium, compute the annual premium payment plan rates by multiplying the annual rates by 1.05. Such rates shall be used to obtain the premium due at inception and on each anniversary. 2. For other policies, compute the premium at inception using the rates in effect at that time. At each anniversary, compute the premium using the rates in effect at each anniversary. 3. Prorate the premium in preceding Paragraphs B.1. or B.2. when the policy is issued for other than a whole number of years. 4. Attach Calculation Of Premium Endorsement IL 00 03 . C. Continuous Policies Compute the premium at inception using the rates in effect at that time. At each anniversary, compute the premium using the rates in effect at each anniversary. 6. FACTORS OR MULTIPLIERS Factors or multipliers are to be applied consecutively and not added together unless otherwise specified. 7. ROUNDING PROCEDURE A. Rates Round rates, factors and multipliers after the final calculation to three decimal places. Five tenths or more of a mill shall be considered one mill, for example, .1245 = .125. B. Premium Round the premium for each coverage and cause of loss for which a separate premium is calculated, to the nearest whole dollar. Round a premium involving $.50 or over to the next higher whole dollar. 8. POLICYWRITING MINIMUM PREMIUM

A. For prepaid policies, apply the policywriting minimum premium shown in the multistate rates regardless of term.

B. For annual premium payment plan policies or continuous policies, apply the policywriting minimum premium shown in the multistate rates for each annual period.

9. ADDITIONAL PREMIUM CHANGES Paragraph A.2. is replaced by the following: A. Calculation Of Premium 2. In computing the additional premium for: a. Any changes made to a location included at policy inception, use the rates and rules

in effect on the effective date of the policy. If the changes are made after an anniversary date of the policy, use the rates and rules in effect on that anniversary date.

b. Locations which are added after policy inception (including all coverages, options and causes of loss at that location) use the rates and rules in effect as of the date of the change. This does not apply to average rated policies.

c. Any changes made to a location which was added after policy inception, use the rates and rules in effect as of the date the location was added.

Where the policy inception premium was less than the policywriting minimum premium, add the additional premium to the policy inception premium as the total premium for the policy. If the total premium is still below the policywriting minimum premium, charge the policywriting minimum premium instead.

9. ADDITIONAL PREMIUM CHANGES A. Calculation Of Premium 1. Prorate all changes requiring additional premium. 2. In computing the additional premium for: a. Any changes made to a location included at policy inception, use the rates and rules

in effect on the effective date of the policy. If the changes are made after an anniversary date of the policy, use the rates and rules in effect on that anniversary date.

b. Locations which are added after policy inception (including all coverages, options and causes of loss at that location) use the rates and rules in effect as of the date of the change. This does not apply to average rated policies.

c. Any changes made to a location which was added after policy inception, use the rates and rules in effect as of the date the location was added.

The additional premium developed is in addition to any applicable policywriting minimum premium. B. Waiver Of Premium Waive additional premium amounts as shown in the multistate rates. This waiver applies only to that portion of the premium due on the effective date of the policy change. 10. RETURN PREMIUM CHANGES A. Premium Computation 1. Compute return premium at the rates used to calculate the policy premium. 2. Compute return premium pro rata and round to the next higher whole dollar when any coverage or exposure is deleted or an amount of insurance is reduced. Retain the policywriting minimum premium.

B. Waiver Of Premium Waive return premium amounts as shown in the multistate rates. Grant any return premium due if requested by the insured. This waiver applies only to that portion of the premium due on the effective date of the policy change. 11. POLICY CANCELLATIONS Paragraph C. is replaced by the following: C. Retention Of Policywriting Minimum Premium Do not retain the policywriting minimum premium: 1. When the return premium is calculated under Paragraph A.: 2. When the policy is cancelled as of the inception date; 3. When the return premium is calculated under Paragraph B., unless an exception has been sought under the provisions of Florida Regulations Section 4-170.010 (2) by means of a prior approval filing for certain classes or types of risk as set forth in such filing. Refer to the insurer for information on exceptions, if any, in effect for that insurer. 11. POLICY CANCELLATIONS A. Pro Rata Calculations Compute return premium pro rata and round to the next higher whole dollar when a policy is cancelled: 1. At the company's request. 2. Because the insured no longer has a financial or insurable interest in the property or business operation that is the subject of insurance. 3. And rewritten in the same company or company group. 4. After the first year for a prepaid policy written for a term of more than one year. B. Other Calculations If preceding Paragraph A. does not apply, compute return premium as follows: 1. Continuous And Annual Premium Payment Policies

Compute return premium at .90 of the pro rata unearned premium for the one year or annual installment period and round to the next higher whole dollar.

2. Prepaid Policies If cancelled during the first year, compute the return premium at .90 of the pro rata unearned premium for the first year, plus the full annual premium for the subsequent years and round to the next higher whole dollar.

3. Policies With A Term Of Less Than One Year Compute return premium at .90 of the pro rata unearned premium and round to the next higher whole dollar.

C. Retention Of Policywriting Minimum Premium Retain the policywriting minimum premium when return premium is calculated under preceding Paragraph B. except when a policy is cancelled as of the inception date. 12. PROTECTIVE DEVICES AND SERVICES A. Protective Devices And Services Protective devices or services may be required. The policy must be endorsed to require that the company be notified if the devices or services are discontinued or out of service.

B. Forms 1. Protective Safeguards Endorsement IL 04 15 contains the following clauses. In addition, space is included in the form to insert a special clause peculiar to the risk being insured: a. Automatic Sprinkler System Clause b. Automatic Fire Alarm Clause c. Security Service Clause d. Service Contract Clause 2. Burglary And Robbery Protective Safeguards Endorsement CP 12 11 may be used if the premium computation under Rule 72. recognizes the applicable protective services and devices. 3. See state exceptions for other clauses and warranties referred to in Specific Property Information quote(s). C. Rule The clause or warranty specified by the rate publication must be added to the policy. D. Symbols Protective Safeguard Symbols applicable to Specific Property Information quote(s) effective on or after 1/1/86:

P-1 Automatic Sprinkler System Clause

P-2 Automatic Fire Alarm Clause P-3 Security Service Clause P-4 Service Contract Clause

13. RESTRICTIONS OF COVERAGE OR INCREASED RATE The following is added to Rule 13.: Florida Statute requires the written consent of the insured if the insurer wishes to charge a rate in excess of that otherwise applicable to the risk. Insureds Consent To Excess Rate (Florida) Endorsement IL 09 32 may be used for this purpose. 13. RESTRICTIONS OF COVERAGE OR INCREASED RATE Policies may be issued with special restrictions or at increased premiums if: A. The insured agrees in writing; and B. The policy would not be written otherwise.

14. BASIC FORMS APPLICABLE

The following is added to Rule 14.:

D. Attach Florida Changes Endorsement CP 01 25 to all policies.

Endorsement CP 01 25 provides for the following provisions:

1. Coinsurance

2. Windstorm Exterior Paint and Waterproofing Exclusion (Applicable in Seacoast Zone 1 and Monroe County.)

3. Loss Payment

4. Catastrophic Ground Cover Collapse

Refer to Additional Rule A12. for more information on Catastrophic Ground Cover Collapse and required availability of coverage for Sinkhole Loss.

5. Civil Authority

E. For Residential Condominium Associations And Commercial Units In Residential Condominiums:

1. The attributes of a residential condominium are addressed in Section 718.103(23) of Florida Statutes. In general, a residential condominium means a condominium consisting of two or more units, any of which are intended for use as a private temporary or permanent residence, except that a condominium is not a residential condominium if the use for which the units are intended is primarily commercial or industrial and not more than three units are intended to be used for private residence, and are intended to be used as housing for maintenance, managerial, janitorial, or other operational staff of the condominium. In addition, if a condominium is a residential condominium but contains units intended to be used for commercial or industrial purposes, then, with respect to those units which are not intended for or used as private residences, the condominium is not a residential condominium.

2. Florida law requires that insurance carried by a residential condominium association be based on the replacement cost of the insured property, as determined at least once every 36 months by an independent insurance appraisal or update of a prior appraisal. Under Condominium Association Coverage Form CP 00 17, activate the policy's Replacement Cost coverage.

3. Attach Florida Changes - Residential Condominium Associations Endorsement CP 01 91 to policies insuring residential condominium associations. Endorsement CP 01 91 modifies the Condominium Association Coverage Form CP 00 17 in response to Florida law governing residential condominium associations.

Endorsement CP 01 91 includes the option to schedule additional property under the condominium association's insurance. Use the applicable building rate.

Refer to Paragraph E.5. for information concerning a residential condominium association written under Standard Property Policy CP 00 99.

4. The insurer may elect to attach Florida Changes - Commercial Units In Residential Condominiums Endorsement CP 01 54 to policies insuring commercial condominium units located in a residential condominium as described in Paragraph E.1. of this

rule. Endorsement CP 01 54 modifies the Condominium Commercial Unit-owners Coverage Form CP 00 18 to complement insurance provided to the residential condominium association under Endorsement CP 01 91.

Endorsement CP 01 54 addresses covered property and related conditions and includes coverage for improvements and additions that are a part of the building or structure, when contained inside the individual unit, unless, regardless of ownership, the Condominium Association Agreement requires the Association to insure such property.

Refer to Paragraph E.5. for information concerning a commercial unit (in a residential condominium) written under Standard Property Policy CP 00 99.

5. Standard Property Policy CP 00 99

a. Attach Florida Changes - Residential Condominium Associations - Standard Property Policy Endorsement CP 17 97 to Standard Property Policies insuring residential condominium associations. Endorsement CP 17 97 modifies the Standard Property Policy CP 00 99 in response to Florida law governing residential condominium associations, and is used instead of Condominium Association Changes - Standard Property Policy Endorsement CP 17 99 for such risks.

Endorsement CP 17 97 includes Replacement Cost coverage due to the requirement outlined in Paragraph E.2. of this rule, and enables the option to schedule additional property under the association's insurance. Use the applicable building rate for any scheduled additional property.

b. The insurer may elect to attach Florida Changes - Commercial Units In Residential Condominiums - Standard Property Policy Endorsement CP 17 96 to policies insuring commercial condominium units located in a residential condominium as described in Paragraph E.1. of this rule. Endorsement CP 17 96 modifies the Standard Property Policy CP 00 99 to complement insurance provided to the residential condominium association under Endorsement CP 17 97. When used, Endorsement CP 17 96 is used instead of Condominium Commercial Unit-owners Changes - Standard Property Policy Endorsement CP 17 98.

Endorsement CP 17 96 addresses covered property and related conditions and includes coverage for improvements and additions that are a part of the building or structure, when contained inside the individual unit, unless, regardless of ownership, the Condominium Association Agreement requires the Association to insure such property.

F. Attach Florida Changes - Legal Action Against Us Endorsement IL 01 75 to all policies.

G. Attach Florida Changes - Cancellation And Nonrenewal Endorsement IL 02 55 to all policies.

H. If a policy covering a residential risk contains a separate Hurricane Deductible, the following statement must appear on the face of the policy in boldfaced type no smaller than

18 points: "THIS POLICY CONTAINS A SEPARATE DEDUCTIBLE FOR HURRICANE LOSSES WHICH MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU."

Refer to Rule 82. in these Florida exceptions for requirements concerning hurricane deductibles.

I. Policy Changes Endorsement IL 12 01 and Commercial Property Coverage Part Policy Changes Endorsement CP 12 01 do not apply in Florida. Attach Florida Policy Changes Endorsement IL 12 07 to change any items of the policy specified in the endorsement.

J. Attach Florida Changes - Mediation Or Appraisal (Commercial Residential Property) Endorsement IL 01 12 to all policies that insure residential property under:

1. Building And Personal Property Coverage Form CP 00 10; or

2. Builders Risk Coverage Form CP 00 20 with Builders Risk Renovations Endorsement CP 11 13; or

3. Condominium Association Coverage Form CP 00 17; or

4. Condominium Commercial Unit-owners Coverage Form CP 00 18; or

5. Mortgageholders Errors And Omissions Coverage Form CP 00 70 (Coverages A and B); or

6. Standard Property Policy CP 00 99.

Residential properties are properties classified under the following CSP codes:

0074 0078 0198 0321 0332 0343 0075 0079 0311 0322 0333 0076 0196 0312 0323 0341 0077 0197 0313 0331 0342

14. BASIC FORMS APPLICABLE

Except with respect to Standard Property Policy CP 00 99:

A. Attach Common Policy Conditions Form IL 00 17 to all policies.

B. Attach Commercial Property Conditions Form CP 00 90 to all policies except when Mortgageholders Errors And Omissions Coverage Form CP 00 70 is the only coverage form that applies to the Commercial Property Coverage Part.

C. Attach one or more Coverage Forms, as provided in specific rules in this Division. Also attach the applicable Causes Of Loss Form, except with respect to Coverage Form CP 00 70.

15. DEFINITIONS

A. Class Rates

Rates which apply to risks that:

1. Are eligible for class rating; and

2. Share the same classification description.

B. Construction

The following definitions apply to all causes of loss other than Earthquake:

1. Frame

Buildings where the exterior walls are wood or other combustible materials including construction where combustible materials are combined with other materials such as brick veneer, stone veneer, wood iron-clad, stucco on wood.

2. Joisted Masonry)

Buildings where the exterior walls are constructed of masonry materials such as adobe, brick, concrete, gypsum block, hollow concrete block, stone, tile or similar materials and where the floors and roof are combustible.

3. Non-Combustible

Buildings where the exterior walls and the floors and roof are constructed of, and supported by metal, asbestos, gypsum or other non-combustible materials.

4. Masonry Non-Combustible

Buildings where the exterior walls are constructed of masonry materials as described in Code 2, with the floors and roof of metal or other non-combustible materials.

5. Modified Fire Resistive

Buildings where the exterior walls and the floors and roof are constructed of masonry or fire resistive material with a fire resistance rating of one hour or more but less than two hours.

6. Fire Resistive

Buildings where the exterior walls and the floors and roof are constructed of masonry or fire resistive materials having a fire resistance rating of not less than two hours.

7. Mixed Construction

When a building is of mixed construction, refer to Rule 85.D. to determine applicable construction type.

8. Construction Enhancements For Basic Group II

a. Reinforced Masonry

Walls must be reinforced in both the vertical and horizontal directions with steel reinforcement. Vertical reinforcement shall be fully grouted in the cells of hollow masonry units. Horizontal reinforcement shall be fully grouted in specially formed (Bond Beam) units designed for that purpose. Tilt-up or poured concrete wall units shall be reinforced both vertically and horizontally with reinforcing steel.

b. Heavy Steel

Building must have heavyweight steel H or I column and beam framing, welded, bolted or riveted.

c. Light steel

Building is constructed with tapered H or I columns or lightweight steel framing with lightweight steel roof; preengineered or custom designed lightweight steel structures with lightweight steel walls and roofs.

d. High-Rise

Building must have five stories (that is, separate floors) or greater, including the ground floor but excluding the basement.

C. Location

1. Definition

For property damage rating, a location is defined as each separately rated, non-communicating building or structure.

2. Location Count Rule

a. Incidental Locations

When a form provides for insuring undesignated locations subject to a nominal limit of insurance at each location, do not include such locations in any location count.

b. Ineligible Properties

Do not include ineligible properties when counting locations if the rules of a program or rating plan consider certain properties as ineligible.

D. Miscellaneous Locations

1. Definition

When property damage coverage applies to property at 5 or more locations, either blanket or specific, disregard items with values of less than $150,000 and totaling less than 10% of the total coverage in the calculation of the multiple location average rate or other average rates. Locations with such values are Miscellaneous Locations.

2. Rules

a. Location Determination

Determine locations in accordance with the location definition of Paragraph C.

b. Determination Of Values

(1) Compute the amount that is 10% of the total values by multiplying the total of all values at all locations by .10.

(2) When an average rate includes buildings and personal property coverages, combine the values of buildings and personal property at the same location.

(3) Determine the sum of the values of items at locations with values of less than $150,000 beginning with the lowest valued location and proceeding to the next lowest valued location. So long as the total values at these locations are less than the amount computed in Paragraph (1), the locations are Miscellaneous Locations. If the next lowest valued location would make that total more than the amount computed in Paragraph (1), do not classify that location as miscellaneous.

3. Premium Determination

Determine the premium for Miscellaneous Locations, if calculated separately, by multiplying the multiple location average rate or other average rate by the total of the values at the Miscellaneous Locations.

4. Values

Whenever the word "values" is used in this rule, it means:

a. Average values when a reporting form is used on renewal business, or

b. Total of the limits of insurance contemplating the appropriate Coinsurance percentage when a non-reporting form is used or when a reporting form is used on new business.

5. Miscellaneous Locations Example

See Rating Examples Appendix.

E. Specific Rates

Rates based on loss costs provided by ISO for particular risks. They are based on a property survey and on the application of rating schedules.

16. FORMS PORTFOLIO REFERENCE

Refer to the forms portfolio for information on:

A. Sample Forms; and

B. Applicability and edition dates of forms in each state.

17. RESIDENT AGENT COUNTERSIGNATURE

Rule 17. does not apply.

17. RESIDENT AGENT COUNTERSIGNATURE

If a resident agent's countersignature is required by state law, use Resident Agent Countersignature Endorsement IL 09 17 unless state law prohibits use of such an endorsement, or so restricts such use as to make it inappropriate.

18. CHANGES IN RATES, RULES AND FORMS

A. General Revisions

1. Explanation

A general revision is a:

a. Revision in rules or forms; or

b. Rate revision applying to one or more classes, including rate schedule changes and changes due to reclassification of a community or district.

2. Application To Existing Policies

General revisions to rates and rules do not apply to policies existing prior to the effective date of the revision except that:

a. At the request of the insured, policies may be adjusted by policy change effective on the next anniversary date to incorporate a general revision. If the policy is subject to audit, attach a copy of the rating worksheet or similar information showing how the additional or return premium was calculated.

b. Policies may be cancelled and rewritten at reduced rates resulting from a general revision if the changes are to take effect on other than a policy anniversary date. Refer to Rule 11.

B. Other Rate Revisions

Because of materially changed conditions, an existing rate may be inequitable. If so, a new rate may be established and policies in force may be changed. The effective date of the new rate is the date ISO or the company receives notification of the changed conditions.

19. INTERSTATE ACCOUNTS (PROPERTY DAMAGE OR TIME ELEMENT POLICIES)

A. Writing Of Interstate Accounts

Property Damage or Time Element policies providing either specific or blanket coverage on locations in more than one state may be written in one policy subject to the rules and forms of the state in which the:

1. Insured's largest valued location or headquarters is located; or

2. Insurance is negotiated.

B. Application For Rates

Companies may submit applications to ISO, for rating interstate accounts. The accounts will be rated using the company's rates, or its loss costs and Loss Cost Multiplier. ISO will provide:

1. Interstate account average rates computed for each cause of loss in accordance with the property damage or time element rules of this division.

2. For specific coverage, the specific rates for each location.

20. RATES

A. Coinsurance Basis

Class rates and specific rates are 80% coinsurance rates unless otherwise specified. Refer to Section III - Causes of Loss Form rules to convert 80% coinsurance rates to an other than 80% coinsurance basis.

B. Unrated Risks

Risks not eligible for class rates and not yet specifically rated may be written at a tentative rate until the specific loss cost is provided by ISO. Tentative Rate Endorsement CP 99 93 is available for attachment when the policy is written. CP 99 93 may also be used at policy renewal in the event that, due to materially changed conditions, an existing specific rate becomes inequitable. After the actual specific rate is available, endorse the policy to the specific rate. The new rate will be effective as of the inception date or renewal date of the policy.

For convenience, a tentative loss cost from ISO may be obtained for a new building not yet completed.

C. Rating Basis

Unless otherwise specified, all rates in this Division are for each $100 of insurance and are annual rates.

21. TRANSFER OF INSURANCE AND REMOVAL OF PROPERTY

Paragraph A. is replaced by the following:

A. When personal property is moved from one location to another and the insured wants to transfer his or her insurance to cover both locations during removal, Florida Policy Changes Endorsement IL 12 07 provides coverage for a period of ten days.

21. TRANSFER OF INSURANCE AND REMOVAL OF PROPERTY

A. When personal property is moved from one location to another and the insured wants to transfer his or her insurance to cover both locations during removal, the Policy Changes Endorsement CP 12 01 provides coverage for a period of ten days.

B. When insurance covering property is transferred to a location with a different rate, adjust the difference in the premium proportionally. Add all clauses and warranties applying at the new location to the policy.

22. ELECTRICAL APPARATUS

A. Use Electrical Apparatus Endorsement CP 04 10 with policies covering public service light, power and traction properties.

B. This form modifies the Electrical Apparatus Exclusion of the Causes Of Loss - Basic, Causes Of Loss - Broad and Causes Of Loss - Special Forms and provides for a $1,000 deductible.

23. LOCATION OF CLASSIFICATIONS, TERRITORIES AND RATES

A. Location Of Classifications

1. Refer to Classification Table to obtain the following:

Causes Of Loss Classification Table Item

Basic

Classification Description, CSP Building and Contents Class Code

Special (Applicable to Personal Property only when coverage for theft is provided.)

Personal Property Rate Group and Class Limit

Table 23.A.1. Classification Table Information

2. Refer to Division Rules to obtain the following:

Causes Of Loss Form

Cause Of Loss

Rule No.

Causes Of Loss Form

Cause Of Loss

Rule No.

Basic, Broad, Special

Group I Construction Definitions

15.B.

Basic

Group II Rate Symbols

70.

Earthquake

Building Classification, Personal Property Rate Grade

73.

Table 23.A.2. Rules Providing Classification Information

B. Location Of Rating Territories

Refer to Territory Definitions in the Community Mitigation Classification Manual or the Territory Code Manual to determine the territory and territory code applicable to the location of the property being insured. Rates for the following causes of loss may vary by territory:

Causes of Loss:

1. Basic.

a. Group I (class rated risks only)

b. Group II

2. Special (personal property other than offices and apartments/condominiums).

3. Earthquake.

4. Sprinkler Leakage - Earthquake Extension.

Refer to the state rates and state exceptions for rates or rating factors that vary by territory. Refer to the territory section for ZIP code-based territory definitions where applicable.

C. Location Of Public Protection Classification Information

Refer to the state section of ISO's Community Mitigation Classification Manual to determine the protection classification applicable to the community or classified area where the insured

property is located. Basic Group I rates (class rated risks only) may vary by protection classification.

Refer to the state rates and state exceptions for rates or rating factors that vary by protection.

D. Location Of Rates

Rates may be found as follows for basic and optional coverages:

Causes Of Loss Location Group I (Special Class

Rated Multistate Rates

Properties) Broad Special (Theft Increments Only) Group I (Class Rated State Rates Properties) Group II Special (Except Theft Increments) Earthquake Group I (Specific Rated Specific

Properties)

Property Information Quote

Earthquake (When Specifically

Rated)

Table 23.D. Location Of Rates

24. CONTRIBUTING INSURANCE

A. When coverage is divided between two or more companies on a percentage basis, the Contributing Insurance Endorsement CP 99 20 may be attached.

B. In the coverage part Declarations, show the limit of insurance for each coverage written by the company.

C. In Item A. of the Schedule of CP 99 20 , show the company's percentage (%) of the total of all contributing insurance; and

In Item B. of that Schedule, show the total dollar amount of all contributing insurance, for each coverage subject to contributing insurance.

25. RISKS REINSURED ON A FACULTATIVE BASIS - INDIVIDUAL RISK SITUATIONS

Paragraph A. is replaced by the following:

A. When coverage or a portion of coverage is reinsured on a facultative (individual risk) basis, the following rating procedure may be used, subject to Paragraph B.:

1. Manual rules and rates (for a specifically rated property - rates based on the Specific Property Information quote) apply to the portion of the Limit of Insurance retained by the company.

2. For any portion of the Limit of Insurance obtained by means of facultative reinsurance, the premium shall be the facultative cost for such coverage, increased by a charge up to but not exceeding 50% for the expenses of the company.

This procedure applies to any coverage (for example, property damage or time element) written under the Commercial Property program on a monoline or package basis.

25. RISKS REINSURED ON A FACULTATIVE BASIS - INDIVIDUAL RISK SITUATIONS

A. When coverage or a portion of coverage is reinsured on a facultative (individual risk) basis, the following rating procedure may be used, subject to Paragraph B.:

1. Manual rules and rates (for a specifically rated property - rates based on the Specific Property Information quote) apply to the portion of the Limit of Insurance retained by the company.

2. For any portion of the Limit of Insurance obtained by means of facultative reinsurance, the premium shall be the facultative cost for such coverage, increased by a charge

up to but not exceeding 50%. The charge shall not be inadequate, excessive or unfairly discriminatory.

This procedure applies to any coverage (for example, property damage or time element) written under the Commercial Property program on a monoline or package basis.

B. With respect to the premium developed in accordance with Paragraph A.2., the company is responsible for:

1. Complying with any regulatory requirements, including any requirements for filing or disclosure.

2. Maintaining complete files, including all details relating to selection of the premium charge.

25-29. RESERVED FOR FUTURE USE

26. - 29. RESERVED FOR FUTURE USE

SECTION II-COVERAGE FORM RULES BUILDING AND PERSONAL PROPERTY

SECTION II-COVERAGE FORM RULES BUILDING AND PERSONAL PROPERTY COVERAGE

30. BUILDING

A. Description Of Coverage

1. Refer to Building And Personal Property Coverage Form CP 00 10 for description of building coverage. If building coverage is provided for a Condominium Association, refer to Condominium Association Coverage Form CP 00 17.

2. Consider each separately rated structure as a single building.

B. Basic Form

Use Form CP 00 10 or, when applicable, Form CP 00 17.

C. Rules

1. Fixtures, Machinery And Equipment

The following are included as part of the building coverage, if owned by the building owner or Condominium Association:

a. Fixtures, including outdoor fixtures (Form CP 00 10);

b. Fixtures outside of individual units, including outdoor fixtures (Form CP 00 17) (Also see Paragraph 2.h. of this rule.); and

c. Machinery and equipment - if permanently installed.

Machinery and equipment that are not permanently installed may be included in the building item at the building rate. Use Additional Building Property Endorsement CP 14 15.

2. Additional Covered Property

The following types of property are not Covered Property under Forms CP 00 10 and CP 00 17. They may be covered for the various causes of loss at the building rate.

For some properties, Special Class Rates may apply; refer to Rule 85.L. Use Additional Covered Property Endorsement CP 14 10. In the Schedule of Endorsement CP 14 10, indicate that Building Coverage applies and insert the appropriate paragraph reference from the applicable coverage form.

a. The cost of excavations, grading, backfilling or filling.

b. Foundations of buildings, structures, machinery or boilers if their foundations are below:

(1) The lowest basement floor; or

(2) The surface of the ground, if there is no basement.

c. Underground pipes, flues, or drains.

d. Bulkheads, pilings, piers, wharves or docks.

e. Fences outside of buildings. (Forms CP 00 10 and CP 00 17 provide $1,000 coverage for fences by means of the automatic Coverage Extension for Outdoor Property. The Extension provides for limited causes of loss.)

f. Retaining walls that are not part of the building.

g. Bridges, roadways, walks, patios or other paved surfaces.

h. The following types of property, contained in a condominium unit, are included in building coverage under Form CP 00 17, whether owned by the Condominium Association or by a unit-owner, providing the Condominium Association Agreement requires the Association to insure this property:

(1) Fixtures, improvements and alterations that are part of the building; and

(2) Appliances.

3. Signs And Antennas

a. Outdoor Signs

Outdoor signs, whether or not attached to the building, are Covered Property under Forms CP 00 10 and CP 00 17, subject to a limit of $2,500 per sign. The amount of coverage may be increased by endorsing the policy and using the appropriate rates.

Use Outdoor Signs Endorsement CP 14 40.

b. Radio Or Television Antennas (Including Satellite Dishes)

Radio and television antennas (including satellite dishes) are not Covered Property under Forms CP 00 10 and CP 00 17. Forms CP 00 10 and CP 00 17 provide $1,000 coverage for antennas by means of the automatic Coverage Extension for Outdoor Property. The Extension provides for limited causes of loss. The amount of coverage may be increased and the Covered Causes of Loss may be broadened by endorsing the policy and using the appropriate rates.

Use Radio Or Television Antennas Endorsement CP 14 50.

4. Additional Property Not Covered

The following types of property may be specifically excluded from coverage under Forms CP 00 10 and CP 00 17. Use Additional Property Not Covered Endorsement CP 14 20:

a. Awnings or canopies of fabric or slat construction, including their supports;

b. Brick, metal, stone, or concrete chimneys or stacks not forming part of a building, or metal smokestacks;

c. Crop silos;

d. Swimming pools, diving towers or platforms;

e. Waterwheels, windmills, wind pumps or their towers;

f. The value of improvements, alterations or repairs (including labor, materials and supplies) being performed by a named individual or organization. This includes existing real property that will be demolished or permanently removed in the course of making the improvements, alterations or repairs. If this provision is attached to the policy midterm, grant pro rata return premium for any reduction of the limit of insurance.

g. Any other type of property for which more specific property damage coverage is available.

5. Building Glass - Tenant's Policy

a. Description

Building Glass - Tenant's Policy Endorsement CP 14 70 may be used to provide coverage for building glass, provided that:

(1) The insured is a tenant and the Building is not otherwise covered under the policy; and

(2) The tenant has a contractual responsibility to insure the building glass, or a contractual responsibility to pay for loss or damage to that property.

b. Form

Use Building Glass - Tenant's Policy Endorsement CP 14 70.

c. Rules

(1) Schedule

Indicate the following in the Schedule of Endorsement CP 14 70.

(a) The location of the Building.

(b) A description of the Building Glass.

(c) The applicable Causes Of Loss form (and any related endorsements).

(d) The applicable limit of insurance for Building Glass Coverage.

(2) Rating

Use the applicable building rate.

31. PERSONAL PROPERTY


1. Refer to Building And Personal Property Coverage Form CP 00 10 for description of coverage for personal property of the insured and personal property of others. If Personal Property Coverage is provided for a condominium association or a condominium unit-owner, refer to Condominium Association Coverage Form CP 00 17, or Condominium Commercial Unit-Owners Coverage Form CP 00 18, respectively. Do not use Form CP 00 18 to provide coverage for unit-owners personal property contained in a residential premises. Refer to Personal Lines Manuals.

2. Consider each separately rated structure a single building and determine the rates applying to personal property according to the building containing the personal property.

B. Basic Form

Use Form CP 00 10 or, when applicable, Forms CP 00 17 or CP 00 18.

C. Rules

1. Personal Property Of The Insured

a. Business personal property owned by the insured may be covered under Forms CP 00 10 and CP 00 18. Form CP 00 17 provides coverage for business personal property owned indivisibly by each unit-owner in the name of the condominium association. The following may be covered under Forms CP 00 10 and CP 00 18 as separate items by so indicating in the Declarations or by using Your Business Personal Property - Separation Of Coverage

Endorsement CP 19 10. Form references in parentheses indicate the form that is applicable to the particular property.

(1) Stock (Form CP 00 10; Form CP 00 18);

(2) Contents except stock (Form CP 00 10; Form CP 00 18);

(3) Machinery and equipment (Form CP 00 10; Form CP 00 18);

(4) Furniture (Form CP 00 10; Form CP 00 18);

(5) Fixtures (Form CP 00 10);

(6) Fixtures, improvements and alterations making up part of the building and owned by the insured as unit-owners (Form CP 00 18); and

(7) Tenants Improvements and Betterments (Form CP 00 10).

b. Use the highest rate applying to any of the subjects covered when written as one item in one building.

2. Personal Property Of Others

a. Personal Property of Others in the care, custody or control of the insured may be covered:

(1) Specifically at the rate for similar property of the insured.

(2) Blanket with property of the insured as provided in Rule 34.

b. When personal property of the insured is covered and the 80% or higher coinsurance clause applies, Forms CP 00 10, CP 00 17 and CP 00 18 afford coverage at the option of the insured for personal property of others to the extent of $2,500. This extension is an additional amount of insurance.

c. The insured's liability for personal property of others in his or her care, custody or control may be insured as provided in the rules for the Legal Liability Coverage Form, Rule 66.

d. When personal property of the insured is covered and the 80% or higher coinsurance clause applies, Forms CP 00 10, CP 00 17, CP 00 18 and CP 00 99 cover non-owned detached trailers to the extent of $5,000 under the Coverage Extensions. Coverage applies if the trailer is used in the insured's business and is in the insured's care, custody or control at the described premises, provided the insured has a contractual responsibility to pay for loss or damage. Coverage in excess of $5,000 may be provided by entry in the Declarations and rated in accordance with Paragraph a. of this rule.

3. Additional Covered Property

The following types of property are excluded under Forms CP 00 10, CP 00 17 and CP 00 18 except as described in Paragraphs a. and b. Coverage for these properties at the appropriate rate is available by using Additional Covered Property Endorsement CP 14 10. In the Schedule of Endorsement CP 14 10, indicate that Personal Property Coverage applies and insert the appropriate paragraph reference from the applicable coverage form.

a. Vehicles or self-propelled machines (including aircraft or watercraft) that:

(1) Are licensed for use on public roads;

(2) Are operated principally away from the described premises; or

(3) You do not manufacture, process, warehouse or hold for sale. But this paragraph does not apply to rowboats or canoes out of the water at the described premises.

b. Animals, unless owned by others and boarded by you, or if owned by you, only as "stock" while inside of buildings.

4. Signs And Antennas

a. Outdoor Signs

Outdoor signs, whether or not attached to the building, are Covered Property under Forms CP 00 10, CP 00 17 and CP 00 18, subject to a limit of $2,500 per sign. The amount of coverage may be increased by endorsing the policy and using the appropriate rates.

Use Outdoor Signs Endorsement CP 14 40.

b. Radio Or Television Antennas (Including Satellite Dishes)

Radio and television antennas (including satellite dishes) are not Covered Property under Forms CP 00 10, CP 00 17 and CP 00 18. These forms provide $1,000 coverage for antennas by means of the automatic Coverage Extension for Outdoor Property. The Extension provides for limited causes of loss. The amount of coverage may be increased and the covered causes of loss may be broadened by endorsing the policy and using the appropriate rates.

Use Radio Or Television Antennas Endorsement CP 14 50.

5. Additional Property Not Covered

The following types of property may be specifically excluded from coverage under Forms CP 00 10, CP 00 17 and CP 00 18. Use Additional Property Not Covered Endorsement CP 14 20.

a. Personal Property contained in safes or vaults.

b. Contents of crop silos.

c. Glass which is not part of a building or structure.

d. Metals in ingots, pigs, billets, or scraps.

e. Ores, gravels, clay, or sand.

f. Property of others.

g. Property stored in open yards.

h. Signs inside the premises.

i. Vending machines or their contents.

j. Any other type of property for which more specific property damage coverage is available.

k. The following types of property, contained within a condominium unit, are covered under Form CP 00 18 whether owned by the Condominium Association or by the unit-owner, unless the Condominium Association Agreement requires the Condominium Association to insure this property:

(1) Fixtures, improvements and alterations that are part of the building; and

(2) Appliances.

6. Uninsurable Property

The following types of property are excluded from Forms CP 00 10, CP 00 17 and CP 00 18 with no provision for insuring them under the Commercial Property Coverage Part:

a. Accounts, bills, currency, deeds, evidences of debt, money, notes or securities;

b. Contraband, or property in the course of illegal transportation or trade;

c. Grain, hay, straw or other crops while outside of buildings;

d. Growing crops or lawns;

e. Personal property while airborne or waterborne; and

f. Property that is covered under another coverage form in which it is more specifically described, except for the excess of the amount due from that other insurance.

7. Leased Property

Coverage for leased property under a written lease agreement may be provided under:

a. Your Business Personal Property Coverage, by:

(1) Including the value of the leased property in the limit of insurance for Your Business Personal Property; or

(2) Using Leased Property Endorsement CP 14 60. The leased property covered must be specifically described in the schedule. An agreed value option exists in case the lease agreement contains specific insurance valuation requirements; or

b. For Personal Property Of Others Coverage, refer to Paragraph 2. for detailed information.

If leased property at the same premises is written under more than one coverage described above, do not include the value of property insured under Endorsement CP 14 60 in establishing the limit of insurance for Your Business Personal Property or Personal Property Of Others.

8. Household Personal Property

To provide coverage for household and personal property at the living quarters of the insured, attach Household Personal Property Coverage Endorsement CP 99 92. When the Causes Of Loss - Special Form (Including Theft) applies, use the Apartments And Condominiums contents rate shown in Rule 72.E.2.d.(1).

9. Valuable Papers And Records - Other Than Electronic Data

a. Description Of Coverage

The $2,500 per-premises limit provided in the Coverage Extensions of the Building And Personal Property and Condominium Coverage Forms and the Standard Property Policy may be increased to a higher amount via Declaration entry.

b. Rules

Indicate in the Declarations the total limit per-premises for Valuable Papers and Records - Other Than Electronic Data.

c. Additional Premium

Refer to rating provisions implemented by the Company in compliance with regulatory requirements.

10. Electronic Data

Electronic data is Property Not Covered. In the Building And Personal Property and Condominium Coverage Forms and the Standard Property Policy, an automatic Additional Coverage - Electronic Data provides coverage for the cost to replace or restore electronic data which is destroyed or corrupted by certain named perils. Coverage is subject to an annual aggregate limit of $2,500. This limit is the maximum payable regardless of the number of occurrences of loss or damage or the number of premises, locations or computer systems involved.

Refer to the Rule titled Electronic Commerce Endorsement for an option which in part relates to electronic data used in the conduct of electronic commerce.

32. TENANTS IMPROVEMENTS AND BETTERMENTS

A. Explanation

Improvements and betterments are improvements to real property. They are of a permanent nature, such as a new store front, decorations, partitions or elevators. The improvements and betterments are either installed or acquired by the tenant but are not legally removable by the tenant.

This coverage protects a tenant's use interest in improvements and betterments which may be damaged or destroyed by a covered cause of loss. If loss of use is caused by cancellation of a lease due to damage or destruction caused by a covered cause of loss, coverage may be provided using the Leasehold Interest Coverage Form CP 00 60. Refer to Rule 65.

B. Description Of Coverage

1. Refer to Building And Personal Property Coverage Form CP 00 10 for a description of tenants improvements and betterments. The improvements and betterments are those made or acquired at the tenant's expense but not necessarily during the period of the current lease.

2. Refer to the Valuation Condition of Form CP 00 10 for a description of the special basis for valuation of tenants improvements and betterments.

C. Form

Use Form CP 00 10.

D. Rules

1. General

Improvements and betterments may be written as a separate policy, a separate item or as a part of an item also covering personal property under a blanket amount.

2. Exclusion From Lessor's Building Coverage

Improvements and betterments may be excluded from the building coverage of Form CP 00 10. Use Additional Property Not Covered Endorsement CP 14 20.

E. Rates

1. When written in the same item as personal property, use the personal property rate.

2. When written as a separate item, use the building rate.

33. DEDUCTIBLE

The following is added to Paragraph C.:

The minimum deductible for Hurricane Coverage on residential risks is $500. The maximum deductible for Hurricane Coverage on residential risks is 10%, subject to the eligibility criteria, mandatory offer requirements and limitations set forth in Rule 82. in these state exceptions, unless one of the following exceptions applies:

If the risk was covered on August 24, 1992, under a policy having a deductible higher than 10% of the policy limits, then a policy covering such risk may include a deductible no higher than the deductible in effect on August 24, 1992; or

An insurer may require a higher deductible, provided such deductible is the same as or similar to a deductible program lawfully in effect on June 14, 1995.

If the $500 minimum deductible is required for Hurricane for a particular risk, do not use the $250 Deductible Option for any Causes of Loss under that policy.

33. DEDUCTIBLE

A. All property damage rates for buildings and personal property contemplate a minimum deductible of $500 unless otherwise provided.

B. See Rule 81. if higher fixed dollar deductibles are desired, for Windstorm or Hail, Theft, and for all other causes of loss except Earthquake. See Rule 82. for Windstorm or Hail percentage deductibles.

C. If a deductible of $250 applies, multiply the rates otherwise applicable by the appropriate factor(s) from Table 33.C. $250 Deductible Option Factors.

Causes Of Loss Factor Basic Causes Of Loss 1.05 Broad Causes Of Loss 1.05 Special Causes Of Loss 1.10 All Other Except Earthquake 1.10

Table 33.C. $250 Deductible Option Factors

34. SPECIFIC AND BLANKET INSURANCE

A. Specific Insurance

Insurance is specific when the entire amount of insurance under a particular item applies at one location to one type of property such as a single building, personal property of the insured or personal property of others situated in a single building. Refer to Rule 30., Rule 31., and Rule 32. for rules affecting specific coverage of these types of property.

B. Blanket Insurance

1. Explanation

Blanket Insurance covers under one amount:

a. One type of property in more than one separately rated building; or

b. Two or more types of property in one or more separately rated buildings.

2. Examples

Examples of types of property are:

a. Building;

b. Personal property of the named insured;

c. Personal property of others in the care, custody or control of the named insured; and

d. Tenants improvements and betterments.

3. Coinsurance

Minimum 90% except for the following:

a. No minimum coinsurance percentage applies to lumberyard property when one rate applies to all buildings and personal property at a single location. When more than one rate is applicable, indicate 90% or higher coinsurance.

b. 80% coinsurance applies if:

(1) Personal property of others in the care, custody or control of the named insured is covered in the same item with personal property of the insured and when such personal property of others is located in the same separately rated building and subject to the same rate as the personal property of the named insured.

(2) Tenants improvements and betterments are covered in the same item with personal property of the insured and when the improvements and betterments are located in the same separately rated building.

4. Rules

a. Restriction

Do not combine direct physical damage with time element coverages under one item.

b. Interstate Accounts

Refer to Rule 19.

5. Rates

a. Blanket Average Rates

(1) Use the following forms in calculating blanket average rates:

(a) Statement Of Values Endorsement CP 16 15.

(b) Other forms and endorsements, if necessary, to provide information not shown on Endorsement CP 16 15.

ISO will calculate blanket average rates upon request, using the company's rates or its loss costs and Loss Cost Multiplier.

(2) Calculate blanket average rates and premiums from Endorsement CP 16 15 by coverage and cause of loss as follows:

(a) Calculate a premium for each item by applying the 80% coinsurance class or specific rate to 100% of values. (To determine the 80% coinsurance Theft rate for Special Form contents coverage for Offices or All Other Personal Property, refer to Rule 72.G.)

(b) Develop the sum of all the premiums for all items as determined in (a).

(c) Develop the sum of the 100% values for all items.

(d) Divide the result of (b) by the result of (c) in hundreds. The result is the 90% coinsurance blanket average rate.

(e) If 90% coinsurance is used, determine the blanket premium for each covered cause of loss by multiplying the 90% coinsurance blanket average rate by the limit of insurance in hundreds.

(f) If 100% coinsurance is used, determine the blanket premium for each covered cause of loss by multiplying the 90% coinsurance blanket average rate by .95 and multiply the result by the limit of insurance in hundreds.

(3) For example, see Rating Examples Appendix.

(4) A blanket average rate expires one year from its effective date or when there is a general revision in rates, whichever occurs first.

(5) A blanket rate may be recalculated if the conditions upon which the average rate is based have materially changed.

b. Highest Rates

(1) If a blanket average rate is not used:

(a) Apply the highest 80% coinsurance class or specific rate of any type of property included in the coverage.

(b) Use 90% coinsurance without any further reduction in rate, and

(c) Multiply the rate by the limit of insurance in hundreds to develop the premium for each covered cause of loss.

(2) If 100% coinsurance is used, multiply the 80% coinsurance rate by .95.

(3) The highest rate must be determined separately for each cause of loss.

c. Multiple Location Average Rate

Refer to Rules 35. and 36. for developing blanket average rates for property coverage written on a multiple location average rated basis.

6. Limitation On Loss Settlement - Margin Clause

a. Explanation

The Margin Clause limits the maximum loss payable on items of insurance that are written under a blanket Limit of Insurance. In the event of a loss:

(1) The maximum loss payable on an individual item of insurance is calculated by applying the selected Margin Clause percentage, as shown on the Schedule, to the most recently reported value of that property.

(2) The actual loss payment is determined based on the amount of loss and all applicable policy provisions such as Coinsurance (if applicable) and Deductible. The actual loss payment will not exceed the maximum loss payable determined in Paragraph (1). The Margin Clause does not increase the blanket Limit of Insurance.

(3) If the statement of values does not state individually the value of each building and the value of contents at each building or premises, individual values will be determined by the insuring Company as a part of the total reported values prior to application of the Margin Clause percentage.

b. Eligibility

The Margin Clause may be used on property written under a blanket Limit of Insurance with or without a Coinsurance requirement or Agreed Value requirement. Do not use the Margin Clause for property subject to value reporting forms.

c. Form

Use Limitation On Loss Settlement - Blanket Insurance (Margin Clause) CP 12 32. Also use Statement Of Values CP 16 15 or other means of stating value.

d. Rating

Apply the following factors to the rates for affected property.

Selected Margin Clause

Margin Clause Rating Factor

105% 0.93 110% 0.94 120% 0.95 130% 0.96

Table 34.B.6.d. Margin Clause Rating Factors

35. ADDITIONAL LOCATIONS - SPECIAL COINSURANCE PROVISIONS FORM


Additional Locations - Special Coinsurance Provisions Form is intended for insureds whose values do not materially fluctuate. This form is to be used when the policy is rated using multiple location average rates. 90% or 100% Coinsurance is required and applies to the total of the values at all locations at the time of loss and not to the individual location limits. The form may also provide coverage for reported, acquired and incidental locations. Refer to Value Reporting Form Rule 36.E.2. for definitions of reported, acquired and incidental locations.

This form is written subject to:

1. An Overall Limit of Insurance, which is the amount that is used in the application of the Coinsurance Condition (This is not blanket insurance.); and

2. Individual location limits of insurance that are the most the company will pay for loss to covered property at each location.

B. Form

1. Use Additional Locations - Special Coinsurance Provisions Endorsement CP 13 20. Attach Endorsement CP 13 20 to Building And Personal Property Coverage Form CP 00 10 or to Condominium Commercial Unit-Owners Form CP 00 18.

2. Use Reported-Acquired-Incidental Locations Schedule Endorsement CP DS 04 to designate the Overall Limit of Insurance and the limits of insurance for reported, acquired and incidental locations, if not shown in the Declarations.

C. Eligible Property

Coverage may be written to apply to:

1. Merchandise and stock (raw, in process or finished) owned by the insured.

2. All business personal property owned by the insured.

3. Personal property owned by others in the care, custody or control of the insured.

D. Ineligible Property

Property located at any risk owned or controlled by the insured and rated under the Rating Plan For Highly Protected Or Superior Risks.

E. Rules

1. Coinsurance

The minimum coinsurance is 90%.

2. Incidental Locations

If a limit of insurance applies to incidental locations, the insured must submit a signed statement showing all such values, as of the inception and each anniversary date of the policy, separately for each state.

F. Premium Determination

1. Rating Base

a. Rates for this form are calculated at policy inception for each covered cause of loss insured against using specific rates and average values at each location. If ISO is to calculate the multiple location average rate, the company must submit a completed Multiple Location/Premium And Dispersion Credit Application Form CP 13 70 for all new and renewal accounts. See also Rule 19.

b. When a limit of insurance is shown for incidental locations in the Declarations or on Endorsement CP DS 04, use the rates shown in the multistate rates.

2. Multiple Location Average Rate Development

a. Formula

For each covered cause of loss, use the following formula:

MULTIPLE LOCATION AVERAGE RATE =

TOTAL PREMIUM FOR ALL LOCATIONS TOTAL VALUES FOR ALL LOCATIONS (IN HUNDREDS)

b. Determination Of Total Premium For All Locations

(1) Obtain the average values for each location from Form CP 13 70.

(2) Multiply the average values in hundreds at each location by the 100% coinsurance rates for each cause of loss to determine the premiums at each location. Add the premiums at each location to determine the total premium for all locations.

(3) Do not include Miscellaneous Locations in determining the total premium. See Rule 15.D. for definition of Miscellaneous Locations.

c. Determination Of Total Values For All Locations

Total the average values for all locations excluding the average values for Miscellaneous Locations.

d. Multiple Location Average Rate

(1) The multiple location average rate is based on the 100% coinsurance specific or class rate for each covered cause of loss.

(2) Calculate the multiple location average rate for each covered cause of loss by dividing the total of the individual location premiums for each covered cause of loss by the total of the average values in hundreds for that cause of loss for all locations except for the average values at Miscellaneous Locations.

(3) If 90% coinsurance is used, multiply the 100% coinsurance multiple location average rate by 1.05.

(4) For deductible credits, apply the factors for Deductible Insurance to the applicable rates for covered property prior to calculating the multiple location average rate. See Rule 81.

(5) Multiple location average rates may be modified by use of the Multiple Location Premium and Dispersion Credit Plan. Refer to the company for further information and application of this Plan.

(6) If a cause of loss is added during the policy year, calculate the multiple location average rate for that cause of loss by using the values that were used in the original calculation. If the added cause of loss involves a location added after the policy inception or anniversary date, use estimated average values at that location.

Apply the rates in effect for the added cause of loss as of the date of its addition.

e. Recomputation Of Rates

Multiple location average rates must be recomputed:

(1) At each policy anniversary date, for coverage afforded in the following policy year.

(2) Whenever there is a material change in conditions causing the previous rate to be inequitable.

Endorse policies in force to show the new rates effective on the date ISO or the company receives notice of the changed conditions.

3. Premium Development

a. Limit Of Insurance

The Overall Limit of Insurance must not be less than the amount necessary to comply with the coinsurance requirement.

b. Calculation

For each covered cause of loss, multiply the multiple location average rate by the Overall Limit of Insurance in hundreds to determine the premium.

4. Increases In Limits Of Insurance

Limits of insurance at each location may be increased without any additional premium. The Overall Limit of Insurance should be increased if it is inadequate to comply with the coinsurance requirement, and the appropriate additional premium charged.

5. New Locations

New locations may be added to the policy without any additional premium if the Overall Limit of Insurance is sufficient to comply with the Coinsurance Condition. If not, the Overall Limit of Insurance should be increased and the appropriate additional premium charged.

36. VALUE REPORTING FORM

Paragraph F.2.a. is replaced by the following:

F. Reporting Rules

2. New Locations And Incidental Locations

a. Use Florida Policy Changes Endorsement IL 12 07 to add a new location if the limit of insurance applying to the new location exceeds the limit of insurance, if any, specified for an acquired location.

Paragraph G.1.b.(2) is replaced by the following:

(2) When cancellation is not in accordance with Rule 11.A., compute the return or additional premium as follows:

(a) Calculate the pro rata earned premium for the number of days the policy was in force.

(b) Calculate the short rate earned premium by adding to the premium developed in Paragraph (a) one tenth of the difference between the full premium and the pro rata earned premium.

(c) If the short rate earned premium is less than the provisional premium, the difference is the return premium, subject to a minimum return premium of 90% of the pro rata unearned premium.

(d) If the short rate earned premium is greater than the provisional premium, the difference is the additional premium payable by the insured.

36. VALUE REPORTING FORM


The Value Reporting Form is intended for insureds with fluctuating values or changing locations. The form requires periodic submissions of reports of values. Provisional premium is charged at the beginning of the policy year, subject to adjustment at the end of the year based on the values reported. Full recovery of loss is dependent upon timely and accurate reports of values and adequate limits of insurance. The form may also be used to provide coverage for reported, acquired and incidental locations.

B. Forms

1. Attach Value Reporting Form CP 13 10 to Building And Personal Property Coverage Form CP 00 10 or to Condominium Commercial Unit-Owners Coverage Form CP 00 18.

2. Use Agricultural Products Storage Endorsement CP 13 30 with Endorsement CP 13 10 to cover stocks of grain and other agricultural products at grain elevators or other storage locations. Grain or grain products may be covered under Endorsement CP 13 10 when on the premises and part of stock at a manufacturing, warehousing, processing or finishing plant. Rice, flaxseed, beans, soybeans, seeds or seed grain may also be covered.

3. Use Reported-Acquired-Incidental Locations Schedule Endorsement CP DS 04 to designate the limits of insurance for reported, acquired and incidental locations if not shown on the Declarations.

C. Eligible Property

Coverage may be written to apply to:

1. Merchandise and stock (raw, in process or finished) owned by the insured.

2. All business personal property owned by the insured.

3. Personal property owned by others in the care, custody or control of the insured.

Coverage may apply in one or more states on a specific or blanket coverage basis.

D. Ineligible Property

Property located at any risk owned or controlled by the insured and rated under the Rating Plan For Highly Protected Or Superior Risks.

E. General Rules

1. Coinsurance

The Coinsurance Condition of Forms CP 00 10 and CP 00 18 does not apply to Endorsement CP 13 10. Instead, the Full Reporting provision of Endorsement CP 13 10 applies.

2. Definitions

a. Acquired Location

Acquired Location means any location in the policy territory acquired after the inception of the policy.

b. Gross Average Values

Gross Average Values are average values prior to deducting specific insurance.

c. Incidental Location

Incidental Location means any location not shown in the Declarations with values of $25,000 or less other than acquired locations and reported locations.

d. Net Average Values

Net Average Values are average values after deducting specific insurance.

e. Reported Location

Reported Location means any location, other than those shown in the Declarations, that have been reported to the company at the inception of the policy. (This provision only applies when using multiple location average rating.)

f. Seasonal Risk

(1) A risk is seasonal if a suspension of operations or a period of inactivity during part of each year is usual and incidental to the occupancy of the risk.

(2) The following are examples of seasonal risks:

(a) Beans, seed and seed grain storage.

(b) Oil tanks.

(c) Resort area risks.

g. Specific Insurance

Specific Insurance is other insurance that:

(1) Covers the same covered property to which Endorsement CP 13 10 applies; and

(2) Is not subject to the same plan, terms, conditions and provisions as contained in Endorsement CP 13 10.

For example, the insured has personal property valued at $500,000. One policy is written on this property in an amount of $200,000, without a reporting form. Another policy is written on the same property for a limit of $300,000, to which a reporting form applies. The non-reporting policy will be considered specific insurance with respect to the reporting policy.

3. Replacement Policies

If, at the request of the company, a policy is cancelled or its percentage of the total contributing insurance is changed, a replacing policy may be issued on a pro rata basis for the period from the date of the cancellation or change to the common expiration date at the rate(s) last promulgated.

4. Percentage Of Participation

The percentage of the company's participation must be identical for all locations covered under a policy.

5. Policy Periods Greater Than One Year

For policies written:

a. On a continuous basis, or

b. For a specific period greater than one year,

compute the provisional premium and final premium annually on the basis of the rates in effect and the locations and values to be covered, as of the anniversary date of the policy.

6. Determination Of Net Average Values For Provisional Premium On Renewal Policies

a. Determine the gross average values as follows:

Gross Average Values

Reporting Period

Average Value Determination

Reporting Period

Average Value Determination

Daily, Weekly or Calendar Month

Annual Accounts. Use the first 8 reports for the first renewal. For subsequent renewals, use 12 consecutive reports at least 8 of which are under current policies.

Three Year Accounts.

Use 12 consecutive reports. The first report to be used is not to be prior to the 21st report.

Daily or Weekly

Reporting Periods. Use only the values reported for the last report date in each month.

Quarterly or

Policy Year Annual Accounts. Use the values shown for the first eight report dates, if available. For subsequent renewals, use values shown for 12 consecutive report dates at least 8 of which are under current policies, if available.

Three Year Accounts.

Use values shown for 12 consecutive report dates. The first report date to be used is not to be prior to the 21st report date.

Table 36.E.6.a. Gross Average Values

b. Except as noted in Paragraphs d. and e., calculate the gross average value for each location by dividing the total of the values reported by the number of reports or report dates required.

c. Subtract from the gross average value the amount of specific insurance to be reported to obtain the net average value. Prorate specific insurance not in force for the full policy year.

d. If a newly acquired location is to be a permanent location, calculate gross average values for it by dividing the total of the values reported by the number of reports in which values for the location were included.

e. If a permanent location has been discontinued and no value was reported in the last report, omit such location. Omit any location that is included in the last report of values if it is specifically excluded.

F. Reporting Rules

1. Reporting Provisions

The provisions of Endorsement CP 13 10 require the insured to report full values at each location and to pay premium on the net average values even though the net average values may be greater than the Limit of Insurance.

a. Filing Of Reports

(1) The Value Reporting Form requires that reports be filed within 30 days of the end of each reporting period, subject to the exception in Paragraph (2) of this rule.

(2) The first report for a new Value Reporting Form policy (not a renewal) must be filed within 60 days of the end of the first reporting period. The second report is due within 30 days of the end of the second reporting period, concurrent with the first report. Each subsequent report is due within 30 days of the end of each subsequent reporting period.

This exception does not apply to policies written subject to a Policy Year (PR) reporting period or to a Quarterly (QR) reporting period (unless the inception date of the QR policy is in March, June, September or December).

(3) If the policy is cancelled or not renewed, a report must be filed within 30 days of the date of expiration.

(4) Each report must show the values on the dates required by the reporting period. The dates for which values are shown on each report are the report dates.

b. Reporting Periods

The following reporting periods may be used with Endorsement CP 13 10:

(1) Daily (DR)

(2) Weekly (WR)

(3) Monthly (MR)

(4) Quarterly (QR)

(5) Policy Year (PR)

Insert the symbols shown in lieu of a coinsurance percentage in the Declarations. Refer to Endorsement CP 13 10 for a description of these reporting periods.

2. New Locations And Incidental Locations

a. Use Policy Changes Endorsement CP 12 01 to add a new location if the limit of insurance applying to the new location exceeds the limit of insurance, if any, specified for an acquired location.

b. If a limit of insurance applies to incidental locations, the insured must submit a signed statement showing all such values, as of the inception and each anniversary date of the policy, separately for each state.

3. Reporting Date Modification

a. The value reporting provisions of Endorsement CP 13 10 may be modified by agreement in writing between the insured and the company provided all the following requirements are met:

(1) Definite report dates, at least once a month.

(2) Not more than 365 days between report due dates.

b. The period between the end of the reporting period and the date the report is due may be modified subject to company approval.

G. Premium Determination

1. General Rules

a. Incidental Locations Rates

When a limit of insurance is shown for Incidental Locations in the Declarations or on Endorsement CP DS 04, use the rates shown in the multistate rates.

b. Cancellation

The following is added to Rule 11. for annual and continuous policies written on a reporting form basis:

(1) Average values must be determined by dividing the total of the values reported at each location in the reports by the number of reports.

(2) When cancellation is not in accordance with Rule 11.A. (and is therefore short rate) compute the return or additional premium as follows:

(a) Calculate the pro rata earned premium for the number of days the policy was in force.

(b) Calculate the short rate earned premium by adding to the premium developed in Paragraph (a) one tenth of the difference between the full and the pro rata earned premium.

(c) If the short rate earned premium is less than the provisional premium, the difference is the return premium.

(d) If the short rate earned premium is greater than the provisional premium, the difference is the additional premium payable by the insured.

c. Changes

If the rate at which the policy is written changes, or if the company percentage of participation changes, during the policy term, values reported for the period during which the rate or percentage of participation was in effect must be averaged. Compute an earned premium on a pro rata basis for each rate or percentage of participation for the time the rate or percentage of participation was in effect.

2. Multiple Location Average Rates Not Used

a. Rating Bases

(1) For specific basis, use 100% coinsurance class or specific rates at each location for all covered causes of loss.

(2) For blanket basis, refer to Rule 34. Use the 100% coinsurance blanket personal property rates for all covered causes of loss.

b. Development Of Provisional Premium

(1) Develop rates for covered causes of loss in accordance with Paragraph a.

(2) For new accounts, multiply the rates developed in Paragraph (1) by .75 of the limit of insurance in hundreds to develop the provisional premium. For seasonal risks, multiply the rates by .3 of the limit of insurance in hundreds to determine the provisional premium.

(3) For renewal accounts, multiply the rates developed in Paragraph (1) by the net average values in hundreds reported in the previous year. (Refer to Paragraph E.6. for determination of net average values.) For the Policy Year Reporting Period, if the net average values for all of the previous years are not available, multiply the rates developed in Paragraph (1) by .75 of the limit of insurance in hundreds (.3 for seasonal risks) to develop the provisional premium for renewal.

(4) For limits of insurance specified for Acquired Locations:

(a) If $50,000 or less - Do not charge additional premium.

(b) If over $50,000 - Charge the rate shown in the multistate rates for all covered causes of loss. This rate applies to the total limit of insurance in hundreds.

(5) For increases in limits of insurance, charge additional provisional premium calculated pro rata (seasonal or non-seasonal) for the unexpired term of the policy year on the amount of increase in the limit of insurance using the rates applying to the location at the time of increase.

(6) For new locations, if the limit of insurance on a new location is greater than the acquired location limit, charge an additional provisional premium for the unexpired term of the policy year calculated using the limit of insurance in hundreds and the rates applying to the new location.

c. Development Of Final Premium

(1) For each location, compute the net average values based on reported specific insurance and the total values reported for the policy year.

(2) Calculate the final earned premium for each covered cause of loss at each location by multiplying the rates by the net average values in hundreds.

(3) For an Acquired Location, use the rates applicable when the location was first reported.

(4) If the sum of the premiums for the individual locations is greater than the provisional premium, charge the insured for the excess premium.

(5) If the sum of the premiums for the individual locations is less than the provisional premium, refund any excess premium paid to the insured.

3. Multiple Location Average Rates Used

a. Rating Bases

(1) For specific basis, calculate 100% coinsurance personal property multiple location average rates for each covered cause of loss using specific or class rates and net average values in hundreds as determined in Paragraph E.6. at each location.

(2) For blanket basis, when one limit of insurance is to apply over more than one location, see Rule 34. Use the 100% coinsurance blanket personal property rates for all covered causes of loss to develop the multiple location average rates.

(3) If ISO is to calculate Multiple Location average rates, the company must submit a completed Multiple Location/Premium And Dispersion Credit Application Form CP 13 70 for all new accounts. See also Rule 19.

b. Rate Development

(1) Calculation

For each covered cause of loss, use the following formula:

MULTIPLE LOCATION AVERAGE RATE =

TOTAL PREMIUM FOR ALL LOCATIONS TOTAL NET AVERAGE VALUES FOR ALL LOCATIONS (IN HUNDREDS)

(2) Determination Of Total Premium For All Locations

Multiply the net average values in hundreds at each location except Miscellaneous Locations (see Rule 15.D.) by the 100% coinsurance rates for each cause of loss.

Use the limit of insurance as the net average value if the gross average value exceeds the sum of the limit of insurance and the amount of specific insurance for any location.

(3) Determination Of Total Net Average Values For All Locations

Total the net average values for all locations excluding specific insurance and the average values for Miscellaneous Locations. If the limit of insurance is used as the basis of premium rather than the average value, include the limit of insurance instead of the net average value in determining the total.

(4) Multiple Location Average Rate

(a) The multiple location average rate is based on the 100% coinsurance specific or blanket rate for each covered cause of loss.

(b) Calculate the multiple location average rate for each covered cause of loss by dividing the total of the individual location premiums for each covered cause of loss by the total of the net average values in hundreds for that cause of loss for all locations, except for the net average values at Miscellaneous Locations.

(c) For deductible credits, apply the factors for Deductible Insurance to the applicable rates for covered property prior to calculating the multiple location average rate. See Rule 81.

(d) Multiple location average rates may be modified by use of the Multiple Location Premium and Dispersion Credit Plan. Refer to company for further information and application of this Plan.

(e) Addition Of A Cause Of Loss During Policy Year

(i) If a cause of loss is added during the policy year, calculate the multiple location average rate for that cause of loss by using the values that were used in the original calculation. If the added cause of loss involves a location added after the policy inception or anniversary date, use estimated average values or an average of the reported values at that location. If reported values are used, use the number of reports in accordance with the provisions of Paragraph E.6.

(ii) Apply the rates in effect for the added cause of loss as of the date of its addition.

(5) Recomputation Of Rates

Multiple location average rates must be recomputed:

(a) At each policy anniversary date, for coverage afforded in the following policy year.

(b) Whenever there is a material change in conditions causing the previous rate to be inequitable. Endorse policies in force to show the new rates effective on the date ISO or the company receives notice of the changed conditions.

c. Development Of Provisional Premium

(1) New Accounts

Obtain the gross average values for each location from Form CP 13 70. Subtract from the gross average value the amount of specific insurance to be reported to obtain the net average value.

(2) Renewal Accounts

Refer to Paragraph E.6.

(3) Provisional Premium

For each covered cause of loss, develop the provisional premium by multiplying the multiple location average rates by not less than the larger of the following:

(a) The sum of the net average values in hundreds at all locations including Miscellaneous Locations.

(b) The highest limit of insurance in hundreds at any one location except for seasonal risks.

(4) Increases In Limits Of Insurance

The limit of insurance may be increased without any additional provisional premium if the increased limits do not exceed the amount used in determining the provisional premium in Paragraph (3). Charge additional provisional premium if the amount upon which the provisional premium is based is to be increased.

(5) New Locations

New locations may be added to the policy without any additional provisional premium if the limits of insurance do not exceed the amount used in determining the provisional premium in Paragraph (3). Charge additional provisional premium if the amount upon which the provisional premium is based is to be increased.

d. Development Of Final Premium

(1) Compute the net average values at each location for the policy year.

(2) Total the net average values at all locations, including:

(a) Reported Locations,

(b) Acquired Locations, and

(c) Incidental Locations.

(3) Multiply the multiple location average rates by the total average values in hundreds at all locations (including the values at Miscellaneous Locations) for each covered cause of loss to determine the final premium.

The sum of the premiums is the final earned premium.

(4) If the final earned premium is greater than the provisional premium, charge the insured for the excess premium.

(5) If the final earned premium is less than the provisional premium, refund any excess premium paid to the insured.

H. Rating Example


37. LOSS PAYABLE AND ADDITIONAL INSURED PROVISIONS

A. Explanation

Property damage policies may be endorsed to be payable to a loss payee as well as the insured or to add a building owner as an additional named insured.

B. Description Of Coverage

1. The following Loss Payable provisions are available:

a. Loss Payable and Building Owner Loss Payable, when it is intended to make the loss payable to the insured and a named loss payee as their interests may appear. Under these provisions, the rights of the loss payee are subject to the company's defenses against the insured.

b. Lender's Loss Payable, to protect the interest of a named lender. This provision is applicable when a mortgageholders clause is not applicable and where the interest has been established by warehouse receipts or other suitable documentary evidence. Under this provision, the rights of the lender are independent of any breach of condition by the insured.

c. Contract Of Sale, to be used when duplicate interests exist in property undergoing transfer by sale.

2. The building owner can be named as an additional insured for Building Coverage under a tenant's property damage insurance. When this option is used, do not use the Building Owner Loss Payable provision described in 1.a.

C. Form

1. For Loss Payable Provisions, use Loss Payable Provisions Endorsement CP 12 18.

2. For Additional Insured - Building Owner, use Additional Insured - Building Owner Endorsement CP 12 19.

D. Rule

Do not charge for attaching Endorsement CP 12 18 or CP 12 19.

38. BUILDING AND PERSONAL PROPERTY COVERAGE OPTIONS

Paragraph H. is replaced by the following:

H. Loss Assessment

1. Description Of Coverage

Coverage may be provided for the unit-owner's share of an assessment charged during the policy period to all unit-owners by the Condominium Association, provided that the assessment is for damages caused by a covered cause of loss. Activate the Loss Assessment option in the Florida Changes - Condominium Commercial Unit-owners Optional Coverages Endorsement.

2. Form

Loss assessment coverage may be provided by using Florida Changes - Condominium Commercial Unit-owners Optional Coverages Endorsement CP 04 21 with:

a. Condominium Commercial Unit-owners Coverage Form CP 00 18; or

b. Standard Property Policy CP 00 99 when either Condominium Commercial Unit-owners Changes - Standard Property Policy Endorsement CP 17 98 or Florida Changes - Commercial Units In Residential Condominiums (Including Option For Additional Covered Property) - Standard Property Policy Endorsement CP 17 96 is attached. Refer to Rule 14. in the state exceptions for information on condominium risks written under the Standard Property Policy.

3. Rules

a. Schedule

Indicate the following in the Schedule of Endorsement CP 04 21 or in the Declarations:

(1) Each unit to be covered;

(2) The Additional Premium;

(3) A limit of insurance for each covered unit; and

(4) The deductible for Loss Assessment Coverage. (Refer to Paragraph 3.b.)

b. Deductible

(1) Use the deductible stated in Rule 33.A. Enter the deductible amount for Loss Assessment Coverage in the Schedule of Endorsement CP 04 21. The deductible applies per occurrence, to each unit.

(2) Deductible options do not apply.

4. Additional Premium

See multistate rates.

Paragraph J. is replaced by the following:

J. Miscellaneous Real Property


Coverage is provided for miscellaneous real property that the unit-owner must insure according to the Condominium Association Agreement by activating the Miscellaneous Real Property Option in the Florida Changes - Condominium Commercial Unit-owners Optional Coverages Endorsement CP 04 21.

2. Definition

Miscellaneous real property is condominium property that is not included under Your Business Personal Property under Condominium Commercial Unit-owners Coverage Form CP 00 18 and that pertains to the individual unit-owner's unit.

3. Form

Use Endorsement CP 04 21 with Form CP 00 18.

4. Rules

a. Schedule


(1) Each unit to be covered; and

(2) A limit of insurance and additional premium for each covered unit.

b. Other Insurance

If the Condominium Association has insurance covering the same property, this insurance is excess whether the other insurance is collectible or not.


Charge the rate shown in the multistate rates per $100 of insurance for all covered causes of loss.

6. Commercial Units In Residential Condominiums

Rule 14. in the state exceptions provides an alternative means of insuring miscellaneous real property associated with a commercial condominium unit located in a residential condominium. Determine the rate and additional premium using the loss cost provided under Rule 38.J.5. in the multistate rates.

The following is added to Paragraph T.4.b.:

T. Spoilage Coverage


b. Rates

(3) If Power Outage is a Covered Cause of Loss, multiply the Power Outage Coverage rate by 1.25. If both Power Outage and Breakdown or Contamination are Covered Causes of Loss, multiply the combination rate by 1.10.

38. BUILDING AND PERSONAL PROPERTY COVERAGE OPTIONS

A. Agreed Value


Under this optional coverage, the Coinsurance Clause is suspended for insureds who agree to carry a limit of insurance equal to at least 80% (for specific insurance) or 90% (for blanket insurance) of the value of their property. See Rule 51.A. for Business Income Coverage.

2. Ineligibility

a. Real or Personal Property written on a reporting form basis.

b. Builders' Risks.

3. Rules

a. Coinsurance

(1) Specific Coverage

Indicate 80% or higher Coinsurance in the Declarations.

(2) Blanket Coverage

Indicate 90% or higher Coinsurance in the Declarations.

b. Statement Of Values

Use Statement Of Values Endorsement CP 16 15 or its equivalent for filing of values by the insured with the company. The values must be the full actual cash values (or replacement cost values if the Replacement Cost Optional Coverage applies) and must be filed annually by the insured.

c. Valuation

(1) Use replacement cost values for properties insured on a replacement cost basis.

(2) Use actual cash values otherwise.

d. Effective Period

Agreed Value provisions are effective for up to one year.

(1) Show the expiration date of the agreed value in the Declarations.

(2) Coinsurance provisions automatically apply if the agreed value is not renewed.

(3) Endorse the policy with a revised expiration date and values based on a new Statement of Values to renew the agreed value.

4. Rate Modification

a. For insurance to value higher than 80%, refer to the Causes of Loss Form Rules 70. through 74. for calculating a 90% or 100% coinsurance rate; and

b. Multiply the 80% or higher coinsurance rate by 1.05.

B. Alcoholic Beverages Tax Exclusion


This form is to be used to exclude the value of Federal Excise taxes and custom duties paid on alcoholic beverages held for sale. Public Law 94-423 permits the Treasury Department to refund such taxes and duties paid on alcoholic beverages damaged by causes of loss other than theft. In addition, state or local taxes may also be refundable.

2. Form

Use Alcoholic Beverages Tax Exclusion Endorsement CP 99 10.

3. Rules

a. Special Theft Limit

Endorsement CP 99 10 may be used with any personal property form that either includes or excludes Theft Coverage. When the Causes Of Loss - Special Form applies and a limit for theft is provided under the Schedule of Endorsement CP 99 10, the following rules apply:

(1) Show the limit of insurance for all causes of loss other than theft in the Declarations (based on values of personal property minus value of taxes and custom duties).

(2) Show the limit of insurance for theft in Endorsement CP 99 10 on the schedule (based on values of personal property including value of taxes and custom duties).

b. Exclusion

Do not use Endorsement CP 99 10 to exclude taxes paid on bulk distilled spirits since Distilled Spirits And Wines Market Value Endorsement CP 99 05 already permits this. However, Endorsement CP 99 10 may be used with Endorsement CP 99 05 on policies covering against theft.


a. Causes Of Loss Other Than Theft

Compute the premium based on a limit of insurance which does not include the value of taxes and custom duties.

b. Theft

Compute the premium for theft based on a limit of insurance which includes the value of taxes and custom duties.

5. Rating Example

Refer to the rating example for development of Additional Premium Under Causes Of Loss - Special Form CP 10 30.


C. Brands And Labels

1. Form

Use Brands And Labels Endorsement CP 04 01. This endorsement may be attached to any property damage policy covering merchandise. Under the terms of this endorsement, the insurer may take the damaged property at an agreed or appraised value, and the insured may then stamp "salvage" on the merchandise or may remove brands and labels.


Multiply the rates for each covered cause of loss by 1.1 subject to the maximum increase shown in the multistate rates for each covered cause of loss.

D. Ordinance Or Law Coverage


The following coverages respond to losses that result from enforcement of ordinances or laws regulating demolition and/or restoration of a building following physical damage to that building by a covered cause of loss. In the situation where the underlying property damage losses were caused by covered and excluded causes of loss, loss payment for ordinance or law coverages may be proportioned accordingly.

Coverage does not include loss due to an ordinance or law with which the insured was required to comply before loss and failed to comply. Further, coverage applies only in response to the minimum requirements of an ordinance or law.

a. Coverage A - Loss To The Undamaged Portion Of The Building

The undamaged portion of a building will suffer a loss in value if an ordinance or law requires demolition following direct physical loss to another part of the building. Coverage A covers the loss in value of the undamaged portion of the building. (Coverage A does not cover the demolition costs. For such coverage, refer to Coverage B.)

Example of Coverage A:

Coinsurance: 80% Value of the building at time of loss: $100,000 Limit of Insurance: $80,000 Amount of loss attributable to direct physical damage (e.g., fire):

$60,000

Actual loss: Entire building (due to ordinance which requires

demolition of the building)

Without Ordinance Or Law Coverage Endorsement CP 04 05, only the $60,000 loss would be covered, subject to all applicable policy provisions including coinsurance and the deductible. Under Endorsement CP 04 05, Coverage A covers the remaining loss of value, up to the limit of insurance on the building, subject to all applicable policy provisions. In this example, the policy endorsed with Endorsement CP 04 05 would pay $80,000.

b. Coverage B - Demolition Cost

Coverage B covers the costs to demolish the undamaged portions of the building.

c. Coverage C - Increased Cost Of Construction

(1) Following a physical loss to the building, Coverage C covers the increased expenses to repair, replace, reconstruct or remodel the damaged or undamaged parts of that building so that it complies with current building, zoning or land use laws or ordinances.

(2) For each described building covered under the policy, Building And Personal Property Coverage Form CP 00 10 and Condominium Association Coverage Form CP 00 17 include coverage for the Increased Cost of Construction up to the lesser of $10,000 or 5% of the building's limit of insurance (under blanket insurance, the 5% criterion applies to the building's value times the coinsurance percentage). Such coverage applies only to damaged parts of the property. This limited coverage should be taken into account when selecting a limit of insurance for Coverage C under Endorsement CP 04 05.

2. Form

Use Endorsement CP 04 05.

3. Rules

a. Schedule Entry

Indicate in the Schedule of Endorsement CP 04 05 which coverage(s) apply:

(1) Coverage A only; or

(2) Coverage C only; or

(3) Coverages A and B; or

(4) Coverages A, B and C.

b. Limits Of Insurance

(1) Coverage A

Coverage A is not subject to a separate limit of insurance and does not increase the limit of insurance on the building. When Coverage A applies to a loss, the limit of insurance on the building (as shown in the Declarations) covers the physical damage and the loss in value of the undamaged portion to the building.

(2) Coverages B And C

(a) In the Schedule of Endorsement CP 04 05, enter individual limits of insurance for Coverage B and/or Coverage C; or

(b) A combined limit of insurance may be written for Coverages B and C, in lieu of individual limits. Enter the combined limit in the Schedule of Endorsement CP 04 05.

c. Coinsurance

(1) Minimum coinsurance of 80% applies to the building when Endorsement CP 04 05 is used. If the policy's Replacement Cost Optional Coverage applies (whether or not Coverage C also applies), this coinsurance requirement is based on the replacement cost of the current building. If the Replacement Cost Optional Coverage does not apply to the building, the coinsurance requirement is based on the actual cash value of the current building.

(2) The Coinsurance condition does not apply to the limit(s) of insurance selected for Coverages B and C.

d. Replacement Cost Coverage

When Coverage C applies to a building, activate the Replacement Cost Coverage of the underlying property damage coverage form, for that building. The Replacement Cost Coverage is activated by entry in the Declarations of the policy.

e. Additional Covered Property

Coverage C includes the increased cost of construction for the following (but such coverage does not increase the Coverage C Limit of Insurance):

(1) Cost of excavations, grading, backfilling and filling;

(2) Foundation of the building;

(3) Pilings; and

(4) Underground pipes, flues and drains.


a. Causes Of Loss Other Than Earthquake

(1) Coverage A - Coverage For Loss To The Undamaged Portion Of The Building

Multiply the 80% or higher coinsurance building rates by 1.15 for each covered cause of loss. The resulting rates are the rates for Building Coverage including Coverage A.

(2) Coverage B - Demolition Cost Coverage

Use the 80% coinsurance building rates. Multiply the rates by the limit of insurance in hundreds for Demolition Cost Coverage to obtain the additional premium for each covered cause of loss. Make no rate modifications for coinsurance or for other coverage options.

(3) Coverage C - Increased Cost Of Construction Coverage

Use the 80% coinsurance building rates. Multiply the rates by the limit of insurance in hundreds for Increased Cost Of Construction to obtain the additional premium for each covered cause of loss. Make no rate modifications for coinsurance or for other coverage options.

b. Earthquake

Use the same procedures as in Paragraph a.; except change the factor in Paragraph a.(1) to 1.85.

c. Rating Example

See the Rating Examples Appendix.

5. Coverage Example

a. Assume the following:

(1) An insured building of masonry construction has a replacement cost value of $400,000 and an actual cash value of $350,000.

(2) This building is located in an area now zoned for superior construction. The owner knows that substantial damage to the building - assume 50% destruction - will trigger the local ordinance and the entire building will have to be destroyed.

(3) Estimated cost of demolition of 50% of the structure (the undamaged portion) is $30,000.

(4) The additional cost to replace the building with a new structure to comply with the local ordinance and land use laws is $200,000.

b. For purposes of illustration, the following are possible ways of developing the limits of insurance necessary when the Ordinance Or Law Coverage Endorsement is attached.

c. Example 1:

Replacement Cost Coverage Option applies.

To provide coverage for:

(1) Replacement cost value of the current building (including loss of value of the undamaged portion), choose a Building limit of $400,000.

(2) Additional cost to replace the building to comply with an ordinance or law, choose an Increased Cost of Construction limit of $200,000.

(3) Cost to demolish the undamaged part of the existing building, choose a Demolition Cost limit of $30,000.

d. Example 2:

Replacement Cost Coverage Option Does NOT apply.


(1) Actual cash value of the current building (including loss of value of undamaged portion), choose a Building limit of $350,000.

(2) Cost to demolish the undamaged part of the existing building, choose a Demolition Cost limit of $30,000.

E. Pollutant Clean Up And Removal Additional Aggregate Limit Of Insurance


This form provides an additional annual aggregate limit of insurance applicable exclusively to the costs to remove pollutants from land or water at the insured's premises in excess of the $10,000 Additional Coverage annual aggregate in the property damage forms.

2. Form

Use Pollutant Clean Up And Removal Additional Aggregate Limit Of Insurance Endorsement CP 04 07.

3. Rules

a. Causes Of Loss

Endorsement CP 04 07 must be written using the same causes of loss form as the underlying property damage insurance.

b. Specific Limit

This form must be written for a specific limit of insurance.

c. Minimum Deductible

The minimum deductible is $1,000. The application of the deductible is independent of the direct damage deductible. But the deductible shown in the endorsement for each described premises should not be less than the largest direct damage per occurrence deductible applicable at that premises.


Determine an additional premium for each described premises by multiplying the following rates by the Endorsement CP 04 07 limit of insurance in hundreds. If there is more than one building at the described premises, use the highest rate unless the buildings on the premises are average rated, in which case use the average rate.

a. Basic Causes Of Loss

Multiply the 80% coinsurance Group I and Group II building rates by .50.

b. Broad Causes Of Loss


c. Special Causes Of Loss


d. Causes Of Loss - Earthquake Form

Multiply the 80% coinsurance building rate by .75.

5. Optional Deductibles

Deductibles greater than $1,000 may be used by multiplying the rates determined in Paragraph 4. by the following factors prior to additional premium determination:

Deductible Amount

Factor

Deductible Amount

Factor

$ 2,500 .97 5,000 .95 10,000 .90 25,000 .75 50,000 or More Refer to company.

Table 38.E.5. Optional Deductibles

F. Debris Removal Additional Insurance


This form provides an additional amount of insurance which applies to expenses incurred in the removal of debris of the covered property at each location in any one occurrence due to a covered cause of loss. This form does not apply until recovery under basic property damage coverages is exhausted.

2. Form

Use Debris Removal Additional Insurance Endorsement CP 04 15.

3. Rules

a. Causes Of Loss

Endorsement CP 04 15 must be written for the same causes of loss as the underlying property damage insurance.

b. Other Insurance

If Endorsement CP 04 15 is attached to one policy, it must be attached to all policies providing coverage on the same covered property.

c. Rates And Rate Factors

The rates and rate factors apply to the amount of insurance in excess of $10,000 at each location in any one occurrence.

d. Specific Coverage

Coverage under Endorsement CP 04 15 must be written for a specific amount of insurance at each location to which this form applies. Do not cover on a blanket basis under this form.


Determine an additional premium for each location by multiplying the following rates by the Endorsement CP 04 15 amount of insurance, minus 10,000, in hundreds.

a. Basic Causes Of Loss

Multiply the 80% coinsurance Group I and Group II building rates by .50.

b. Broad And Special Causes Of Loss


c. Causes Of Loss - Earthquake Form


G. Inflation Guard


This optional coverage automatically increases the amount of insurance by a selected percentage. The selected percentage applies proportionally for each day of the policy. Example: For a one year policy written at $100,000 with a 12% annual increase, the amount of increase on the 60th day of the policy would be $100,000 x .12 x (60/365) = $1,973.

2. Eligibility

This option applies only to direct property damage coverage on completed buildings or personal property, written specific or blanket.

3. Rules

a. Effective Date

This option may apply at policy inception or may be endorsed to the policy after the inception date.

b. Mid-Term Changes

When a policy is endorsed to provide an automatic increase in insurance after the inception date of the policy, the amount of increase begins from the effective date of the endorsement and not the effective date of the policy. To determine the additional premium:

(1) Multiply the premium otherwise applicable by the appropriate factor in Table 38.G.4. Additional Premium; and

(2) Multiply the resulting additional premium by the factor developed in (a) or (b):

(a) Applicable to one year and continuous policies:

Number of days in unexpired portion of the policy year ÷ Number of days in policy year

(b) Applicable to three year policies:

Number of days in unexpired portion of the policy term Number of days in policy term


Calculate the additional premium by multiplying the premium otherwise applicable by the appropriate factor in the following table:

Amount Of Factor Annual Increase Annual

Policy 3 Year Policy

2% .01 .03 4% .02 .06 6% .03 .09 8% .04 .12 10% .05 .15 12% .06 .18 For each add'l 2% Add .01 Add .03

Table 38.G.4. Additional Premium

5. Rating Examples


H. Loss Assessment


Coverage may be provided for the unit-owner's share of any assessment charged during the policy period to all unit-owners by the Condominium Association, provided that the assessment is for damages caused by a covered cause of loss. Activate the Loss Assessment option in the Condominium Commercial Unit-Owners Optional Coverages Endorsement.

2. Form

Use Condominium Commercial Unit-Owners Optional Coverages Endorsement CP 04 18 with Condominium Commercial Unit-Owners Coverage Form CP 00 18.

3. Rules

a. Schedule



(2) The Additional Premium;

(3) A limit of insurance for each covered unit; and

(4) The deductible for Loss Assessment Coverage. (Refer to Paragraph 3.b.)

b. Deductible

(1) Use the deductible stated in Rule 33.A. Enter the deductible amount for Loss Assessment Coverage in the Schedule of Endorsement CP 04 18. The deductible applies per occurrence, to each unit.




I. Manufacturers' Consequential Loss Assumption

1. Explanation

This form provides coverage for manufacturers and processors against a reduction in value of the remaining parts of stock in process of manufacture when the reduction is caused by loss to other parts of stock in process of manufacture at the described location.

2. Form

Use Manufacturers' Consequential Loss Assumption Endorsement CP 99 02.

3. Coinsurance



a. Rate

Use the property damage contents rate applicable to the premises where coverage applies, multiplied by the factor in Paragraph b.(1) or b.(2). This modified rate reflects coverage for both direct damage and consequential loss.

b. Factors

(1) Limit Of Insurance For Stock

The factor for Stock is 1.25. Apply the modified rate to the limit of insurance in hundreds for stock. If the policy includes business personal property other than stock, stock and contents other than stock can be written as separate items by using Business Personal Property - Separation Of Coverage Endorsement CP 19 10.

(2) Limit Of Insurance For Business Personal Property

The factor for Business Personal Property is 1.15. If coverage on stock is written under a combined limit of insurance for stock and other contents, apply the modified rate to the limit of insurance in hundreds for Business Personal Property.

c. Blanket Average Rated Policies

The modified rate (contents rate times 1.25 or 1.15 as provided in Paragraph 4.b.) is applied to 100% of values in hundreds in accordance with Rule 34.B.5.a.

J. Miscellaneous Real Property


Coverage is provided for miscellaneous real property that the unit-owner must insure according to the Condominium Association Agreement by activating the Miscellaneous Real Property Option in the Condominium Commercial Unit-Owners Optional Coverages Endorsement CP 04 18.

2. Definition

Miscellaneous real property is condominium property that is not included under Your Business Personal Property under Condominium Commercial Unit-Owners Coverage Form CP 00 18 and that pertains to the individual unit-owner's unit.

3. Form

Use Endorsement CP 04 18 with Form CP 00 18.

4. Rules

a. Schedule



(2) A limit of insurance and additional premium for each covered unit; and

(3) A loss assessment deductible for each covered unit.

b. Other Insurance

If the Condominium Association has insurance covering the same property, this insurance is excess whether the other insurance is collectible or not.


Charge the rate shown in the multistate rates per $100 of insurance for all covered causes of loss.

K. Newly Acquired Property - Increased Limit


The $250,000 per location building limit contained in the Newly Acquired Or Constructed Property Coverage Extension of the Building And Personal Property and Condominium Association Coverage Forms may be increased in accordance with these rules.

2. Form

Use Newly Acquired Or Constructed Property - Increased Limit Endorsement CP 04 25 with Building And Personal Property Coverage Form CP 00 10 or Condominium Association Coverage Form CP 00 17.

3. Rules

a. Building Coverage

Endorsement CP 04 25 applies to building coverage only.

b. Causes Of Loss

Endorsement CP 04 25 must be written for the same causes of loss as the underlying building property damage insurance.

c. Other Insurance

If Endorsement CP 04 25 is attached to one policy, it must be attached to all policies providing coverage on the same covered building property.


Refer to company.

L. Utility Services


Property Damage Coverage may be extended to cover loss of or damage to covered property on the described premises resulting from the failure of utility service relating to:

a. Properties providing water, communication and power supply services.

b. Overhead power transmission and communication lines.

2. Form

Use Utility Services - Direct Damage Endorsement CP 04 17.

3. Rules

Coverage for Utility Services may be written to apply to all covered property or only to certain covered property. In the Schedule of Endorsement CP 04 17, identify the property to which Utility Services coverage applies and identify the service(s) covered. Utility Services coverage may be written:

a. Subject to the limit of insurance otherwise applicable to the property. In such case, do not enter a Utility Services Limit of Insurance in Endorsement CP 04 17; or

b. At a sub-limit, to be identified as the Utility Services Limit of Insurance. Enter the Utility Services Limit(s) of Insurance in the Schedule of Endorsement CP 04 17.


Utility Services rates are provided in the multistate rates. Make a charge for each service for which coverage applies - water supply, communication supply and/or power supply. If coverage for overhead power lines and/or overhead communication lines applies, add the appropriate charge(s) to the Utility Services rates.

Multiply the Utility Services rate(s) by the applicable Limit of Insurance to determine the premium.

M. Peak Season Limit Of Insurance


This form increases for specified periods the limit of insurance for personal property to take care of seasonal increases in values.

2. Form

Use Peak Season Limit Of Insurance Endorsement CP 12 30.

3. Ineligibility

Do not attach this form to reporting form policies.

4. Annual Premium Payment Plan

If the form is attached to a policy written on an annual premium payment plan, the "periods" during which the limit of insurance is increased must not extend beyond the anniversary date of the policy and in no case beyond the expiration date of policy.


a. Calculate the additional premium at pro rata of the annual rate for each period specified in the form times the increase in the limit of insurance in hundreds. See Rule 72. - Rating Examples Appendix for calculating the Special Form Theft contents premium.

b. When the Peak Season option is used for property that is subject to a blanket limit, and blanket average rating applies, calculate a blanket average rate for peak season coverage using the peak season values. Pro rate that blanket average rate based on the peak season period and apply the resulting rate to the difference between the original and peak limits, to obtain the additional premium representing Peak Season's additional coverage.

N. Replacement Cost


a. This optional coverage is selected by appropriate entry in the Declarations. Replacement Cost Coverage covers the actual cost of repairs or replacement without deduction for depreciation, subject to limitations stated in the policy.

b. Personal property of others is not covered under the Replacement Cost option, regardless if written as a separate item or under Your Business Personal Property, unless the Declarations show that the Extension of Replacement Cost to Personal Property of Others also applies. If the Extension is shown as applicable, Replacement Cost Coverage applies to personal

property of others whether written as a separate item or as part of the coverage on the insured's personal property.

2. Eligibility

a. Buildings and permanent machinery, fixtures and equipment that are covered with the building.

b. Business personal property including furniture, fixtures, machinery and equipment.

c. Merchandise and stock if the Including "Stock" option is shown as applicable in the Declarations.

d. Tenants Improvements and Betterments.

e. Personal property of others if the Extension of Replacement Cost to Personal Property of Others is shown as applicable in the Declarations.

3. Rules

a. Coinsurance


b. Blanket Coverage - Mixed Items

Identify in the Declarations which property the replacement cost option applies to in cases of blanket items covering specified property on a replacement cost basis and the balance of the property on an actual cash value basis. The property to be covered on a replacement cost basis must be specifically designated.


a. Use the rates that would otherwise apply to determine the premiums.

b. Blanket average rates must be based upon the replacement cost of the property to be covered on a replacement cost basis and the actual cash value of the balance of the property. The Statement Of Values Endorsement CP 16 15 must specify the basis of coverage - replacement cost or actual cash value.

O. Trees, Shrubs And Plants


Coverage for outdoor trees, shrubs and plants (except as provided in the Coverage Extensions of the property damage forms) may be provided. Use Class Code 1190.

2. Form

Use Outdoor Trees, Shrubs And Plants Endorsement CP 14 30.

3. Rules

a. Ineligibility

Do not use Endorsement CP 14 30 for trees, shrubs and plants grown for commercial purposes or for standing timber.

b. Vehicle Exclusion

Loss by vehicle damage to trees, shrubs and plants may be excluded by appropriate schedule entry on Endorsement CP 14 30.

4. Rates

Refer to the multistate rates section of Rule 85.L.3., Item 22.

P. Vacancy

1. Vacancy Permit


Coverage during a period of vacancy may be extended by these rules beyond the following limitations in:

(1) Form CP 00 10, Form CP 00 17 And Form CP 00 18:

(a) For vandalism, sprinkler leakage, building glass breakage, water damage, and theft or attempted theft, coverage is suspended for periods of vacancy beyond 60 days.

(b) For all other causes of loss, a 15% loss payment penalty applies for periods of vacancy beyond 60 days.

(2) Standard Property Policy CP 00 99:

(a) For Vandalism, coverage is suspended for periods of vacancy beyond 30 days.

(b) For any other covered causes of loss, coverage is suspended for periods of vacancy beyond 60 days.

b. Form

Use Vacancy Permit Endorsement CP 04 50.

c. Rules

(1) Limited Term

The period of extension must not extend beyond the anniversary date of the policy.

(2) Vacancy At Inception

Describe the property as vacant and attach Endorsement CP 04 50 effective from inception of policy.

d. Premium Determination

(1) Additional Charge

Rates for specifically rated and class-rated properties do not include the vacancy charge.

The Vacancy Permit rates described in Paragraph (3) are used to develop Vacancy Permit premiums for the various causes of loss. The Vacancy Permit premiums are charged in addition to the cause of loss premiums developed in Rules 70., 71., 72., etc.

(2) Proportional Application

The additional premiums for the Vacancy Permit must reflect the selected permit period shown in the Schedule of Endorsement CP 04 50. The Vacancy Permit rates are annual rates; therefore the resulting Vacancy Permit premiums must be reduced proportionally for periods less than 365 days.

(3) Rating Procedure

Multiply the applicable rate by the limit of insurance in hundreds to develop the additional premium for the Vacancy Permit for each applicable cause of loss category. (The Vacancy Permit premiums are charged in addition to the cause of loss premiums developed in Rules 70., 71., 72., etc.)

(a) Forms CP 00 10, CP 00 17 And CP 00 18:

(i) Causes Of Loss - Basic Form

Multiply the current Group I and Group II rates by .13 to develop the Vacancy Permit Basic rates. If this calculation produces a Group I or Group II rate that is less than the minimum rate developed from information in the multistate rates, use the minimum rate. This procedure applies

separately to Basic Group I and Group II. Minimum rates apply to Basic Group I (Special Vandalism Classes and other than Special Vandalism Classes) and Basic Group II.

Special Vandalism Classes means property classified as of the policy inception or last anniversary date under one of the following codes:

0580 0834 1051 0742 0841 1052 0743 0843 1150 0744 0844 1180 0745 0846 1185 0746 0900 1190 0747 0951 1650 0833 0952

(ii) Causes Of Loss - Broad Form, Causes Of Loss - Special Form, Causes Of Loss - Earthquake Form

Use the Vacancy Permit rate developed from information in the multistate rates.

The Broad or Special Form premium and the Earthquake premium are in addition to the Vacancy Permit premiums for the Basic causes of loss.

(iii) Other Causes Of Loss

Multiply the current rate by .10. The premiums for other causes of loss are in addition to the Vacancy Permit premiums for the Basic, the Broad or Special and the Earthquake causes of loss.

(b) Form CP 00 99 - Standard Property Policy

(i) Multiply the current Group I and Group II rates by .40 to develop the Vacancy Permit rates.

(ii) If Vandalism is a covered cause of loss, also use the Vandalism Vacancy Permit rate developed from information in the multistate rates. This charge is in addition to the vandalism charge contained in the current Group I rate.

2. Vacancy Changes


With respect to a policy issued to the owner or general lessee of a building, the building is considered vacant unless at least 31% of its total square footage is:

(1) Rented to a lessee or sub-lessee and used by the lessee or sub-lessee to conduct its customary operations; and/or

(2) Used by the building owner to conduct customary operations.

The requirement of 31% may be reduced to a minimum of 10%.

b. Form

(1) Use Vacancy Changes Endorsement CP 04 60. Enter the revised minimum percentage (from 10% to 30%) in the Schedule of Endorsement CP 04 60.

(2) Endorsement CP 04 60 may be used with the following coverage forms: Forms CP 00 10,CP 00 17, CP 00 18, CP 00 70 and CP 00 99.

c. Rules

(1) There is no rate modification for Endorsement CP 04 60.

(2) Vacancy Changes Endorsement CP 04 60 and Vacancy Permit Endorsement CP 04 50 may not be written on the same property.

Q. Value Clauses


These clauses may be used to modify the term "Actual Cash Value" as it relates to stock or personal property of others in the Valuation Condition of Form CP 00 10 and Form CP 00 18.

2. Forms

The following clauses may be used:

a. Manufacturer's Selling Price Endorsement CP 99 30 (for manufacturers finished stock only).

b. Market Value-Stock Endorsement CP 99 31 (not to be used for wines and distilled spirits).

c. Distilled Spirits And Wines Market Value Endorsement CP 99 05.

d. Storage Or Repairs Limited Liability Endorsement CP 99 42.

3. Rule

These forms apply to personal property items.

R. Functional Building Valuation


Functional Building Valuation Endorsement CP 04 38 provides coverage for specifically scheduled buildings which can be replaced with similar property that performs the same function as currently used but that is less costly. Coverage is provided:

a. On a functional replacement cost basis when repair or replacement is contracted for within 180 days of the loss or damage.

b. On a market value basis if repair or replacement is not contracted for within 180 days of the loss or damage.

Ordinance or Law Coverage is also provided. Refer to Paragraph D.1. for a description of this coverage.

2. Forms

Attach Endorsement CP 04 38 to Form CP 00 10, or Form CP 00 17.

3. Eligibility

Applicable to buildings.

4. Rules

a. Schedule

Indicate the following in the Schedule or on the Declarations for each item to be covered:

(1) A specific description of the property and its location.

(2) The Limit of Insurance.

b. Coinsurance

Not applicable.

c. Blanket Insurance

Not applicable.

d. Other Insurance

(1) If other insurance on the building is subject to the same plan, terms, conditions and provisions as this Functional Building Valuation insurance, then the amount contributed by this Functional Building Valuation insurance is determined on a pro rata basis.

(2) If there is other insurance which does not meet the criteria in Paragraph (1), then the Functional Building Valuation insurance is excess.


Determine the premium for Functional Building Valuation for each cause of loss by multiplying the 80% coinsurance building rate by 1.30.

6. Coverage Example

a. Assume the following:

(1) The building to be insured is an old, fully equipped factory building, with a replacement cost of $2,000,000, which the insured uses as a warehouse.

(2) The insured could build a new building to be used for the same purpose for $1,000,000.

(3) Substantial damage to the building (50% destruction) will trigger a local ordinance and the entire building will have to be destroyed.

(4) Estimated cost of demolition of 50% of the building (undamaged portion) is $30,000.

(5) Additional cost to install sprinklers to comply with a local ordinance is $200,000.

b. For purposes of illustration, the following is a possible way to develop the Functional Building Valuation Limit of Insurance.


(1) The cost to replace the existing building with a building that is functionally equivalent ... $1,000,000.

(2) Cost to demolish the undamaged part of the existing building after loss occurs ... $30,000.

(3) Additional cost to comply with ordinance ... $200,000.

Functional Building Valuation Limit of Insurance would be $1,230,000 ($1,000,000 + $30,000 + $200,000).

S. Functional Personal Property Valuation (Other Than Stock)


Functional Personal Property Valuation (Other Than Stock) Endorsement CP 04 39 provides coverage for specifically scheduled item(s) of personal property which can be replaced with similar property that performs the same function as currently used. Coverage is provided:

a. On a functional replacement cost basis when repair or replacement is contracted for within 180 days of the loss or damage.

b. On a market value basis if repair or replacement is not contracted for within 180 days of the loss or damage.

2. Form

Attach Endorsement CP 04 39 to Forms CP 00 10, CP 00 17 or CP 00 18.

3. Rules

a. Application

This form applies to personal property other than stock.

b. Coinsurance

Not applicable.

c. Blanket Insurance

Not applicable.

d. Personal Property

Item(s) of personal property scheduled in this endorsement should be excluded from Your Business Personal Property.


Determine the premium for each cause of loss by multiplying the 80% coinsurance personal property rate by 1.25.

5. Coverage Examples

a. A printing company is currently using an antiquated printing press with an actual cash value of $50,000. If this press were destroyed, replacement with an identical press would be

impossible. The closest equivalent type of property available is a two-color printer which would cost $100,000. Using Endorsement CP 04 39 and specifically scheduling the printing press, the insured could choose a limit of insurance of $100,000 to have coverage for the cost of the newer printer.

b. A company is currently using a computer purchased 5 years ago for $10,000. If this computer were destroyed, the cost to replace this computer with one that performs the same functions would be $3,000, due to technological advancements. Using Endorsement CP 04 39 and specifically scheduling the computer, the insured could choose a limit of $3,000 to have coverage for the cost of the newer computer.

T. Spoilage Coverage


Direct damage may be extended on the Building And Personal Property Coverage Form CP 00 10 and Condominium Commercial Unit-Owners Coverage Form CP 00 18 for spoilage of perishable stock caused by one or both of the following:

a. Breakdown or Contamination, meaning change in temperature or humidity resulting from mechanical breakdown or failure of equipment, including contamination of stock by the refrigerant.

b. Power Outage, meaning change in temperature or humidity resulting from on or off-premises power failure.

2. Form

Use Spoilage Coverage Endorsement CP 04 40.

3. Rules

a. Schedule


(1) The covered causes of loss: Breakdown or Contamination, Power Outage, or both, depending on the coverage desired.

(2) The applicable limit of insurance for Spoilage Coverage.

(3) The deductible for Spoilage Coverage. (Refer to Paragraph d.)

(4) The existence of Refrigeration Maintenance Agreement(s), if applicable. This condition may apply when:

(a) Breakdown or Contamination is a covered cause of loss in the policy, and

(b) Any such agreement is provided on refrigeration equipment at the described premises for which rating consideration is given.

(5) Selling Price, if applicable.

b. Blanket Insurance

Do not write insurance on a blanket basis.

c. Coinsurance

Coinsurance does not apply to Endorsement CP 04 40.

d. Deductible

(1) Use the deductible in Rule 33.A. Enter this deductible amount in the Schedule of Endorsement CP 04 40. The deductible applies per occurrence.



a. Classification

Use the following to determine the classification of types of property or occupancy:

Types Of Property Or Occupancy For Spoilage Coverage


Class 1 Bakery Goods Cheese Shops Delicatessens Fruits & Vegetables Restaurants Class 2 Dairy Products, excluding Ice Cream Grocery Stores Meat & Poultry Markets Pharmaceuticals - Non-Manufacturing Supermarkets


Class 3 Dairy Products, including Ice Cream Florists Greenhouses Seafood Other Types For other types of property or occupancies not listed in this table, refer to company for rating.

Table 38.T.4.a. Types Of Property Or Occupancy For Spoilage Coverage

b. Rates

(1) Select the applicable rate for each type of property or occupancy specified in the Schedule or in the Declarations using the table shown in the multistate rates.

(2) If Selling Price is applicable, multiply the Spoilage Coverage rate by 1.40.

c. Premium Calculation

Multiply the rate by the limit of insurance (in hundreds) to determine the premium.

U. Loss Adjustment Endorsement

1. Description

The endorsement establishes procedures to facilitate payment of loss to the insured and settlement among companies in cases where Commercial Property Insurance and Boiler & Machinery Insurance are provided by different companies. The endorsement applies when there is a difference of opinion between the insurers as to the amount each should pay in the event of loss to covered property covered by both types of insurance.

2. Form

Use Joint Or Disputed Loss Agreement Endorsement CP 12 70.

3. Rules

a. The provisions of Endorsement CP 12 70 apply only if the Boiler & Machinery insurance contains substantially the same provisions as Endorsement CP 12 70.

b. There is no premium charge or credit for the use of Endorsement CP 12 70.

V. Broken Or Cracked Glass Exclusion

Broken Or Cracked Glass Exclusion Endorsement CP 10 52 may be used to exclude glass that is broken or cracked at policy inception and any extensions of those breaks or cracks.

W. Limited International Coverage - Property Endorsements

1. Business Personal Property - International Travel

a. Form And Description Of Coverage

Use Business Personal Property - Limited International Coverage Endorsement CP 04 32 to provide coverage for Your Business Personal Property while the property is temporarily in, or en route to or from, the Foreign Coverage Territory. While in the Foreign Coverage Territory, the property must be in the care, custody or control of the insured or the insured's authorized representative, or located at a business location owned or operated by or rented or leased to the insured.

b. Rules

Indicate the following in the Schedule of Endorsement CP 04 32:

(1) Applicable Foreign Coverage Territory.

(2) The applicable Causes of Loss Form. Different Causes of Loss Forms may apply to domestic and international coverage.

(3) Endorsements, if any, which supplement or restrict the indicated Causes of Loss Form.

(4) Time Limitation for each trip.

(5) A Limit of Insurance for coverage under this endorsement. This Limit does not increase the amount of insurance that applies to Your Business Personal Property.

c. Premium Determination


2. Property In Process Of Manufacture By Others

a. Form And Description Of Coverage

Use Property In Process Of Manufacture By Others - Limited International Coverage Endorsement CP 04 33 to extend Your Business Personal Property Coverage to apply to raw materials and in-process goods while in the process of manufacture in the Foreign Coverage Territory. The manufacturing must be done by others at a location that is not owned or operated by or leased to the insured.

b. Rules

(1) Indicate the following in the Schedule of Endorsement CP 04 33:

(a) Applicable Foreign Coverage Territory.

(b) The applicable Causes of Loss Form. Different Causes of Loss Forms may apply to domestic and international coverage.

(c) Endorsements, if any, which supplement or restrict the indicated Causes of Loss Form.

(d) A Limit of Insurance for coverage under this endorsement. This Limit does not increase the amount of insurance that applies to Your Business Personal Property. The Coinsurance Condition does not apply to the coverage provided under this endorsement.

(e) Deductible.

(2) The endorsement conveys that coverage will not apply with respect to property in any country where unilateral or bilateral sanction or embargo prohibits the transactions addressed in Endorsement CP 04 33, or where insurance law prohibits issuance of the endorsement.

(3) The Company is responsible for investigating and complying with any applicable laws and regulations of foreign territories.

c. Premium Determination


X. Fire Department Service Charge Coverage - Increased Limit


Coverage for fire department service charges applies when liability for the charges was assumed prior to loss or is required by local ordinance.

The limit of $1,000, provided in the following forms, may be increased.

a. Building and Personal Property Coverage Form CP 00 10

b. Condominium Association Coverage Form CP 00 17

c. Condominium Commercial Unit-Owners Coverage Form CP 00 18

d. Builders Risk Coverage Form CP 00 20

e. Tobacco Sales Warehouses Coverage Form CP 00 80

f. Standard Property Policy CP 00 99 (if CP 00 99 is in effect in this jurisdiction)

2. Rules

Enter the total amount of Fire Department Service Charge coverage in the Declarations.


Develop an additional premium for the portion of the Fire Department Service Charge Limit that exceeds $1,000. To determine that premium, multiply the additional Limit (in hundreds) by the rate shown in the multistate rates.

39. RESERVED FOR FUTURE USE

SECTION III-COVERAGE FORM RULES BUILDERS' RISK COVERAGE

40. BUILDERS RISK COVERAGE FORM (Class Code 1150)


Builders' Risk Insurance provides coverage on a building in the course of construction. It may also cover additions and alterations, foundations, temporary structures, materials and supplies owned by the insured, and on a limited basis, building materials and supplies of others.

B. Basic Form

Use Builders' Risk Coverage Form CP 00 20.

C. Eligibility

All buildings under construction are eligible for Builders' Risk Coverage. Buildings under construction commonly contain no occupancy. Therefore, exposures which may not be eligible for certain coverages when occupied are eligible for such coverages during construction. The following are some examples of risks which are eligible during the course of construction but which may not be eligible when occupied under the rules of this Division:

1. Boarding or rooming houses (1-4 units);

2. Farm properties;

3. Dwellings.

D. Rules

1. Blanket Insurance

a. Definition

Blanket Insurance covers under one amount two or more buildings or structures in the course of construction.

b. Blanket Average Rates

(1) Use Statement Of Values Endorsement CP 16 15 in calculating blanket average rates.

(2) Calculate blanket average rates and premiums by cause of loss as follows:

(a) Determine the premium for each item by multiplying the completed value rate by 100% of the completed values in hundreds.

(b) Develop the sum of all the premiums for all items as determined in Paragraph (a).

(c) Develop the sum of the 100% completed values for all items.

(d) Divide the result of Paragraph (b) by the result of Paragraph (c) in hundreds.

(e) Multiply the result by 1.05. The result is the completed value blanket average rate.

c. Highest Rates

(1) If a blanket average rate is not used, multiply the highest completed value rate by the limit of insurance in hundreds to develop the premium for each covered cause of loss.

(2) The highest completed value rate must be determined separately for each cause of loss.

2. Cancellation

Builders' Risk policies may be cancelled pro rata upon completion of the building. Use the limit of insurance applicable at the time of cancellation.

3. Limit Of Insurance

The limit of insurance should contemplate the full value of the described property at the date of completion, including all permanent fixtures and decorations that constitute a part of the building. Failure to maintain the proper limit of insurance may cause the insured to share proportionately in a loss.

If the limit of insurance is increased during the term of the policy, compute the premium for the increased limit from the inception date of the policy to expiration.

Contract price does not necessarily equal the full value at completion.

4. Policy Inception Date And Policy Term

a. Policy Inception Date

Select an inception date which is not later than:

(1) The date construction starts above the level of the lowest basement floor; or

(2) The date construction starts, if there is no basement.

b. Policy Term

Issue policies for a minimum term of one year.

5. Deductible

a. All Builders' Risk property damage rates contemplate a minimum deductible of $500 unless otherwise provided.

b. See Rule 81. if higher deductibles are desired.

E. Builders' Risk Rates

Use Builders' Risk Completed Value rates. Refer to the state rates or the multistate rates, depending on cause of loss. The symbols and multipliers for Basic Group II are located in Rule 70. in the general rules. Make no rate modification for Coinsurance. Refer to Additional Conditions - When Coverage Ceases of Form CP 00 20 to determine the period of time for which the rates are applicable.

41. BUILDERS' RISK COVERAGE OPTIONS (Class Code 1150)

A. Building Renovations


When renovations are made to existing buildings, Builders' Risk Coverage may be amended to exclude the value of existing realty.

2. Forms

a. Use Builders' Risk Renovations Endorsement CP 11 13 to include the value of building improvements, alterations or repairs under construction.

Attach this endorsement to Builders' Risk Coverage Form CP 00 20 only or in combination with Builders' Risk Reporting Form CP 11 05 and Form CP 00 20.

b. To exclude the value of the renovations from the building owner's completed building coverage, refer to Rule 30.C.4.f.

3. Rules

a. General

Use the rules applicable to Form CP 00 20 or Endorsement CP 11 05 except as provided in Paragraphs 3.b. and 3.c.

b. Interests Insured

The policy may be written to cover:

(1) The interest of the building owner;

(2) The interest of the contractor; or

(3) The owner and contractor jointly as their interests may appear.

c. Limit Of Insurance

In determining the limit of insurance under Builders' Risk Renovations Coverage do not include the value of real property which existed prior to current construction.


a. If coverage is not written using Endorsement CP 11 05, use the higher of:

(1) The builders' risk completed value rate multiplied by 1.36; or

(2) .75 times the 100% coinsurance completed building rate.

b. If coverage is written using Endorsement CP 11 05, use the higher of:

(1) The builders' risk completed value rate multiplied by 1.82; or

(2) The 100% coinsurance completed building rate.

B. Builders' Risk Reporting Form


Buildings under construction may be written on a reporting form basis.

2. Form

Attach Endorsement CP 11 05 to Form CP 00 20.

3. Rules

a. Policy Term

(1) Issue policies for a minimum term of one year.

(2) Do not extend the term by endorsement.

b. Report Requirements

Endorsement CP 11 05 requires:

(1) Monthly reports of the value of property covered.

(2) Selection of a day of the month on which reports are to be made. This must be done within 30 days of policy inception.

c. Report Form

Monthly reports of values must be made using Builders' Risk Premium Adjustment Form CP 11 06. This endorsement changes the amount of insurance by the difference between the values on the current report's effective date and the previous values reported.


a. Determine initial premium based on 100% of the values of covered property existing at policy inception.

b. Charge additional premium or credit return premium for the reported change in values for the unexpired term of the policy. Compute the additional or return premium from the date midway between the dates of the current and preceding report to the expiration date of the coverage.

c. Use the state rates multiplied by 1.82.

5. Example


C. Separate Or Sub-Contractor's Interests

1. Exclusion

The interest of separate or sub-contractors may be excluded by adding Builders' Risk - Separate Or Sub-Contractors Exclusion Endorsement CP 11 14.

2. Coverage

Specific insurance for the interest of separate or sub-contractors may be written by adding Builders' Risk - Separate Or Sub-Contractor's Coverage Endorsement CP 11 15.

D. Collapse During Construction


When any causes of loss form broader than the Basic Causes Of Loss Form is attached to the Builders' Risk Coverage Form, the latter limits the Collapse Additional Coverage in the causes of loss form by removing coverage for collapse due to defective material or methods that occurs during the course of construction. This coverage can be restored for additional premium.

2. Form

To provide the buy-back coverage, attach Builders' Risk Collapse During Construction Endorsement CP 11 20 to Form CP 00 20.

3. Application

Endorsement CP 11 20 is only applicable to locations where coverage at least equivalent to the Broad Causes Of Loss Form CP 10 20 applies.

4. Rate Modifications

a. If an architect, engineer or building trades contractor is named as the insured or as an additional insured, or if the insured has waived rights of subrogation against any of these, multiply the Builders' Risk rates by 5.0.

b. In all other cases, increase the Builders' Risk rates by the amount shown in the multistate rates.

These modifications do not apply to the Builders' Risk rates for Basic Group I, Basic Group II or Earthquake.

E. Theft Of Building Materials, Fixtures, Machinery, Equipment


Coverage may be provided for theft of building materials, fixtures, machinery and equipment intended to become a permanent part of the building or structure.

2. Form

Attach Builders' Risk - Theft Of Building Materials, Fixtures, Machinery, Equipment Endorsement CP 11 21 to Form CP 00 20.

3. Rules

a. Limit Of Insurance

Enter a Limit of Insurance in the Schedule of Endorsement CP 11 21. This limit is separate from the limit applicable to the building(s) under Form CP 00 20.

b. Minimum Deductible

The minimum deductible is $1,000. This deductible applies only to the coverage provided under Endorsement CP 11 21. This deductible is separate from the deductible which applies to losses covered under Form CP 00 20.


Develop the additional premium for Endorsement CP 11 21 as follows:

a. Multiply the Builders' Risk Basic Group I rate by .25.

b. Multiply the result of Paragraph a. by the Limit of Insurance (in hundreds) for Endorsement CP 11 21.

If the deductible is in excess of $1,000, refer to company for further rate modification.

F. Building Materials And Supplies Of Others


The $5,000 per premises limit provided in the Coverage Extension of the Builders' Risk Coverage Form may be increased to a higher amount via Declarations entry.

2. Rules

Indicate in the Declarations the total limit per premises for Building Materials and Supplies of Others.


Refer to company.


SECTION IV - COVERAGE FORM RULES TIME ELEMENT COVERAGE

SECTION IV-COVERAGE FORM RULES TIME ELEMENT COVERAGE

50. BUSINESS INCOME COVERAGE FORMS


1. Business Income Coverage for mercantile, non-manufacturing, rental properties, manufacturing and mining risks is defined in the Form as the sum of:

a. Net income (Net profit before income taxes); and

b. Continuing normal operating expenses, including payroll.

The Business Income Coverage Form also covers loss of rental value. This coverage is usually written for the building owner but may also be written to cover a lessee who, under the terms of the lease, is obligated to continue rent payments even though the building is unusable.

Rental value is defined in the forms as the:

(1) Total anticipated rental income from tenant occupancy of the premises described in the Declarations as furnished and equipped by you; and

(2) Amount of all charges which are the legal obligation of the tenant(s) and which would otherwise be your obligations; and

(3) Fair rental value of any portion of the described premises which is occupied by you.

2. Business Income Coverage can be written to encompass the following:

a. Business income including rental value;

b. Business income other than rental value; and

c. Rental value.

3. Business Income Coverage begins 72 hours after the time of direct physical loss or damage.

B. Basic Forms

1. Use Business Income Coverage Form (And Extra Expense) CP 00 30 to provide Business Income Coverage (and Extra Expense).

2. Use Business Income Coverage Form (Without Extra Expense) CP 00 32 to provide Business Income Coverage (without Extra Expense).

C. Definitions

1. Mercantile Or Non-Manufacturing Risk

A mercantile or non-manufacturing risk is one in which the business consists principally of the sale or storage of merchandise, or the furnishing or rendering of a service.

2. Manufacturing Risk

A manufacturing risk is one in which the operation consists principally of changing raw stock into finished stock by aging, assembling, converting or seasoning through the use of hand or machinery processes or the application of mechanical, electrical, thermal or chemical energy.

Property including grain elevators, grain storage buildings, grain tanks and/or equipment for drying grain is a manufacturing risk.

Building service machinery or the use of machinery for packing and shipping, or minor repairing or altering incidental to a predominantly mercantile or non-manufacturing risk does not require the occupancy to be classified as a manufacturing risk.

3. Combined Manufacturing And Mercantile Risk

A combined manufacturing and mercantile risk is one in which a manufacturer is also engaged in mercantile operations, either on or off the premises of the manufacturing plant(s), involving the sale of products manufactured by others or wholesale or retail sale of his or her own products.

D. Rules

1. Coverage

Forms CP 00 30 and CP 00 32 each may be written as separate policies or as separate items with direct property damage in one policy.

2. Base Rate

Wherever the term "base rate" is used in these rules, it means the 80% coinsurance building rate.

3. Business Income Report/Work Sheet

You may use Business Income Report/Work Sheet Endorsement CP 15 15 in the determination of the limit of insurance and, if any, the coinsurance percentage.

The figure in Item L. of Endorsement CP 15 15 represents 100% of the estimated Business Income exposure for 12 months, plus additional expenses. Using this figure as information, determine the approximate amount of insurance needed based on the insured's evaluation of the number of months needed (may exceed 12 months) to replace the property, resume operations

and restore the business to the condition that would have existed if no property damage had occurred. Take into consideration any extended period of indemnity as described in Rule 51.D.

If Coinsurance applies or if the Agreed Value Optional Coverage (Rule 51.A.) applies: From the available Coinsurance percentages, select the percentage that, applied to the figure in Item L. of Endorsement CP 15 15, produces a selected Limit of Insurance which is close to the approximate amount of insurance needed. The selected Coinsurance percentage and the selected Limit of Insurance must be stated in the Declarations.

4. Declarations

Use the Declarations to indicate the Limit of Insurance, Coinsurance and Optional Coverages applicable to:

a. Business income including rental value;

b. Business income other than rental value;

c. Rental value.

If more than one Limit of Insurance is shown in the Declarations for Business Income Coverage, the provisions of the Commercial Property Coverage Part apply separately in each case. Each should be rated separately, with individual optional coverages applied as desired.


a. General

Blanket Insurance may be written only if there is substantially common ownership, actual management or operating control by the insured.

See Rule 51.B. regarding Blanket Insurance for Business Income From Dependent Properties - Broad Form CP 15 08 and Business Income From Dependent Properties - Limited Form CP 15 09.

b. Ineligibility

Do not write insurance under Form CP 00 30 or CP 00 32 blanket when the No Coinsurance option is used.

c. Location Count

When not constituting the principal business of the insured, do not consider warehouses, garages, or offices as additional locations for rating purposes.

d. Blanket Average Rates

(1) Blanket coverage may be written using:

(a) An average base rate weighted by floor area unless otherwise specified; or

(b) The highest 80% coinsurance building rate for each cause of loss as the base rate if no average base rate is available.

(i) Disregard the area of finished stock warehouses, offices and garages when weighting by floor area.

(ii) If a distribution of business income values is available by location, values may be substituted for area in computing the rate.

(iii) Use an average base rate weighted by bushel capacity for grain risks.

(2) A blanket average rate expires one year from its effective date or when new specific rates are applicable, whichever occurs first.

(3) A new blanket average rate may be requested if conditions upon which the average rate is based have materially changed.


1. Completed Buildings

a. Rate Factor Table

Multiply the base rates by the appropriate factor in Table 50.E.3.b.#1 Business Income (And Extra Expense) Rate Factors or Table 50.E.3.b.#2 Business Income (Without Extra Expense) Rate Factors to obtain the business income rates.

b. Rental Property

If the insured's principal business is rental properties, the following rules apply:

(1) Portions Of Buildings

Insurance may be limited to a portion of a building or structure. The Declarations must specifically describe such portion and specifically refer to the rental value of the described property.

(2) Location

Each building or structure separately rated is considered a separate location.

(3) Blanket Coverage

A single amount of insurance at more than one location is blanket coverage.

c. Combined Manufacturing And Mercantile Operations

Compute an average rate using appropriate manufacturing factors for those areas occupied for manufacturing purposes and mercantile factors for those areas occupied for mercantile purposes. Consider warehouses as mercantile in the computation. In determining the average rate:

(1) Multiply the mercantile area by the mercantile business income rate;

(2) Multiply the manufacturing area by the manufacturing business income rate;

(3) Total the results of Paragraphs (1) and (2) and divide by the total floor area.

Refer to Rating Examples Appendix.

d. Combined Manufacturing And Rental Operations

Compute an average rate using appropriate manufacturing factors for those areas occupied for manufacturing purposes and rental properties factors for those areas occupied for rental purposes. In determining the average rate:

(1) Multiply the manufacturing area by the manufacturing business income rate;

(2) Multiply the rental area by the rental properties business income rate;



e. Combined Mercantile And Rental Operations

Compute an average rate using appropriate mercantile factors for those areas occupied for mercantile purposes and rental properties factors for those areas occupied for rental purposes. In determining the average rate:

(1) Multiply the mercantile area by the mercantile business income rate;

(2) Multiply the rental area by the rental properties business income rate;



If a distribution of business income values is available by location, values may be substituted for area in computing the rate.

2. Builders' Risks (Class Code 1150)


Time Element Insurance may be written on a building under construction. The Declarations must state that the risk is under construction and indicate the contemplated occupancy. The company must be notified and the rate must be adjusted when the risk is completed or occupied in whole or in part.

b. Eligibility

Refer to Rule 40.

c. Rates

(1) Base rates are the appropriate completed value builders' risk rates multiplied by 2.0.

(2) Multiply the base rate by the appropriate factor in Table 50.E.3.b.#1 Business Income (And Extra Expense) Rate Factors or Table 50.E.3.b.#2 Business Income (Without Extra Expense) Rate Factors to obtain the business income rates.

3. Business Income Rate Factors

a. Application

The rate factors shown in Table 50.E.3.b.#1 Business Income (And Extra Expense) Rate Factors and Table 50.E.3.b.#2 Business Income (Without Extra Expense) Rate Factors apply to coverage written on a specific or blanket basis except for the No Coinsurance option factors. Do not use the No Coinsurance option when coverage is written on a blanket basis.

b. Rate Factor Table

Multiply the base rates by the appropriate factor to obtain the business income rates.

Type Of Risk

Coinsurance Percentage

Mercantile And Non-Manufacturing

Manufacturing And Mining

Rental Properties

125% .55 .65 .50 100 .59 .69 .55 90 .65 .75 .59 80 .69 .79 .65 70 .75 .85 .69

Type Of Risk




Rental Properties

60 .79 .89 .75 50 .89 1.05 .85 No Coinsurance 2.28 2.43 2.08

Table 50.E.3.b.#1 Business Income (And Extra Expense) Rate Factors

Type Of Risk




Rental Properties

125% .50 .59 .45 100 .54 .63 .50 90 .59 .68 .54 80 .63 .72 .59 70 .68 .77 .63 60 .72 .81 .68 50 .81 .95 .77 No Coinsurance 2.07 2.21 1.89

Table 50.E.3.b.#2 Business Income (Without Extra Expense) Rate Factors


Multiply the business income rate by the limit of insurance in hundreds to determine the premium.

G. Interruption Of Computer Operations

Under the Business Income Coverage Forms, an automatic Additional Coverage - Interruption Of Computer Operations provides business income and/or extra expense coverage for loss sustained in a suspension of operations due to destruction or corruption of electronic data by certain named perils. This is the only coverage provided by the Business Income Coverage Forms for this type of loss. Coverage is subject to an annual aggregate limit of $2,500. This limit is the maximum payable regardless of the number of interruptions or the number of premises, locations or computer systems involved.


51. BUSINESS INCOME COVERAGE OPTIONS

A. Business Income Agreed Value Optional Coverage


Under this coverage, the Coinsurance Condition of the Business Income (And Extra Expense) Coverage Form CP 00 30 and the Business Income (Without Extra Expense) Coverage Form CP 00 32 is suspended for insureds who agree to carry a limit of insurance equal to at least:

a. The Coinsurance Percentage shown in the Declarations times;

b. The amount of Net Income and Operating Expenses for the 12 months following the inception date of coverage.

2. Ineligibility

Do not use the Business Income Agreed Value Coverage Option with policies having the following forms attached:

a. Business Income From Dependent Properties -- Limited International Coverage Endorsement CP 15 01;

b. Business Income From Dependent Properties - Broad Form CP 15 08;

c. Business Income From Dependent Properties - Limited Form CP 15 09;

d. Business Income Premium Adjustment Endorsement CP 15 20.

3. Rules

a. Coinsurance

In the Declarations, indicate that the Business Income Agreed Value Optional Coverage applies and show an agreed value and a coinsurance percentage. The minimum coinsurance is 50%.

If the business income limit of insurance is less than the agreed value, loss payment will be adjusted proportionately.

b. Annual Reports

At policy inception and annually afterwards, the insured must submit Business Income Report/Work Sheet Endorsement CP 15 15. The report must show financial data:

(1) During the 12 months prior to the date of the work sheet; and

(2) Estimated for the 12 months immediately following the Agreed Value inception date.

The Business Income Report/Work Sheet may be attached to the policy or retained in the insurer's files.

c. Reactivation Of Coinsurance

Each suspension of the Coinsurance Condition is effective only for the 12 months following the Agreed Value effective date. The Coinsurance Condition again becomes operative if:

(1) The agreed value is not renewed within 12 months of the effective date; or

(2) The insured requests a change in the business income limit of insurance without submitting a new Report/Work Sheet and Agreed Value.


Multiply the business income rates by 1.1.

B. Business Income From Dependent Properties


The Business Income From Dependent Properties Forms, when attached to Form CP 00 30, or Form CP 00 32, whichever is applicable provide coverage for loss of business income sustained when the suspension of the insured's operations is caused by direct loss or damage to described dependent property.

2. Definition

Dependent Property is property that the insured depends on to:

a. Deliver materials or services to the insured or others for the insured's account (Contributing Locations). With respect to Contributing Locations, services does not mean water, communication or power supply services;

b. Accept the insured's products or services that the insured ships (Recipient Locations);

c. Manufacture products for delivery to the insured's customers under contract of sale (Manufacturing Locations); or

d. Attract customers to the insured's business (Leader Locations).

The Dependent Property must not be owned, operated or controlled by the insured.

3. Forms

a. Use Endorsement CP 15 08 to provide coverage subject to the same:

(1) Limit of insurance;

(2) Coinsurance percentage; and

(3) Coverage Options (other than Agreed Value and Premium Adjustment);

as Form CP 00 30 or Form CP 00 32, whichever is applicable.

b. Use Endorsement CP 15 09 when:

(1) Direct Business Income Coverage under Form CP 00 30 or CP 00 32 at the insured's own premises is not provided; or

(2) Separate limits of insurance are selected for dependent properties which differ from the direct business income limit of insurance or differ from the limits of insurance of other dependent properties.

4. Rules

a. Coinsurance


b. Ineligibility

Do not use Endorsements CP 15 08 and CP 15 09 when there is substantially common ownership, actual management or operating control by the insured of the dependent property.

c. Examination

The Policy must be examined, if required, by ISO (except as provided in Rule 19.) in the state where the insured is located and the rules and forms of that state must apply.

d. Limit Of Insurance

In determining the premium under Endorsement CP 15 09, apply the rate to the total of all limits of insurance in hundreds at all locations.


a. When only one dependent property is described in the policy:

(1) Multiply the base rates applying to the dependent property by the factors shown in Table 50.E.3.b.#1 Business Income (And Extra Expense) Rate Factors or Table 50.E.3.b.#2 Business Income (Without Extra Expense) Rate Factors.

(2) Multiply the resulting rates by the following factors:

(a) 1.00 if continued operation of all of the insured's business is dependent on a dependent property that is the only:

(i) Readily available source or manufacturer of certain material or products; or

(ii) Outlet for a product.

(b) .50 if the conditions in Paragraph (a) do not apply and coverage is written under Endorsement CP 15 09.

(c) .40 if the conditions in Paragraph (a) do not apply and coverage is written under Endorsement CP 15 08.

(3) Multiply the resulting rates by any other rate factor that applies under any other eligible Business Income Coverage Option.

b. When more than one dependent property is described in the policy or the Declarations, refer to Paragraph a. and use the rates of the highest rated dependent property as the base rates.

6. Limited International Coverage

a. Use Business Income From Dependent Properties - Limited International Coverage Endorsement CP 15 01 with Business Income (And Extra Expense) Coverage Form CP 00 30 or Business Income (Without Extra Expense) Coverage Form CP 00 32 to provide dependent property coverage related to a Contributing Location or Manufacturing Location outside the Coverage Territory (United States, its territories and possessions, Puerto Rico and Canada).

b. In the Schedule of Endorsement CP 15 01, describe occupancy and location of the dependent property, and enter Limit of Insurance and applicable causes of loss, including any endorsements modifying the causes of loss.

c. Refer to rating provisions implemented by the Company in compliance with regulatory requirements.

C. Business Income Premium Adjustment Form


Under this form, the initial premium paid by the insured for Business Income Coverage will be adjusted annually based on reports of values. Any premium in excess of the amount actually required will be refunded to the insured. The Coinsurance Condition remains in full force and applies to the limit of insurance in the usual manner.

2. Forms

a. Use Endorsement CP 15 20 with Form CP 00 30 or Form CP 00 32.

b. Use Endorsement CP 15 15 to report values as required by Endorsement CP 15 20. Only the first column of Endorsement CP 15 15 need be used to report values.

3. Ineligibility

Do not use Endorsement CP 15 20 with the following:

a. Agreed Value Optional Coverage.

b. Endorsement CP 15 08.

c. Endorsement CP 15 09.

4. Rules

a. Coinsurance


b. Two Or More Policies

When Endorsement CP 15 20 is attached to one policy, it should be attached to all policies covering the same risk.

While not mandatory, it will simplify the preparation of reports by the insured if all policies are concurrent as to inception and expiration dates and if the inception dates coincide with the insured's fiscal year.

c. Cancellation

If the policy is cancelled at the request of the insured, the provisional premium (subject to the applicable cancellation procedures) is the final premium, unless the policy is rewritten in the same company for an equal or greater amount of insurance.

d. Policy Periods Greater Than One Year

For policies written:

(1) On a continuous basis, or

(2) For a specific period greater than one year,

compute the provisional premium and final premium annually on the basis of the rates in effect and the values reported as of the anniversary date of the policy.


a. General Rules

(1) If the effective date of Endorsement CP 15 20 is after the effective date of Form CP 00 30 and Form CP 00 32, make no premium adjustment for the time between the effective dates of the two forms.

(2) If there has been any change in the percentage of contributing insurance or business income coinsurance percentage during the policy term, develop an adjusted earned premium on a pro rata basis for each percentage of contributing insurance or coinsurance percentage for the time the percentage of contributing insurance or coinsurance percentage was in effect.

(3) Adjust reported values that apply only to a part of a policy period pro rata.

b. Development Of Provisional Premium

For each covered cause of loss, develop the provisional premium by multiplying the business income rate by the limit of insurance in hundreds.

c. Development Of Adjusted Premium

(1) Determine business income values from Business Income Report/Work Sheet Endorsement CP 15 15.

(2) Multiply the reported values in hundreds by the business income coinsurance percentage and multiply the result by the business income rate otherwise applicable for each covered cause of loss to determine the adjusted premium.

(3) If the adjusted premium is less than the provisional premium, refund any excess premium paid to the insured.

(4) If the adjusted premium is greater than the provisional premium, the provisional premium is the final premium.

D. Extended Period Of Indemnity


The Extended Business Income additional coverage of Form CP 00 30 and Form CP 00 32 may be extended to cover additional loss of Business Income beyond 30 days by activating this Optional Coverage on the Declarations.

2. Ineligibility

Do not use this optional coverage when the Maximum Period of Indemnity coverage option is applicable or the No-Coinsurance option is applicable.

3. Rule

Coverage may be extended to apply to Endorsement CP 15 08 and Endorsement CP 15 09.


Multiply the Business Income Coverage rates otherwise applicable by the factors in Table 51.D.4. Extended Period Of Indemnity Rate Modification Factors depending on the number of days that the coverage is extended.

Number Of Days*

Factor

60 1.10 90 1.15 120 1.20 150 1.30 180 1.40 270 1.45 365 1.50 450 1.55 540 1.60 630 1.65 730 1.70 *Interpolation not permitted

Table 51.D.4. Extended Period Of Indemnity Rate Modification Factors

E. Maximum Period Of Indemnity


This coverage option is contained in Form CP 00 30 and Form CP 00 32 and is activated by entry on the Declarations. Under this option, the coinsurance clause of Form CP 00 30 and Form CP 00 32 is suspended and coverage applies for a maximum indemnity period of four months.

2. Eligibility

All classes of risk are eligible except:

a. Mining risks.

b. Property rated under the Rating Plan For Highly Protected Or Superior Risks.

3. Rules

a. Blanket Insurance is not permitted over more than one location. Coverage must be specific on each separately rated property.

b. When property covered consists of more than one separately rated building occupied by the insured as one operational unit at one site, apply the selected rate factor shown in Table 51.E.4. Maximum Period Of Indemnity Rate Modification Factors to the highest base rate for each covered cause of loss of the buildings included in the coverage. Any buildings to which coverage is not intended to apply must be clearly excluded on the Declarations.


Multiply the base rates by the appropriate factor in Table 51.E.4., Maximum Period Of Indemnity Rate Modification Factors, representing the insured's principal business, to obtain the rate.

Business Income Factor

Type Of Risk

(And Extra Expense)

(Without Extra Expense)


Type Of Risk

(And Extra Expense)


Mercantile/Non-Manufacturing Operations

1.35

1.26

Manufacturing Operations

2.03

1.85

Rental Properties 1.04 .95

Table 51.E.4.(v.2) Maximum Period Of Indemnity Rate Modification Factors

F. Monthly Limit Of Indemnity


This coverage option is contained in Form CP 00 30 and Form CP 00 32 and is activated by entry on the Declarations by selection of one of the following monthly limitations in Table 51.F.4. Monthly Limit Of Indemnity Rate Modification Factors. Under this option, the coinsurance clause is suspended. However, a limitation on recovery, calculated by multiplying the selected monthly limitation by the limit of insurance, applies during any thirty consecutive day period of suspension of business.

2. Eligibility

All classes of risk are eligible except:

a. Mining risks.

b. Property rated under the Rating Plan For Highly Protected Or Superior Risks.

3. Rules

a. Blanket Insurance

Blanket Insurance is not permitted over more than one location. Coverage must be specific on each separately rated property.

b. Two Or More Buildings

When property covered consists of more than one separately rated building occupied by the insured as one operational unit at one site, apply the selected rate factor shown in Table 51.F.4. Monthly Limit Of Indemnity Rate Modification Factors to the highest base rate for each covered cause of loss of buildings included in the coverage. Any buildings to which coverage is not intended to apply must be clearly excluded on the Declarations.


Multiply the base rates by the appropriate factor in Table 51.F.4., Monthly Limit Of Indemnity Rate Modification Factors, representing the insured's principal business, to obtain the rate.


Type Of Risk

Monthly Limi- tation

(And Extra Expense)

(WithoutExtra Expense)

Mercantile/ 1/3 1.27 1.13 Non-Manu- 1/4 1.13 1.04 facturing 1/6 .95 .90 Manufacturing 1/3 1.84 1.71 1/4 1.71 1.53 1/6 1.40 1.31 Rental 1/3 1.13 1.04 Property 1/4 1.04 .95 1/6 .86 .77

Table 51.F.4.(v.2) Monthly Limit Of Indemnity Rate Modification Factors

G. Mining Properties


Time Element Coverage arising from below ground mine occurrences is provided in accordance with these rules.

2. Form

Use Mining Properties - Business Income Endorsement CP 15 24.

3. Rules

a. Coinsurance


b. Underground Coverage

For each premises, indicate in the Schedule of the endorsement whether limited, broad or no underground coverage is provided.


Add the charges shown in the multistate rates to the business income rates when the Limited or Broad coverage options are designated on the Declarations.

H. Ordinary Payroll Exclusion And Limitation


a. All ordinary payroll expense may be excluded from coverage and from coinsurance provisions of Form CP 00 30 and Form CP 00 32.

b. Coverage of ordinary payroll expense may be limited to 90 or 180 days under Form CP 00 30 and Form CP 00 32.

2. Form

Use Ordinary Payroll Limitation Or Exclusion Endorsement CP 15 10.

3. Rules

a. Coinsurance


b. Payroll Exclusion

If all ordinary payroll expense is to be excluded, make no entry or show "0" under the appropriate column in the Schedule of Endorsement CP 15 10.


a. Multiply the base rate by the factors shown in Table 50.E.3.b.#1 Business Income (And Extra Expense) Rate Factors or Table 50.E.3.b.#2 Business Income (Without Extra Expense) Rate Factors.

b. Multiply the result in Paragraph a. by the appropriate factor in Table 51.H.4.b. Ordinary Payroll Exclusion And Limitation Rate Modification Factors.

Number Of Days Ordinary Payroll Covg. Is Provided

Factor

0 1.12 90 1.06 180 1.00

Table 51.H.4.b. Ordinary Payroll Exclusion And Limitation Rate Modification Factors

I. Power, Heat And Refrigeration Deduction - Manufacturing Or Mining Risks


The cost of power, heat and refrigeration consumed in production operations and which does not continue under contract may be deducted from Business Income.

2. Form

Use Power, Heat And Refrigeration Deduction Endorsement CP 15 11.

3. Coinsurance



a. Multiply the base rate by the factors shown in Table 50.E.3.b.#1 Business Income (And Extra Expense) Rate Factors or Table 50.E.3.b.#2 Business Income (Without Extra Expense) Rate Factors.

b. Multiply the result in Paragraph a. by 1.06.

J. Seasonal Leases - Monthly Limits On Loss Payment


Under this form, the definition of Business Income is revised to apply to seasonal rental property having written leases.

2. Form

Use Seasonal Leases - Monthly Limits On Loss Payment Endorsement CP 15 13.

3. Rules

a. Coinsurance

Indicate 100% coinsurance on the Declarations.

b. Written Leases

Only written leases may be covered under Endorsement CP 15 13.


Multiply the base rate by:

.67 for Business Income (And Extra Expense);

.63 for Business Income (Without Extra Expense).

K. Business Income Changes - Educational Institutions

1. Usage And Description Of Coverage

Business Income Changes - Educational Institutions Endorsement CP 15 25 should be used when an educational institution is insured under Form CP 00 30 or CP 00 32, due to the necessary modifications described in Paragraph a. Endorsement CP 15 25 also offers an Extension Of Recovery Period Option and a Limited Coverage Option, as described in Paragraphs b. and c.

a. Educational Institutions

The Business Income Changes - Educational Institutions Endorsement modifies the Period of Restoration and Additional Coverage - Extended Business Income, so that:

(1) Coverage begins 72 hours after the direct physical loss and ends on the day before the opening of the next school term following restoration of the premises.

(2) Coverage is extended through the school term following restoration of the premises, if restoration is accomplished 60 days or less before the scheduled opening of the next school term.

b. Extension Of Recovery Period Option

This endorsement offers an Extension Of Recovery Period Option, activated by entry in the Schedule. If this Option is selected, it replaces the Extended Business Income Coverage described in Paragraph a.(2). The Extension Of Recovery Period Option covers Business Income loss sustained during a specified number of months (up to 12 months) following the end of the period of restoration. Enter the selected number of months in the Schedule.

c. Limited Coverage Option

The endorsement offers a Limited Coverage option, activated by entry in the Schedule, whereby covered operations are limited to business activities which generate tuition and related fees (such as room, board, laboratories) from students. Under the Limited Coverage option, bookstores, athletic events, research grants, and activities other than those which generate tuition and related fees, are excluded. If the Limited Coverage option applies, the Business Income limit of insurance should be selected accordingly.

2. Form


3. Rules

a. Coinsurance


b. Description

In the Schedule, identify the covered premises and provide a description of each school term in an annual period. Also indicate whether the Extension Of Recovery Period Option and/or the Limited Coverage Option apply.

c. Period Of Indemnity

When using Endorsement CP 15 25 in covering educational institutions, do not activate the Extended Period of Indemnity Option in Form CP 00 30 or CP 00 32. That option is unnecessary due to the coverage period described in Paragraphs 1.a.(1) and 1.a.(2) or 1.b.


a. Multiply the base rate by the appropriate factor in Table 51.K.4.a. Business Income Changes - Educational Institutions Rate Modification Factors.



(And Extra Expense)


125% .81 .72 100 .90 .81 90 .95 .90 80 1.04 .95 70 1.08 .99 60 1.17 1.08 50 1.35 1.26

Table 51.K.4.a. Business Income Changes - Educational Institutions Rate Modification Factors

b. If the Extension Of Recovery Period Option applies, increase the rate developed in Paragraph a. by 2% for each of the first four months, and by 4% for each subsequent month. The maximum number of months under this Option is twelve.

L. Discretionary Payroll Expense


Payroll expenses are payable under the provisions of Forms CP 00 30 and CP 00 32 only when the expense is necessary to resume normal operations. Under the Discretionary Payroll Expense Endorsement, that criterion does not apply with respect to payroll expense for selected Job Classifications and/or Employees as designated therein, and therefore such payroll is included in the determination of Business Income loss. Coverage applies for the entire period of restoration, unless explicitly limited to a maximum number of days.

2. Form

Use Discretionary Payroll Expense Endorsement CP 15 04.

3. Rules

a. Job Classifications And Employees

Enter the selected Job Classifications and/or Employees in the Schedule of Endorsement CP 15 04.

b. Number Of Days

If the number of days of payroll is to be limited for the applicable Job Classifications and Employees, enter the maximum number of days in the Schedule.

c. Related Consideration

Increase the Business Income Limit of Insurance as needed to recognize the increase in exposure.


Refer to rating provisions, if any, implemented by the Company in compliance with regulatory requirements.

M. Business Income - Landlord As Additional Insured (Rental Value)


This coverage option addresses the situation where a tenant's lease requires the tenant to provide insurance for loss of rental value for the benefit of the landlord.

2. Form

Use Business Income - Landlord As Additional Insured (Rental Value) Endorsement CP 15 03.

3. Rules

a. Usage

Endorsement CP 15 03 is used with a Business Income Coverage Form. If the Named Insured (tenant) carries Business Income coverage for its own interest, the same Coverage Form may be identified in the Schedule of Endorsement CP 15 03. Otherwise, attach Business Income (Without Extra Expense) Coverage Form CP 00 32.

b. Schedule

Indicate the following in the Schedule of Endorsement CP 15 03:

(1) Description of the rented premises;

(2) Identification of the Additional Insured (landlord);

(3) The applicable Causes of Loss Form and any endorsements modifying the Causes of Loss with respect to this coverage;

(4) The applicable Business Income Coverage Form;

(5) The Limit of Insurance for the landlord's Rental Value coverage; and

(6) A coinsurance percentage, if any.

c. Cancellation

Provide advance notice of cancellation in writing to the Additional Insured.


Multiply the 80% coinsurance building rate by the appropriate factor for Rental Properties from Table 50.E.3.b.#2, Business Income (Without Extra Expense) Rate Factors. (This Table applies regardless of the Business Income Coverage Form to which Endorsement CP 15 03 is attached, because the Endorsement specifies that Extra Expense is not part of the landlord's Rental Value coverage.) Multiply the resulting rate by the applicable Limit of Insurance in hundreds.

52. EXTRA EXPENSE COVERAGE FORM


Extra Expense Insurance covers the necessary additional expenses undertaken to:

1. Avoid or minimize the interruption of business by continuing business operations, whether at the described premises or elsewhere; or

2. Minimize the interruption of business if the insured cannot continue business operations.

B. Basic Form

Use Extra Expense Coverage Form CP 00 50.

C. Rules

1. Coverage

Extra Expense Insurance may be written as a separate policy or as a separate item with direct property damage in one policy.

2. Base Rate

Whenever the term "base rate" is used in the rules, it means the 80% coinsurance building rate.

3. Coinsurance

a. There are no coinsurance provisions.

b. Recovery is limited as shown on the Declarations to specified percentages times the limit of insurance, as follows:

The first percentage shown when the period of restoration is not in excess of 30 days;

The second percentage shown when the period of restoration is in excess of 30 days but not in excess of 60 days; or

The third percentage shown when the period of restoration is in excess of 60 days.


Do not write insurance on a blanket basis covering more than one location or site. Insurance may be written to cover groups of buildings occupied by an insured as one operational unit at one site.

D. Rate Modification

1. For Blanket Coverage as defined in Paragraph C.4., the highest 80% coinsurance building rate for each covered cause of loss must be used as the base rate.

2. Multiply the base rates by the appropriate factor in Table 52.D.2. Extra Expense Rate Modification Factors to obtain the extra expense rate.

Limits On Loss Payment Factor 100%-100%-100% 4.00 40%- 80%-

100% 2.00

35%- 70%-100%

1.90

Table 52.D.2. Extra Expense Rate Modification Factors

E. Interruption Of Computer Operations

Under the Extra Expense Coverage Form, an automatic Additional Coverage - Interruption Of Computer Operations provides extra expense coverage for loss sustained in a suspension of operations due to destruction or corruption of electronic data by certain named perils. This is the only coverage provided by the Extra Expense Coverage Form for this type of loss. Coverage is subject to an annual aggregate limit of $2,500. This limit is the maximum payable regardless of the number of interruptions or the number of premises, locations or computer systems involved.


53. EXTRA EXPENSE COVERAGE OPTIONS

A. Expanded Limits On Loss Payment


Extra Expense Limits on Loss Payment percentages contemplating four or more periods can be shown on the Expanded Limits on Loss Payment Endorsement.

2. Form

Use Expanded Limits On Loss Payment Endorsement CP 15 07.


a. For Blanket Coverage as defined in Rule 52.C.4., the highest 80% coinsurance building rate for each covered cause of loss must be used as the base rate.

b. Multiply the base rates by the appropriate factor in Table 53.A.3.b. Expanded Limits On Loss Payment Rate Modification Factors to determine the extra expense rate.

Limits On Loss Payment Factor 30%-60%-90%-100% 1.80 25%-50%-75%-100% 1.70 20%-40%-80%-100% 1.60

Table 53.A.3.b. Expanded Limits On Loss Payment Rate Modification Factors

c. Compute rate factors for Limits On Loss Payment not shown in Table 53.A.3.b. Expanded Limits On Loss Payment Rate Modification Factors as follows:

(1) Multiply the difference between the percentage limits of loss payment assumed for each 30 days and the percentage for the preceding 30 days by the appropriate factor from Table 53.A.3.c.(1) Additional Options For Expanded Limits On Loss Payment.

Table Of Factors

(Maximum percentage for first month 40%)

1st 30 day period of

restoration 2.60

2nd 30 day period of restoration

1.85

3rd 30 day period of restoration

1.40

4th 30 day period of restoration

1.20


1.05


.90


.80


.70


.60


.50


.45


.40

Table 53.A.3.c.(1) Additional Options For Expanded Limits On Loss Payment

(2) Add the factors obtained for each 30 days to obtain the total extra expense factor. Limit this sum to a maximum of 2.0.

(3) Multiply the total extra expense factor obtained by the base rate to obtain the extra expense rate.

4. Rating Example


B. Extra Expense From Dependent Properties


This form provides coverage for extra expenses incurred due to direct loss or damage to dependent property.

2. Form

Use Extra Expense From Dependent Properties Endorsement CP 15 34 with Extra Expense Coverage Form CP 00 50.

3. Rules

a. Limits On Loss Payment

The limits on loss payment applicable to direct Extra Expense Coverage apply to each dependent location.


Do not write insurance on a blanket basis covering more than one location or site. Endorsement CP 15 34 may be written with Form CP 00 50 to cover groups of buildings, not occupied by an insured, as one operational unit at one site.


Use the same rating procedure as that for direct Form CP 00 50 according to the limit of insurance and the applicable base rate of the dependent property.

5. Limited International Coverage

a. Use Extra Expense From Dependent Properties - Limited International Coverage Endorsement CP 15 02 with Extra Expense Coverage Form CP 00 50 to provide dependent property coverage related to a Contributing Location or Manufacturing Location outside the Coverage Territory (United States, its territories and possessions, Puerto Rico and Canada).

b. In the Schedule of Endorsement CP 15 02, describe occupancy and location of the dependent property, and enter Limit of Insurance and applicable causes of loss, including any endorsements modifying the causes of loss.

c. Refer to rating provisions implemented by the Company in compliance with regulatory requirements.

54. COMMON TIME ELEMENT OPTIONS

Paragraph E. is replaced by the following:

E. Civil Authority Changes

1. Description of Coverage

The Civil Authority Coverage of Business Income (And Extra Expense) Coverage Form CP 00 30, Business Income (Without Extra Expense) Coverage Form CP 00 32 and Extra Expense Coverage Form CP 00 50 provides up to 28 days' coverage in the event that loss is caused by action of civil authority prohibiting access to the described premises due to physical damage by a Covered Cause of Loss to property other than property at the described premises, when the damaged property is within one mile of the described premises. With respect to described premises located in Florida, the 28-day coverage period is replaced by 21 days and the one-mile radius is eliminated under Florida Changes Endorsement CP 01 25, which is attached to all policies in accordance with Rule 14. in these state exceptions. The coverage period of 21 days may be increased as described in Paragraph 2.

2. Increased Coverage Period

a. Form

Use Civil Authority Increased Coverage Period Endorsement CP 15 32 to increase the 21-day coverage period.

b. Rules

(1) You may increase the Civil Authority coverage period to 60, 90 or 180 days except as provided in Paragraph (2). Enter the total number of days' coverage in the Schedule.

(2) For premises to which the Maximum Period Of Indemnity Option applies, you may increase the coverage period to 60 or 90 days.

c. Rate Modification

Multiply the time element rates by the factors in Table 54.E.2.c. Civil Authority Increased Coverage Period Rate Modification Factors, based on the total number of days' coverage.

Coverage Period Factor 60 1.15

Coverage Period Factor 90 1.20 180 1.30

Table 54.E.2.c. Civil Authority Increased Coverage Period Rate Modification Factors

54. COMMON TIME ELEMENT OPTIONS

A. Ordinance Or Law - Increased Period Of Restoration


The Business Income (And Extra Expense) Coverage Form CP 00 30, Business Income (Without Extra Expense) Coverage Form CP 00 32 or Extra Expense Coverage Form CP 00 50 may be extended to cover additional loss for the time necessary to replace or repair the damaged building to conform with current building laws or ordinances.

2. Form

Use Ordinance Or Law - Increased Period Of Restoration Endorsement CP 15 31.


a. Causes Of Loss Other Than Earthquake

Multiply the time element rate by 1.2.

b. Earthquake

Multiply the time element rate by 2.0.

B. Utility Services


Time Element Coverage may be extended to cover loss at the described premises resulting from the failure of utility services.

2. Form

Use Utility Services - Time Element Endorsement CP 15 45.

3. Rules

a. Use the Schedule of Endorsement CP 15 45 to indicate the following utility property:

(1) Properties providing water, communication and/or power supply services;

(2) Overhead power transmission and/or overhead communication lines.

b. For each described premises at which coverage applies, enter a Limit of Insurance. This Limit of Insurance is the only Limit of Insurance applicable to coverage under Endorsement CP 15 45.


a. Rule

The rates shown in the multistate rates apply only to Public Utilities. Refer to company for rates to be used with Other Than Public Utilities.

b. Power Supply And Water Supply Properties

(1) Use the rates shown in the multistate rates.

(2) If coverage for both Power Supply and Water Supply properties applies, make a separate charge for each.

c. Communications Supply Properties

Use the rates shown in the multistate rates.

d. Overhead Power Transmission And Communication Lines

(1) If coverage applies, add the rates shown in the multistate rates to the rates applicable to Paragraphs b. and/or c.

(2) If coverage for both Overhead Power Transmission and Communication Lines applies, make a separate charge for each.


For each described premises at which coverage applies, multiply the applicable rates, as described in Paragraphs 4.b., 4.c. and 4.d., by the Limit of Insurance shown in the Schedule of Endorsement CP 15 45.

C. Loss Adjustment Endorsement

1. Description

The endorsement establishes procedures to facilitate payment of loss to the insured and settlement among companies in cases where Commercial Property Insurance and Boiler & Machinery Insurance are provided by different companies. The endorsement applies when there is a difference of opinion between the insurers as to the amount each should pay in the event of loss to covered property covered by both types of insurance.

2. Form

Use Joint Or Disputed Loss Agreement Endorsement CP 12 70.

3. Rules

a. The provisions of Endorsement CP 12 70 apply only if the Boiler & Machinery Insurance contains substantially the same provisions as Endorsement CP 12 70.

b. There is no premium charge or credit for the use of Endorsement CP 12 70.

D. Business Income Changes - Beginning Of The Period Of Restoration


Business Income (And Extra Expense) Coverage Form CP 00 30 and Business Income (Without Extra Expense) Coverage Form CP 00 32 may be amended to provide that the 72-hour time period contained in the "period of restoration" definition and in the Civil Authority Additional Coverage is eliminated or replaced by 24 hours.

2. Form

Use Business Income Changes - Beginning Of The Period Of Restoration Endorsement CP 15 56. Indicate in the Schedule of Endorsement CP 15 56 whether the 72-hour time period is being eliminated or replaced by 24 hours.

3. Rating

a. If the 72-hour time period is being eliminated, multiply the time element rate by a factor of 1.11.

b. If the 72-hour time period is being replaced by 24 hours, multiply the time element rate by a factor of 1.05.

E. Civil Authority Changes


The Civil Authority Coverage of Business Income (And Extra Expense) Coverage Form CP 00 30, Business Income (Without Extra Expense) Coverage Form CP 00 32 and Extra Expense Coverage Form CP 00 50 provides up to 28 days' coverage in the event that loss is caused by action of civil authority prohibiting access to the described premises due to physical damage by a Covered Cause of Loss to property other than property at the described premises, when the damaged property is within one mile of the described premises. Options for modifying Civil Authority Coverage are described in Paragraphs 2. and 3.

2. Increased Coverage Period

a. Form

Use Civil Authority Changes Endorsement CP 15 32 to increase the 28-day coverage period.

b. Rules

(1) You may increase the Civil Authority coverage period to 60, 90 or 180 days except as provided in Paragraph (2). Enter the total number of days' coverage in the Schedule.

(2) For premises to which the Maximum Period Of Indemnity Option applies, you may increase the coverage period to 60 or 90 days.

c. Rate Modification

Multiply the time element rates by the factors in Table 54.E.2.c. Civil Authority Increased Coverage Period Rate Modification Factors, based on the total number of days' coverage.

Coverage Period Factor 60 1.10 90 1.15 180 1.25

Table 54.E.2.c. Civil Authority Increased Coverage Period Rate Modification Factors

3. Modification Of One-Mile Radius

a. Form

Use Civil Authority Changes Endorsement CP 15 32 to modify the one-mile radius.

b. Rules And Rating

Refer to provisions implemented by the Company in compliance with regulatory requirements.


SECTION V - COVERAGE FORM RULES OTHER COVERAGE FORMS

60 - 61. RESERVED FOR FUTURE USE


65. LEASEHOLD INTEREST COVERAGE


The Leasehold Interest Coverage Form covers the insured for loss in the following situations:

1. Tenants Lease Interest

a. Tenant occupies premises under an advantageous lease. The gross leasehold interest is the difference between the actual rental value of the premises and the rent payable for the unexpired term of the lease.

b. Tenant has a valuable lease and sublets the premises at a higher rental. The gross leasehold interest is the profit derived through subleasing for the unexpired term of the sublease.

2. Bonus Payments

Tenant has paid a cash bonus to acquire a lease. The monthly leasehold interest on such cash bonus is the original cost of the bonus divided by the number of months remaining in the lease at the time the bonus was paid.

3. Improvements And Betterments

Tenant has made improvements and betterments to the building. The monthly leasehold interest in the improvements and betterments is the original cost of the improvements and betterments divided by the number of months remaining in the lease at the time of installation. If the installation of the improvements and betterments increases the rental of the premises, the monthly leasehold interest is the increase in rental value divided by the number of months remaining in the lease at the time of installation. Also see Tenants Improvements And Betterments Rule 32.

4. Prepaid Rent

Tenant has paid the rent in advance. The prepaid rent is not recoverable if the lease is cancelled. The monthly leasehold interest is the original cost of the prepaid rent divided by the number of months remaining in the lease at the time the prepaid rent was paid.

B. Forms

1. Use Leasehold Interest Coverage Form CP 00 60.

2. Use Leasehold Interest Coverage Schedule Endorsement CP DS 07 or the Declarations to provide policy writing and rating information.

3. Use the appropriate Leasehold Interest Factor table, as shown in the forms portfolio. For:

a. 5% interest rate, use Leasehold Interest Factors For 5.0% Endorsement CP 60 05.

b. 6% interest rate, use Leasehold Interest Factors For 6.0% Endorsement CP 60 06.

c. 7% interest rate, use Leasehold Interest Factors For 7.0% Endorsement CP 60 07.

d. 8% interest rate, use Leasehold Interest Factors For 8.0% Endorsement CP 60 08.

e. 9% interest rate, use Leasehold Interest Factors For 9.0% Endorsement CP 60 09.

f. 10% interest rate, use Leasehold Interest Factors For 10.0% Endorsement CP 60 10.

g. 11% interest rate, use Leasehold Interest Factors For 11.0% Endorsement CP 60 11.

h. 12% interest rate, use Leasehold Interest Factors For 12.0% Endorsement CP 60 12.

i. 13% interest rate, use Leasehold Interest Factors For 13.0% Endorsement CP 60 13.

j. 14% interest rate, use Leasehold Interest Factors For 14.0% Endorsement CP 60 14.

k. 15% interest rate, use Leasehold Interest Factors For 15.0% Endorsement CP 60 15.

C. Rules

1. Blanket Coverage

Blanket Coverage is not permitted.

2. Limit Of Insurance

a. Tenants Lease Interest

The limit of insurance is the net leasehold interest at policy inception. This amount is defined as the present value of the gross leasehold interest (difference between monthly rental value and actual rent payable for the unexpired term of the lease of the insured's premises) as of the policy inception date.

Alternately, the net leasehold interest is the amount which placed elsewhere at the assumed rate of interest would be equivalent to the insured's receiving the gross leasehold interest for each month of the unexpired term of the lease.

b. Bonus Payments, Improvements And Betterments And Prepaid Rent

The limit of insurance is the net leasehold interest. This amount is defined as the monthly leasehold interest multiplied by the number of months remaining in the lease as of the policy inception date.

D. Premium Determination

1. Rates

Use the 80% coinsurance building rate for each cause of loss insured against.

2. Premium Development

Use Method 1 or Method 2

a. Tenants Lease Interest - Method 1

(1) Determine the gross leasehold interest (per month).

(2) Determine the net leasehold interest at policy inception by multiplying the monthly gross leasehold interest by the leasehold interest factor for the unexpired term of the lease as of policy inception.

(3) Determine the net leasehold interest at policy expiration by multiplying the monthly gross leasehold interest by the leasehold interest factor for the unexpired term of the lease as of policy expiration.

(4) Add the net leasehold interest at policy inception to the net leasehold interest at policy expiration.

(5) Divide the result of Paragraph (4) by 2 to determine the average limit of insurance for the policy term.

(6) Multiply the average limit of insurance in hundreds by the 80% coinsurance building rate for each covered cause of loss to develop the premium.

Leasehold Interest Coverage Factors for an interest rate of 10% are provided in Table 65.D.2.a.(6) Leasehold Interest Coverage Factors.

The following table provides Leasehold Interest Coverage Factors for an interest rate of 10%:

Leasehold Interest Coverage Factors

Month Factor Month Factor Month Factor 1 0.9921 11 10.4914 21 19.2654 2 1.9763 12 11.4005 22 20.1051 3 2.9528 13 12.3024 23 20.9381 4 3.9215 14 13.1972 24 21.7646 5 4.8826 15 14.0848 25 22.5845 6 5.8360 16 14.9655 26 23.3979 7 6.7820 17 15.8392 27 24.2049 8 7.7204 18 16.7060 28 25.0055 9 8.6514 19 17.5659 29 25.7998 10 9.5751 20 18.4190 30 26.5877

Month Factor Month Factor Month Factor 31 27.3695 41 34.8548 51 41.7686 32 28.1451 42 35.5712 52 42.4303 33 28.9145 43 36.2818 53 43.0867 34 29.6778 44 36.9869 54 43.7379 35 30.4351 45 37.6864 55 44.3840 36 31.1865 46 38.3803 56 45.0249 37 31.9318 47 39.0688 57 45.6608 38 32.6713 48 39.7518 58 46.2917 39 33.4049 49 40.4294 59 46.9176 40 34.1327 50 41.1017 60 47.5385 61 48.1545 71 54.0528 81 59.5008 62 48.7656 72 54.6173 82 60.0222 63 49.3719 73 55.1773 83 60.5394 64 49.9735 74 55.7329 84 61.0526 65 50.5702 75 56.2841 85 61.5617 66 51.1622 76 56.8309 86 62.0668 67 51.7496 77 57.3734 87 62.5678 68 52.3323 78 57.9116 88 63.0649 69 52.9103 79 58.4455 89 63.5581 70 53.4839 80 58.9753 90 64.0474

Month Factor Month Factor Month Factor 91 64.5328 101 69.1806 111 73.4735 92 65.0144 102 69.6254 112 73.8844 93 65.4921 103 70.0667 113 74.2919 94 65.9661 104 70.5045 114 74.6963 95 66.4363 105 70.9388 115 75.0975 96 66.9028 106 71.3697 116 75.4955 97 67.3657 107 71.7972 117 75.8903 98 67.8248 108 72.2213 118 76.2820 99 68.2803 109 72.6420 119 76.6706 100 68.7323 110 73.0594 120 77.0562 121 77.4387 131 81.1011 141 84.4838 122 77.8181 132 81.4516 142 84.8076 123 78.1946 133 81.7993 143 85.1287 124 78.5681 134 82.1442 144 85.4474 125 78.9386 135 82.4865 145 85.7635 126 79.3062 136 82.8260 146 86.0771 127 79.6709 137 83.1629 147 86.3882 128 80.0327 138 83.4971 148 86.6969

Month Factor Month Factor Month Factor 129 80.3917 139 83.8286 149 87.0031 130 80.7478 140 84.1575 150 87.3069 151 87.6083 161 90.4942 171 93.1598 152 87.9073 162 90.7704 172 93.4149 153 88.2040 163 91.0444 173 93.6680 154 88.4983 164 91.3162 174 93.9190 155 88.7902 165 91.5859 175 94.1681 156 89.0799 166 91.8535 176 94.4152 157 89.3673 167 92.1189 177 94.6604 158 89.6524 168 92.3822 178 94.9036 159 89.9352 169 92.6435 179 95.1449 160 90.2158 170 92.9026 180 95.3843 181 95.6218 191 97.8959 201 99.9963 182 95.8574 192 98.1135 202 100.1973 183 96.0912 193 98.3294 203 100.3967 184 96.3231 194 98.5436 204 100.5946 185 96.5532 195 98.7561 205 100.7909 186 96.7814 196 98.9669 206 100.9856 187 97.0079 197 99.1761 207 101.1788 188 97.2325 198 99.3836 208 101.3704 189 97.4554 199 99.5895 209 101.5606 190 97.6765 200 99.7937 210 101.7492

Month Factor Month Factor Month Factor 211 101.9364 221 103.7283 231 105.3834 212 102.1220 222 103.8998 232 105.5418 213 102.3062 223 104.0699 233 105.6989 214 102.4890 224 104.2387 234 105.8548 215 102.6703 225 104.4061 235 106.0095 216 102.8501 226 104.5723 236 106.1629 217 103.0285 227 104.7371 237 106.3152 218 103.2056 228 104.9006 238 106.4662 219 103.3812 229 105.0628 239 106.6160 220 103.5554 230 105.2237 240 106.7647 241 106.9121 251 108.3241 261 109.6283 242 107.0584 252 108.4593 262 109.7532 243 107.2036 253 108.5933 263 109.8770 244 107.3476 254 108.7263 264 109.9998 245 107.4904 255 108.8583 265 110.1217

Month Factor Month Factor Month Factor 246 107.6322 256 108.9892 266 110.2426 247 107.7728 257 109.1191 267 110.3626 248 107.9123 258 109.2479 268 110.4816 249 108.0506 259 109.3757 269 110.5996 250 108.1879 260 109.5025 270 110.7168 271 110.8330 281 111.9456 291 112.9733 272 110.9482 282 112.0521 292 113.0717 273 111.0626 283 112.1577 293 113.1692 274 111.1761 284 112.2625 294 113.2660 275 111.2887 285 112.3665 295 113.3621 276 111.4003 286 112.4697 296 113.4573 277 111.5111 287 112.5720 297 113.5519 278 111.6210 288 112.6735 298 113.6456 279 111.7301 289 112.7742 299 113.7387 280 111.8383 290 112.8742 300 113.8310 301 113.9225 311 114.7993 321 115.6091 302 114.0134 312 114.8832 322 115.6866 303 114.1035 313 114.9664 323 115.7635 304 114.1929 314 115.0490 324 115.8397 305 114.2816 315 115.1309 325 115.9154 306 114.3696 316 115.2122 326 115.9905 307 114.4569 317 115.2929 327 116.0650 308 114.5435 318 115.3729 328 116.1389 309 114.6295 319 115.4522 329 116.2122 310 114.7147 320 115.5310 330 116.2849

Month Factor Month Factor Month Factor 331 116.3571 341 117.0479 351 117.6860 332 116.4286 342 117.1140 352 117.7471 333 116.4997 343 117.1796 353 117.8077 334 116.5701 344 117.2447 354 117.8678 335 116.6400 345 117.3093 355 117.9274 336 116.7093 346 117.3733 356 117.9866 337 116.7781 347 117.4369 357 118.0453 338 116.8464 348 117.4999 358 118.1035 339 116.9141 349 117.5624 359 118.1613 340 116.9813 350 117.6245 360 118.2186 361 118.2754 371 118.8198 381 119.3226 362 118.3318 372 118.8719 382 119.3708

Month Factor Month Factor Month Factor 363 118.3878 373 118.9236 383 119.4185 364 118.4433 374 118.9749 384 119.4659 365 118.4984 375 119.0258 385 119.5129 366 118.5530 376 119.0762 386 119.5595 367 118.6072 377 119.1263 387 119.6057 368 118.6610 378 119.1760 388 119.6516 369 118.7144 379 119.2253 389 119.6971 370 118.7673 380 119.2741 390 119.7423 391 119.7871 392 119.8315 393 119.8756 394 119.9194 395 119.9628 396 120.0058 397 120.0485 398 120.0909 399 120.1330 400 120.1747

Table 65.D.2.a.(6) Leasehold Interest Coverage Factors

b. Tenants Lease Interest - Method 2

The premium for Tenant's Lease Interest may also be calculated using the following rules:

(1) Determine the gross leasehold interest per month.

(2) Develop an average net leasehold interest amount for the policy term as follows:

Calculate net leasehold interest factors for the unexpired portion of the lease, in months, at policy inception and at policy expiration by using the following formula and the values in Table 65.D.2.b.(2) Values:

Net Leasehold Interest Factor =

A(1-V**(n)),

where n is the number of months.

Table 65.D.2.b.(2) Values gives values of A and V for various rates of interest.

Effective Annual Rate

A

V

5% 245.45154 .99594241 6% 205.44212 .99515603 7% 176.86140 .99437764 8% 155.42358 .99360710 9% 138.74777 .99284425 10% 125.40537 .99208894 11% 114.48729 .99134104 12% 105.38748 .99060040 13% 97.68636 .98986689 14% 91.08420 .98914037 15% 85.36125 .98842073

Table 65.D.2.b.(2) Values

(3) Add together the two net leasehold interest factors determined in Paragraph (2) and divide the result by 2;

(4) Multiply the result in Paragraph (3) by the gross leasehold interest per month to determine the average net leasehold interest for the policy term;

(5) Multiply the average net leasehold interest in hundreds for the policy term by the 80% coinsurance building rate for each covered cause of loss.

c. Bonus Payments, Improvements And Betterments And Prepaid Rent

(1) Determine the average net leasehold interest for the policy term by determining the average of the:

(a) Monthly leasehold interest multiplied by number of months remaining in the lease at policy inception; and

(b) Monthly leasehold interest multiplied by number of months remaining in the lease at policy expiration.

(2) Multiply the average net leasehold interest in hundreds by the 80% coinsurance building rate for each covered cause of loss to develop the premium.

3. Cancellation

If the policy is cancelled, compute the earned premium based on the average net leasehold interest for the expired term in the same manner used to calculate the original premium.

E. Rating Examples


66. LEGAL LIABILITY COVERAGE FORM


1. This form provides:

a. Coverage for damages for which the insured is legally liable arising from direct physical loss or damage, including loss of use, to tangible property of others in the insured's care, custody, or control up to the limit of insurance shown in the Declarations.

b. Defense coverage against claims covered under Paragraph a.

2. Under this form, defense coverage and coverage for damages for which the insured is legally liable do not apply when such damages arise solely by reason of the insured's assumption of liability in a contract or agreement.

This exclusion is contained in the Causes Of Loss Forms - Basic, Broad and Special. However, the exception to this exclusion affords coverage under Legal Liability Coverage Form CP 00 40 for contractual liability for building damage resulting from a burglary or robbery, provided that the building is Covered Property under Form CP 00 40 and that assumption of liability was executed prior to the burglary or robbery.

B. Forms

1. Use Form CP 00 40.

2. Use Legal Liability Coverage Schedule Endorsement CP DS 05 or the Declarations to describe:

a. The insured's location and occupancy.

b. The property to which coverage applies.

c. The limits of insurance.

C. Ineligibility

Do not use Form CP 00 40 for a contractor on property under construction or being worked upon by the contractor.

D. Rules

1. Additional Insurable Interests

a. Additional insurable interests may be included without additional premium except as provided in the following:

b. Multiply the rates by 1.25 if the following additional insureds are included:

(1) General lessees, managers or operators of premises, in policies covering tenants or lessees of such premises.

(2) Employees other than executive officers or partners in policies covering their employers.

c. The following must not be included as additional insureds:

(1) Contractors or sub-contractors, in policies covering tenants or lessees of premises.

(2) Tenants, lessees, concessionaires or exhibitors, in policies covering general lessees, managers or operators of premises.

2. Deductibles

Deductibles must not be applied.


1. Real Property


2. Personal Property

Multiply the 80% coinsurance personal property rate by .50.

F. Newly Acquired Property - Increased Limit Option


The $250,000 per location building limit contained in the Newly Acquired Property Coverage Extension of the Legal Liability Coverage Form may be increased in accordance with these rules.

2. Form

Use Newly Acquired or Constructed Property - Increased Limit Endorsement CP 04 25.

3. Rules

a. Building Coverage

Endorsement CP 04 25 applies only to buildings that come under the insured's care, custody or control after the beginning of the policy period.

b. Causes Of Loss

Endorsement CP 04 25 must be written for the same causes of loss as are covered under the Legal Liability Coverage Form.


Refer to company.

67. MORTGAGEHOLDERS ERRORS AND OMISSIONS COVERAGE


1. This form covers a lending institution or other mortgage servicing agency against losses arising out of its failure to have in force proper insurance to protect the mortgaged property as a result of error or accidental omission.

2. The form covers:

a. Under Coverage A - Mortgageholders' Interest, the causes of loss (subject to certain exclusions) against which the insured mortgageholder customarily requires mortgagors to provide insurance under policies that protect the insured's interest.

b. Under Coverage B - Property Owned or Held in Trust, the Basic causes of loss except vandalism and sprinkler leakage for a period not exceeding 90 days.

c. Under Coverage C - Mortgageholders' Liability, liability and defense costs for damages arising from the insured's mortgage fiduciary or service agent capacity.

d. Under Coverage D - Real Estate Tax Liability, liability for unpaid real estate taxes up to 15% of the Limit of Insurance shown in the Declarations as applicable to Mortgageholders' Errors And Omissions Coverage Form CP 00 70.

B. Form


2. Do not attach Commercial Property Conditions Form CP 00 90 to this form. The Commercial Property Conditions, to the extent they are modified by these coverages, are included directly in the form.

3. Do not attach a Causes of Loss Form to this form.

C. Rules

1. Number Of Mortgages

Include in the Premises Description of the Declarations the estimated number of mortgage loans which will be owned or serviced by the insured during the term of the policy.

2. Single Interest

Form CP 00 70 must cover one named insured and must not be endorsed to add names of servicing agents or other interests.


1. Determine the premium based on the estimated average number of mortgage loans and the limit of insurance using the table shown in the multistate rates.

2. For limits of insurance not shown in the table, use the rate for the next highest limit.

68. TOBACCO IN SALES WAREHOUSES (Class Code 1502)


The Tobacco Sales Warehouses Coverage Form CP 00 80 is an annual reporting form that covers direct physical loss of or damage to tobacco in sales warehouses located in or on the building or structure described in the Declarations.

B. Form

Use Form CP 00 80.

C. Eligibility

Coverage applies only to tobacco in sales warehouses. For coverage on buildings, furniture and fixtures, machinery and equipment and other types of property, refer to Building and Personal Property Coverage Form CP 00 10.

D. General Rules

1. Term

Issue policies for a term of one year or less. Coverage applies to tobacco in sales warehouses only between 12:01 A.M. of the 15th day before the opening of the regular auction season and 12:01 A.M. of the 15th day following the Official Closing Date of the regular auction season.


Do not write insurance on a blanket basis.

3. Coinsurance

Coinsurance does not apply to Form CP 00 80.

E. Reporting Rules

The provisions of Form CP 00 80 require the insured to report tobacco sales at each location and to pay premium on the amount of sales reported. The form requires that reports be filed within 30 days of the close of the auction season. Reports can be filed in any form provided they are in writing.


1. Provisional Premium

Compute the provisional premium separately for each location at inception as shown in the multistate rates.

2. Increases In Limits Of Insurance

Charge additional provisional premium calculated pro rata for the number of weeks remaining in the auction season on the amount of increase in the limit of insurance using the full 80% coinsurance contents rates applying to the location at the time of increase.

3. Final Premium

a. Premium Calculation

(1) Multiply the gross sales reported in hundreds by the 80% coinsurance contents rate applicable at inception.

(2) Multiply the result of Paragraph (1) by:

(a) .01 for property located in:

Florida North Carolina Georgia South Carolina Maryland Virginia

(b) .03 for property located anywhere else.

b. Individual Locations

If the sum of the premiums for the individual locations is:

(1) Greater than the provisional premium, charge the insured for the excess premium.

(2) Less than the provisional premium, refund any excess premium paid to the insured.

c. Cancellation Mid-Season

If the policy is cancelled during the auction season, calculate final premium based on the gross sales for the period of coverage. If necessary, request the additional sales detail from the insured.

69. STANDARD PROPERTY POLICY


The Standard Property Policy CP 00 99 is a self-contained property damage form that may be used in place of the Building and Personal Property Coverage Form CP 00 10, a Causes of Loss form and associated conditions forms.

Form CP 00 99 is similar to Form CP 00 10 except for the following:

1. The provisions of the following forms are contained in Form CP 00 99:

a. Common Policy Conditions Form IL 00 17;

b. Commercial Property Conditions Form CP 00 90;

c. Causes of Loss - Basic Form CP 10 10.

2. 5 days' notice of cancellation to the insured is permitted - 10 days' for the mortgageholder.

3. There is no coverage for buildings vacant or unoccupied after:

a. 30 days for Vandalism;

b. 60 days for any other Cause of Loss.

4. Replacement Cost, Agreed Value and Inflation Guard Optional Coverages do not apply.

5. An increase in hazard provision is included.

6. The Coverage Extensions are limited to the state in which the described property is located.

B. Forms


2. Attach Condominium Association Changes - Standard Property Policy Endorsement CP 17 99 when condominium associations are covered.

3. Attach Condominium Commercial Unit Owners Changes - Standard Property Policy Endorsement CP 17 98 to provide coverage for commercial unit owners.

4. Attach Builders Risk Changes - Standard Property Policy Endorsement CP 11 99 to provide coverage for buildings under construction.

5. Also, attach any state endorsements that would normally apply to Form CP 00 10.

C. Rules

1. The rules applicable to Form CP 00 10 apply to this form except as indicated in Paragraphs 2., 3. and 4.

2. Coverage under Form CP 00 99 must be written for the Fire, Lightning and Explosion Causes of Loss.

3. Additionally, Form CP 00 99 provides optional coverage for the following causes of loss:

a. Windstorm or Hail, Smoke, Aircraft or Vehicles, Riot or Civil Commotion, Sinkhole Collapse, Volcanic Action. Refer to Rule 74. to exclude Windstorm or Hail and use Windstorm Or Hail Exclusion Endorsement CP 10 54.

b. Vandalism (in addition to perils in Paragraph a.).

c. Sprinkler Leakage (in addition to perils in Paragraph a.).

4. Rule 40., Builders' Risk Coverage Form, applies when Endorsement CP 11 99 is attached to Form CP 00 99.


1. Use the rates and rating procedures that apply under Rule 70., except as indicated in Paragraphs 2. and 3.

2. For Fire, Lightning, Explosion, Vandalism and Sprinkler Leakage Causes of Loss, use the Basic Group I rate multiplied by .98. Refer to Rule 74. to delete Vandalism or Sprinkler Leakage if they are not Covered Causes of Loss. Apply the .98 multiplier after any such adjustments.

3. For the Windstorm or Hail, Smoke, Aircraft or Vehicles, Riot or Civil Commotion, Sinkhole Collapse and Volcanic Action Causes of Loss, use the Basic Group II rate multiplied by .98.

SECTION VI-CAUSES OF LOSS FORM RULES

SECTION VI-CAUSES OF LOSS FORM RULES

70. CAUSES OF LOSS - BASIC FORM

The following is added to Paragraph D.2.:

Use the 80% or higher Coinsurance Clause for all property located in Monroe County.

Paragraph E.2.c.(1) is replaced by the following:

E. Rating Procedure

2. Property Damage - Group II Causes Of Loss

c. Coinsurance

(1) Specific Insurance

(a) For 90% or 100% coinsurance, use the same conversion factors as used for Basic Group I.

(b) For 70% coinsurance multiply the 80% coinsurance rate by 1.5.

(c) For less than 70% coinsurance, multiply the 80% coinsurance rate by 3.0 to convert the 80% coinsurance rate to a less than 70% coinsurance or flat rate.

The following is added to Paragraph E.:

3. Windstorm Loss Mitigation For Residential Properties

a. Explanation

This rule provides credits for windstorm damage mitigation in response to Florida Statutes, subsection (1) of 627.0629 which requires that, "a rate filing for residential property insurance must include appropriate discounts, credits, or other rate differentials, or appropriate reductions in deductibles, for properties on which fixtures actuarially demonstrated to reduce the amount of loss in a windstorm have been installed".

b. Eligibility

(1) Properties Eligible For Rate Credit

The following properties are eligible for a rate credit when all buildings at the described premises comply with the requirements set forth in Paragraph (2) Windstorm Loss Mitigation Features:

CSP Class Codes

0074 0079 0312 0331 0343 0075 0196 0313 0332 0076 0197 0321 0333 0077 0198 0322 0341 0078 0311 0323 0342

(2) Windstorm Loss Mitigation Features

(a) When the policy covers the peril of Windstorm or Hail, a residential risk located in the State of Florida may be eligible for a rate credit if one or more of the following loss mitigation features or construction techniques exists:

(i) Roof Covering/Roof Deck;

(ii) Roof Deck Attachment;

(iii) Roof-To-Wall Connection;

(iv) Opening Protection;

(v) Secondary Water Resistance;

(vi) Roof Shape; or

(vii) Internal Pressure Design.

(b) The loss mitigation features listed in Paragraph (a) are described in detail in Paragraph c. Credits are provided via application of a rate modification factor to the applicable Basic Group II rate; factors are presented in the Windstorm Loss Mitigation Factor Tables in Paragraph f.(3).

c. Description Of Building Features Or Building Location

The following descriptions are provided to assist in the determination of the applicable factor. They focus on terminology in the category headings, in the tables of Paragraph f.(3), which require further explanation.

(1) Construction Year/Design Code

(a) Existing Construction: Buildings constructed prior to 2002, and built to any code or standard other than Florida Building Code (FBC) 2001.

(b) New Construction: Buildings constructed in 2002 or later, and subject to the provisions of Florida Building Code (FBC) 2001.

(2) Building Group

(a) Group I: Buildings with a masonry or wood frame, one to three stories in height (Disregard basements in story count.); or

(b) Group II: Buildings with a steel or concrete frame, or of reinforced masonry construction, which are 60 feet or less in height; or

(c) Group III: Buildings with a steel or concrete frame, which are greater than 60 feet in height.

(3) Terrain Exposure Categories Of The Florida Building Code

(a) High Velocity Hurricane Zone: Miami-Dade and Broward Counties

(b) Terrain C (open terrain with scattered obstructions) applies to the following unless located in Miami-Dade or Broward County:

(i) Barrier islands (defined in Florida law as the land area from the seasonal high water line to a line 5,000 feet landward from the Coastal Construction Control line); and

(ii) All other areas within 1,500 feet of the Coastal Construction Control line, or within 1,500 feet of the mean high tide line, whichever is less.

(c) Terrain B (urban, suburban and wooded areas) applies to all other locations in Florida that are not in the High Velocity Hurricane Zone or Terrain C category by virtue of their terrain exposure definitions.

(4) Roof Coverings/Roof Deck

(a) Florida Building Code (FBC) Equivalent: Roof coverings with specifications of the 1994 South Florida Building Code (SFBC) that required improved attachment methods and testing to a similar protocol to that of FBC 2001 Section 1504;

(b) Non-Florida Building Code (Non-FBC) Equivalent: Roof coverings that do not meet the requirements of the FBC Equivalent; or

(c) Reinforced Concrete Roof Deck: A roof deck that is designed and constructed in accordance with the provisions of American Concrete Institute (ACI) 318 Building Code Requirements For Structural Concrete, including integral construction with a masonry wall system.

(5) Roof Deck Attachment

(a) Level A: Plywood/Oriented Strand Board (OSB) with 2 inch nails spaced at 6 inches from the edge of the plywood and 12 inches in the field on 24 inch truss spacing;

(b) Level B: Plywood/OSB with 2 1/2 inch nails spaced at 6 inches from the edge of the plywood and 12 inches in the field on 24 inch truss spacing;

(c) Level C: Plywood/OSB with 2 1/2 inch nails spaced at 6 inches from the edge of the plywood and 6 inches in the field on 24 inch truss spacing; or

(d) Level D: Dimensional Lumber and Tongue and Groove Decks composed of 3/4 inch thick boards with nominal widths of 4 inches or more.

(6) Roof-To-Wall Connection

(a) Toe-Nail Connection: Three (3) nails driven at an oblique angle through the rafter and into the top plate;

(b) Clips: Pieces of metal that are nailed into the side of the rafter/truss and into the side of the top plate or wall stud. The metal does not wrap around the top of the rafter/truss, and the clip is only located on one side of the connection;

(c) Single Wraps: A single strap that is attached to the side and/or bottom of the top plate and is nailed to the rafter/truss; or

(d) Double Wraps: Straps that are wrapped on both sides, are attached to the side and/or bottom of the top plate, and are nailed to the rafter/truss.

(7) Opening Protection

(a) No or None: Glazed openings that are not protected for impact resistance;

(b) Hurricane Protection Type, Yes or With Opening Protection: All glazed openings protected to meet the requirements of one of the current Miami-Dade Code standards, as follows:

(i) Standard Building Code SSTD-12 for large missile impact testing (9 pounds);

(ii) ASTM debris impact standard E 1886 and test E 1996; or

(iii) Miami Dade Hurricane Impact Protocols PA 201 (large missile impact test), 202 (structural pressure, air, water, and forced entry test) and 203 (test for cyclic pressure).

(8) Roof Shape

(a) Flat; or

(b) Hip shape: Roof has sloping ends and sloping sides down to the roof eaves line; or

(c) Gable: Roof has vertical walls that extend all the way to the top of the inverted V.

(9) Secondary Water Resistance

Secondary water resistance is achieved by applying:

(a) Self Adhering Modified Bitumen Tape to the plywood joints; or

(b) Foamed polyurethane structural adhesive from inside the attic to cover the joints between all plywood sheets.

(10) Wind Speed

(a) Design Speed, measured in miles per hour, is the wind speed that the building is designed or mitigated to withstand, based on the fastest mile, as addressed in the SBC and ASCE 7-88. Wind speed was measured by fastest mile until the adoption of the FBC which converted to three-second gust wind speed;

(b) Gust Wind Speed of Design, measured in miles per hour, is the wind speed that the building is designed or mitigated to withstand, according to the FBC 2001, which established basic Wind Design Speeds for each FBC wind speed zone;

(c) Gust Wind Speed of Location, measured in miles per hour, is the peak gust wind speed corresponding to the location of the building, as determined by the Wind-Borne Debris Regions outlined in FBC Section 1606.1.5.

(11) Design Exposure

Design exposure refers to terrain roughness:

(a) Standard is used for all buildings built according to the 1982 or earlier Design Code (SBC 1976); or

(b) B applies to urban and suburban areas; or

(c) C applies to open terrain; or

(d) D applies to buildings within 1500 feet of the coast.

(12) Wind-Borne Debris Region

Wind-borne debris regions, established by FBC Section 1606.1.5, include:

(a) All areas where the basic wind speed is 120 mph or greater.

(b) Areas of Citrus, Hernando, Jefferson, Levy, Taylor and Wakulla Counties that are within one mile of the coast.

(13) Internal Pressure Design

(a) Enclosed building design exists where the envelope is completely closed, and only wind leaking around doors, windows, framing, etc. is allowed to affect the interior of the building; or

(b) Partially enclosed building design exists where openings are assumed to exist in one or more faces of the building. These openings allow the wind to create pressures inside the building.

d. Form

Windstorm Protective Devices Endorsement CP 12 09 may be used.

e. Proof Of Compliance

A company may require proof which substantiates the existence of the loss mitigation features displayed in the loss mitigation factor tables, for example, certification by a registered or licensed design professional. The insured is responsible for the expense associated with substantiating the existence of the loss mitigation features.

f. Rate Modification

(1) Existing Construction

(a) Existing construction may be categorized as a Group I, II or III building, as defined in Paragraph c.(2).

(i) For Group I existing construction, the features of the building or its location that determine the applicable factor are terrain category, roof covering, roof deck attachment, roof-to-wall connection, opening protection, roof shape, and secondary water resistance.

(ii) For Group II existing construction, the features of the building or its location that determine the applicable factor are terrain category, design code, design speed, roof covering, opening protection, roof deck, and secondary water resistance.

(iii) For Group III existing construction, the features of the building or its location that determine the applicable factor are terrain category, design code, design speed, design exposure, roof covering, opening protection, roof deck, and secondary water resistance.

(b) Refer to the tables under Paragraph (3)(a) for the factors for Existing Construction. There are ten tables (#1 through #10) under Paragraph (3)(a). Select the appropriate table based on the following table descriptions (the description also appears as part of the caption at the bottom of the table):

Table #1 Group I - Terrain B - Non-FBC Equivalent

Table #2 Group I - Terrain B - FBC Equivalent

Table #3 Group I - Terrain C - Non-FBC Equivalent

Table #4 Group I - Terrain C - FBC Equivalent

Table #5 Group II - Terrain B

Table #6 Group II - Terrain C

Table #7 Group III - Terrain B - Design Code 1982 or Earlier (SBC 1976)

Table #8 Group III - Terrain B - Design Code 1983 to 2001 (SBC 1988)

Table #9 Group III - Terrain C - Design Code 1982 or Earlier (SBC 1976)

Table #10 Group III - Terrain C - Design Code 1983 to 2001 (SBC 1988)

(2) New Construction

(a) New construction may be categorized as a Group I, II or III building, as defined in Paragraph c.(2).

(i) For Group I construction, the features of the building or its location that determine the applicable factor are terrain category, roof deck, gust wind speed of location, gust wind speed of design, internal pressure design, wind-borne debris region, roof shape, opening protection, and secondary water resistance.

(ii) For Group II construction, the features of the building or its location that determine the applicable factor are roof deck, terrain category, gust wind speed of location, gust wind speed of design, wind-borne debris region, internal pressure design, opening protection, and secondary water resistance.

(iii) For Group III construction, the features of the building or its location that determine the applicable factor are roof deck, terrain category, gust wind speed of location, gust wind speed of design, wind-borne debris region, internal pressure design, opening protection, and secondary water resistance.

(b) Refer to the tables under Paragraph (3)(b) for the factors for New Construction. There are three tables (#1 through #3) under Paragraph (3)(b). Select the appropriate table based on the following table descriptions (the description also appears as part of the caption at the bottom of the table):

Table #1 Group I

Table #2 Group II

Table #3 Group III

(3) Windstorm Loss Mitigation Factors

Multiply the Basic Group II building and personal property rates (as developed by the company from the appropriate loss costs) by the applicable factor from the following tables. (Refer to Rule 70.E.2.d.(5) in the state loss costs for potential applicability of a minimum Basic Group II rate.)

(a) Existing Construction (Built Prior To 2002)

Roof Cover

Roof Deck Attachment

Roof-Wall Connection

Opening Protection

TERRAIN B ROOF SHAPE

FLAT

BRACED/ UNBRACED GABLE HIP

No SWR SWR

No SWR SWR

No SWR SWR

Non-FBC Equiv

.

A

Toe Nails None 1.00 0.78 0.63 0.59 0.55 0.51 Hurricane 0.78 0.54 0.36 0.31 0.30 0.25 Clips None 0.91 0.68 0.49 0.45 0.40 0.36 Hurricane 0.76 0.52 0.30 0.25 0.24 0.19 Single

Wraps None 0.89 0.66 0.45 0.41 0.36 0.33

Hurricane 0.76 0.51 0.30 0.25 0.24 0.18 Double

Wraps None 0.89 0.65 0.43 0.39 0.36 0.32

Hurricane 0.76 0.51 0.29 0.24 0.24 0.18

Non-FBC Equiv

.

B


Wraps None 0.57 0.29 0.33 0.28 0.28 0.23


Wraps None 0.51 0.23 0.26 0.21 0.24 0.19

Hurricane 0.43 0.14 0.17 0.12 0.17 0.11

Non-FBC Equiv

.

C And D


Wraps None 0.56 0.28 0.33 0.28 0.28 0.23


Wraps None 0.50 0.21 0.25 0.20 0.24 0.19

Hurricane 0.42 0.12 0.17 0.11 0.17 0.11 Reinforced Concrete Roof

Deck None 0.18 0.18 0.18 0.18 0.18 0.18

Hurricane 0.14 0.14 0.14 0.14 0.14 0.14

Equiv. = Equivalent

FBC = Florida Building Code

SWR = Secondary Water Resistance

Table 70.E.3.f.(3)(a)#1 Windstorm Loss Mitigation Factors For Existing Construction (Built Prior To 2002) - Group I Buildings - Terrain B - Non-FBC Equivalent

Roof Cover



Opening Protection

TERRAIN B ROOF SHAPE

FLAT


No SWR SWR

No SWR SWR

No SWR SWR

FBC Equiv

.

A


Wraps None 0.54 0.53 0.40 0.39 0.32 0.31


Wraps None 0.53 0.52 0.38 0.37 0.31 0.31

Hurricane 0.40 0.40 0.24 0.23 0.18 0.17

FBC Equiv

.

B


Wraps None 0.28 0.27 0.29 0.27 0.24 0.23


Wraps None 0.22 0.21 0.22 0.20 0.20 0.18

Hurricane 0.14 0.13 0.13 0.12 0.13 0.11

FBC Equiv

.

C And D


Wraps None 0.27 0.26 0.28 0.27 0.24 0.23


Wraps None 0.20 0.19 0.21 0.20 0.19 0.18


Deck None

0.18 0.18 0.18 0.18 0.18 0.18 Hurricane 0.14 0.14 0.14 0.14 0.14 0.14

Equiv. = Equivalent



Table 70.E.3.f.(3)(a)#2 Windstorm Loss Mitigation Factors For Existing Construction (Built Prior To 2002) - Group I Buildings - Terrain B - FBC Equivalent

Roof Cover



Opening Protection

TERRAIN C ROOF SHAPE FLAT


No SWR SWR

No SWR SWR

No SWR SWR

Non-FBC Equiv

.

A


Wraps None 0.92 0.80 0.69 0.66 0.62 0.59


Wraps None 0.91 0.79 0.66 0.63 0.61 0.58

Hurricane 0.68 0.53 0.35 0.30 0.29 0.24

Non-FBC Equiv

.

B


Wraps None 0.73 0.57 0.59 0.56 0.54 0.51


Wraps None 0.63 0.47 0.49 0.46 0.46 0.42

Hurricane 0.39 0.18 0.22 0.15 0.21 0.14

Non-FBC Equiv

.

C And D


Wraps None 0.72 0.56 0.59 0.56 0.54 0.51


Wraps None 0.62 0.45 0.49 0.46 0.46 0.42


Deck None 0.20 0.20 0.20 0.20 0.20 0.20

Hurricane 0.12 0.12 0.12 0.12 0.12 0.12

Equiv. = Equivalent



Table 70.E.3.f.(3)(a)#3 Windstorm Loss Mitigation Factors For Existing Construction (Built Prior To 2002) - Group I Buildings - Terrain C - Non-FBC Equivalent

Roof Cover



Opening Protection

TERRAIN C ROOF SHAPE

FLAT


No SWR SWR

No SWR SWR

No SWR SWR

FBC Equiv

.

A


Wraps None 0.73 0.73 0.66 0.65 0.59 0.58


Wraps None 0.72 0.71 0.63 0.62 0.57 0.56

Hurricane 0.46 0.46 0.30 0.29 0.25 0.23

FBC Equiv

.

B


Wraps None 0.55 0.54 0.56 0.55 0.51 0.50


Wraps None 0.46 0.45 0.46 0.45 0.42 0.41

Hurricane 0.18 0.16 0.17 0.15 0.16 0.14

FBC Equiv

.

C And D


Wraps None 0.54 0.54 0.56 0.55 0.51 0.49


Wraps None 0.44 0.43 0.46 0.46 0.42 0.41


Deck None

0.20 0.20 0.20 0.20 0.20 0.20 Hurricane 0.12 0.12 0.12 0.12 0.12 0.12

Equiv. = Equivalent



Table 70.E.3.f.(3)(a)#4 Windstorm Loss Mitigation Factors For Existing Construction (Built Prior To 2002) - Group I Buildings - Terrain C - FBC Equivalent

Design Code

Design Speed (MPH)

Roof Cover

Opening Protection

TERRAIN B ROOF DECK WOOD METAL REINFORC

ED CONCRETE

No SWR SWR

No SWR SWR

1982 Or Earlier (SBC 1976)

90

Non-FBC No 0.88 0.68 0.57 0.36 0.29 Equivalent Yes 0.79 0.58 0.40 0.19 0.13 FBC No 0.60 0.59 0.37 0.35 0.29 Equivalent Yes 0.51 0.50 0.21 0.19 0.13

100


110


≥120


1983 To 2001 (SBC 1988)

90


100


110



SBC = Standard Building Code


Table 70.E.3.f.(3)(a)#5 Windstorm Loss Mitigation Factors For Existing Construction (Built Prior To 2002) - Group II Buildings - Terrain B

Design Code

Design Speed (MPH)

Roof Cover

Opening Protection

TERRAIN C ROOF DECK WOOD METAL REINFORC

ED CONCRETE

No SWR SWR

No SWR SWR

1982 Or Earlier (SBC 1976)

≤100


110


120


130


1983 To 2001 (SBC 1988)

90


100


110





Table 70.E.3.f.(3)(a)#6 Windstorm Loss Mitigation Factors For Existing Construction (Built Prior To 2002) - Group II Buildings - Terrain C

Design Code

Design Speed (MPH)

Design Exposure

Roof Cover

Opening Protection

TERRAIN B ROOF DECK METAL REINFORCED

CONCRETE No SWR SWR

1982 Or

Earlier (SBC 1976)

90

Non-FBC

No 1.00 0.69 0.53

Equiv. Yes 0.65 0.34 0.15 FBC No 0.72 0.68 0.53 Equiv. Yes 0.38 0.33 0.15

100

Non-FBC

No 1.00 0.65 0.53

Equiv. Yes 0.63 0.28 0.16 FBC No 0.69 0.64 0.53 Standard Equiv. Yes 0.33 0.28 0.16

110

Non-FBC

No 1.00 0.71 0.60


≥120

Non-FBC

No 1.00 0.70 0.56


Equiv. = Equivalent




Table 70.E.3.f.(3)(a)#7 Windstorm Loss Mitigation Factors For Existing Construction (Built Prior To 2002) - Group III Buildings - Terrain B - Design Code 1982 Or Earlier (SBC 1976)

Design Code

Design Speed (MPH)

Design Exposure

Roof Cover

Opening Protection

TERRAIN B ROOF DECK METAL REINFORCED

CONCRETE No SWR SWR

1983 To

2001 (SBC 1988)

90

Non-FBC

No 1.00 0.74 0.63

B Equiv. Yes 0.52 0.25 0.16 FBC No 0.76 0.73 0.63 Equiv. Yes 0.29 0.25 0.16 Non-

FBC No

0.50 0.22 0.20 C Equiv. Yes 0.42 0.16 0.15 FBC No 0.26 0.22 0.20 Equiv. Yes 0.20 0.16 0.15 Non-

FBC No

0.45 0.18 0.17 D Equiv. Yes 0.40 0.15 0.14 FBC No 0.21 0.18 0.17 Equiv. Yes 0.18 0.15 0.14

1983 To

2001 (SBC 1988)

100

Non-FBC

No 1.00 0.67 0.57


FBC No


FBC No


1983 To

2001

110

Non-FBC

No 1.00 0.63 0.54


FBC No

0.66 0.29 0.25 C Equiv. Yes 0.52 0.16 0.15 FBC No 0.37 0.28 0.25

(SBC 1988)

Equiv. Yes 0.25 0.16 0.15 Non-

FBC No


Equiv. = Equivalent




Table 70.E.3.f.(3)(a)#8 Windstorm Loss Mitigation Factors For Existing Construction (Built Prior To 2002) - Group III Buildings - Terrain B - Design Code 1983 To 2001 (SBC 1988)

Design Code

Design Speed (MPH)

Design Exposure

Roof Cover

Opening Protection

TERRAIN C ROOF DECK METAL REINFORCED

CONCRETE No SWR SWR

1982 Or

Earlier (SBC 1976)

≤100

Non-FBC

No 1.00 0.75 0.63


110

Non-FBC

No 1.00 0.79 0.70

Equiv. Yes 0.55 0.33 0.19 FBC No 0.83 0.79 0.69 Standard Equiv. Yes 0.38 0.33 0.19

120

Non-FBC

No 1.00 0.79 0.66


130

Non-FBC

No 1.00 0.80 0.66


Equiv. = Equivalent




Table 70.E.3.f.(3)(a)#9 Windstorm Loss Mitigation Factors For Existing Construction (Built Prior To 2002) - Group III Buildings - Terrain C - Design Code 1982 Or Earlier (SBC 1976)

Design Code

Design Speed (MPH)

Design Exposure

Roof Cover

Opening Protection

TERRAIN C ROOF DECK METAL REINFORCED

CONCRETE No SWR SWR

1983 To

2001 (SBC 1988)

90

Non-FBC

No 1.00 0.88 0.78


FBC No


FBC No


1983 To

2001 (SBC 1988)

100

Non-FBC

No 1.00 0.82 0.73


FBC No


FBC No

0.46 0.26 0.24 D Equiv. Yes 0.35 0.16 0.15

FBC No 0.30 0.26 0.24 Equiv. Yes 0.20 0.16 0.15

1983 To

2001 (SBC 1988)

110

Non-FBC

No 1.00 0.82 0.73


FBC No


FBC No

0.54 0.34 0.32 D Equiv. Yes 0.36 0.16 0.15 FBC No 0.39 0.34 0.32 Equiv. Yes 0.22 0.16 0.15 Equiv. = Equivalent




Table 70.E.3.f.(3)(a)#10 Windstorm Loss Mitigation Factors For Existing Construction (Built Prior To 2002) - Group III Buildings - Terrain C - Design Code 1983 To 2001 (SBC 1988)

(b) New Construction (Built In 2002 Or Later)

FBC 2001 CONSTRUCTION ROOF SHAPE

Roof Deck

Terrain

WS (MPH)

WSD (MPH) IPD

WBDR

FLAT GABLE HIP No

OpeningProtection

With OpeningProtection

No OpeningProtection

With Opening Protection

No OpeningProtection


No SWR

SWR

No SWR

SWR

No SWR

SWR

No SWR

SWR

No SWR

SWR

No SWR

SWR

B 100 100 Encl.

No0.24 0.22 0.13 0.11 0.21 0.19 0.11 0.10 0.17 0.16 0.09 0.08

Other

Roof

Deck

B 100 110 Encl.

No0.19 0.18 0.12 0.11 0.17 0.16 0.11 0.10 0.14 0.23 0.09 0.08

B 100 ≥120 Encl.

No0.15 0.13 0.12 0.11 0.13 0.12 0.11 0.10 0.11 0.09 0.09 0.08

B 110 110 Encl.

No0.24 0.22 0.14 0.13 0.20 0.19 0.12 0.11 0.17 0.16 0.10 0.09

B 110 ≥120 Encl.

No0.17 0.16 0.14 0.13 0.15 0.14 0.12 0.11 0.12 0.11 0.10 0.09

B ≥120 ≥120 Encl.

No0.20 0.18 0.15 0.14 0.16 0.15 0.13 0.11 0.15 0.14 0.12 0.10

B and C

≥120 ≥120 PE Yes0.17 0.16 0.13 0.12 0.15 0.13 0.11 0.10 0.14 0.13 0.11 0.10

HVHZ

≥120 ≥120 Encl.

Yes 0.15 0.12 0.11 0.10 0.11 0.10

RCR

Deck

B Any Any Encl.

No0.13 0.13 0.11 0.11

0.13 0.13 0.11 0.11 0.13 0.13 0.11 0.11

B Any Any PE Yes 0.12 0.12 0.11 0.11 0.12 0.12 0.11 0.11 0.12 0.12 0.11 0.11 C Any Any PE Yes 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 HVH

Z Any Any Encl. Yes 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10

Encl. = Enclosed


HVHZ = High Velocity Hurricane Zone (Miami-Dade and Broward Counties)

IPD = Internal Pressure Design

PE = Enclosed or Partially Enclosed

RCR Deck = Reinforced Concrete Roof Deck


WBDR = Wind-Borne Debris Region

WS = Gust Wind Speed of Location

WSD = Gust Wind Speed of Design

Table 70.E.3.f.(3)(b)#1 Windstorm Loss Mitigation Factors For New Construction (Built In 2002 Or Later) - Group I Buildings

FBC 2001 CONSTRUCTION ENCLOSED/PARTIALLY ENCLOSED IPD

Roof Deck

Terrain

Gust Wind Speed Of Location (MPH)

Gust Wind Speed OfDesign (MPH)

WBDR

No Opening Protection


No SWR SWR No SWR SWR

Wood

or Metal Deck

B 100 100 No 0.32 0.30 0.15 0.13 B 100 110 No 0.25 0.23 0.14 0.12 B 100 ≥120 No 0.16 0.13 0.13 0.11 B 110 110 No 0.38 0.34 0.18 0.15 B 110 ≥120 No 0.22 0.18 0.17 0.13 B 120 ≥120 No 0.30 0.23 0.21 0.15 B and C ≥120 ≥120 Yes NA NA 0.23 0.17 HVHZ ≥120 ≥120 Yes NA NA 0.23 0.17

RCR Deck

B Any Any No NA 0.25 NA 0.15 B Any Any Yes NA 0.25 NA 0.15 C Any Any Yes NA 0.25 NA 0.17 HVHZ Any Any Yes NA NA NA 0.17




NA = not applicable




Table 70.E.3.f.(3)(b)#2 Windstorm Loss Mitigation Factors For New Construction (Built In 2002 Or Later) - Group II Buildings

FBC 2001 CONSTRUCTION ENCLOSED/PARTIALLY ENCLOSED IPD

Roof Deck

Terrain

Gust Wind Speed Of Location (MPH)

Gust Wind Speed OfDesign (MPH)

WBDR

No Opening Protection


No SWR SWR No SWR SWR

B 100 100 No 0.88 0.79 0.26 0.20

B 100 110 No 0.51 0.45 0.24 0.18

Metal Deck

B 100 ≥120 No 0.28 0.22 0.25 0.18 B 110 110 No 0.74 0.61 0.29 0.21 B 110 ≥120 No 0.37 0.30 0.29 0.20 B ≥120 ≥120 No 0.48 0.38 0.33 0.25 B and C ≥120 ≥120 Yes NA NA 0.34 0.26 HVHZ ≥120 ≥120 Yes NA NA 0.34 0.26

RCR Deck

B Any Any No NA 0.46 NA 0.23 B Any Any Yes NA 0.46 NA 0.23 C Any Any Yes NA 0.46 NA 0.23 HVHZ Any Any Yes NA NA NA 0.23




NA = not applicable




Table 70.E.3.f.(3)(b)#3 Windstorm Loss Mitigation Factors For New Construction (Built In 2002 Or Later) - Group III Buildings

4. Sinkhole Credit For Residential Properties

a. Properties Eligible For Rate Credit

Refer to Paragraph 3.b.(1) for the classifications of property which qualify as residential property risks.

b. Rate Modification

Apply the applicable factor to the Basic Group II building and personal property rates for a residential property risk:

(1) In the counties of Hernando and Pasco, apply a factor of .95.

(2) In the counties of Alachua, Citrus, Hillsborough, Lake, Marion, Pinellas, St. Lucie, Seminole, Sumter and Taylor, apply a factor of .99.

70. CAUSES OF LOSS - BASIC FORM

A. Description Of Covered Causes Of Loss

This form provides coverages for the causes of loss of fire, lightning, explosion, windstorm or hail, smoke, aircraft or vehicles, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse and volcanic action.

B. Forms

1. Use Causes Of Loss - Basic Form CP 10 10.

2. Use Grain Properties - Explosion Limitation Endorsement CP 10 51 to modify the definition of "Explosion" when insurance is written on grain elevators or processing plant buildings or structures that handle or store grain.

C. Eligibility

The following properties are eligible:

1. Risks eligible for specific rating under various Fire Rating Schedules.

2. Risks eligible for class rates under Rule 85.

D. Rules

1. Rating Groups

The Basic Causes of Loss are grouped as follows for purposes of rating:

a. Group I Causes Of Loss

Fire, Lightning, Explosion, Vandalism, Sprinkler Leakage.

b. Group II Causes Of Loss

Windstorm or Hail, Smoke, Aircraft or Vehicles, Riot or Civil Commotion, Sinkhole Collapse, Volcanic Action.

2. Limit And Coinsurance

The limit of insurance and Coinsurance Percentage for the Group I and Group II Causes of Loss must be the same.

E. Rating Procedure

1. Property Damage - Group I Causes Of Loss

a. Risk Classification

(1) Class Rated Risks

Refer to Classification Table to obtain Classification Description and CSP Class Code.

(2) Specific Rated Risks

Refer to Specific Property Information quote.

b. Building Construction

Refer to Rule 15. for Construction Definitions. For specifically rated risks, the Specific Property Information quote will provide the applicable CSP Construction Code.

c. Protection Class


Refer to Public Protection Classifications and Territory Codes.


Refer to Specific Property Information quote.

d. Territory (Applicable To Class Rated Risks)

(1) If applicable, refer to state rates to determine territorial multiplier applicable to the location of the property being insured. For Territory Codes, refer to Public Protection Classifications and Territory Codes.

(2) Apply territorial multipliers shown on the state rates to all Group I Class Rates (except for property rated under Special Class Rates).

e. Coinsurance


(a) Multiply the 80% coinsurance building or personal property rate by the following factors to convert the 80% rate to 90% or 100% coinsurance:

Percent Of Coinsurance

Factor

100% .90 90% .95

Table 70.E.1.e.(1)(a) Coinsurance Modification Factors - Group I

(b) If less than 80% coinsurance, see multistate rates.

(2) Blanket And Multiple Location Average Rated Coverages

Refer to Rules 34., 35. and 36. for coinsurance rating procedures for blanket and multiple location average rated coverages.

2. Property Damage - Group II Causes Of Loss

a. Symbols

· AA (Representing Superior Construction) · A (Representing Wind Resistive Construction), · AB (Representing Semi-Wind Resistive Construction)

and · B (Representing Ordinary Construction)

with or without a numerical (multiplicative) prefix are used to identify the Group II classification as follows:

(1) Rate tables in the state rates contain rates for Symbols AA, A, AB, and B. A numerical prefix is the factor by which the rate corresponding to the letter symbol is to be multiplied to determine the actual rate.

(2) Rates for specifically rated properties are included in the state rates. Refer to the Specific Property Information quote for the appropriate Basic Group II symbol.

(3) Basic Group II symbols for properties subject to Basic Group I class rates are determined from either Table 70.E.2.a.(4)(a) Construction Symbols or Table 70.E.2.a.(4)(b) Additional Classes.

(4) For property subject to Basic Group I Class Rates, determine the symbol as follows:

(a) All CSP Classes EXCEPT those listed in Table 70.E.2.a.(4)(b)

Locate the symbol in Table 70.E.2.a.(4)(a) Construction Symbols based on the Basic Group I Construction Type and Basic Group I Construction Code that apply to the risk.

The table also provides symbols which recognize roof construction of the following specifications:

(i) Joisted Masonry construction (Construction Code 2) where the entire roof is a minimum of 2 inches in thickness and is supported by timbers having a minimum dimension of 6 inches, or is documented to have a wind uplift classification of 90 or equivalent.

(ii) Non-Combustible construction (Construction Code 3) where the entire roof is constructed of a minimum of 2 inches of masonry on steel supports, or constructed of 22 gauge metal (or heavier) on steel supports, or documented to have a wind uplift classification of 90 or equivalent.

(iii) Masonry Non-Combustible construction (Construction Code 4) where the entire roof is constructed of a minimum of 2 inches of masonry on steel supports, or constructed of 22 gauge metal (or heavier) on steel supports, or documented to have a wind uplift classification of 90 or equivalent.

Construction Symbols

BG I

BG I

BG II

Construction Type

Construction Code

Symbol

Frame

1

B

Joisted Masonry

BG I

BG I

BG II

Construction Type

Construction Code

Symbol

Frame

1

B

Other Than Reinforced Masonry

ReinforcedMasonry

LowRise

High Rise

LowRise

HighRise

2 B AB AB AB See Paragraph (a)(i) AB AB AB AB

Non-Combustible

Light Steel

Other ThanLight Steel

LowRise

High Rise

LowRise

HighRise

3 B AB AB AB See Paragraph (a)(ii) AB AB AB AB

Masonry Non-Combustible


ReinforcedMasonry

LowRise

High Rise

LowRise

HighRise

4 Light Steel B AB AB AB 4 Other Than Light

Steel AB A A A

Light Steel AB A A A

See Paragraph

(a)(iii)

Other Than Light

Steel

A

AA

AA

AA

BG I

BG I

BG II

Construction Type

Construction Code

Symbol

Frame

1

B

Fire Resistive


ReinforcedMasonry

LowRise

High Rise

LowRise

HighRise

5 Light Steel AB A A A 5 Other Than Light

Steel A AA AA AA

6 Light Steel AB A A A 6 Other Than Light

Steel A AA AA AA

Table 70.E.2.a.(4)(a) Construction Symbols

(b) Other CSP Classes as listed in Table 70.E.2.a.(4)(b) Additional Classes

Locate the symbol in Table 70.E.2.a.(4)(b) Additional Classes based on the Basic Group I Construction Code and the CSP Classification Code that apply to the risk.

For Construction Codes 2, 3 and 4, certain roof construction determines the symbol as follows:

(i) For Joisted Masonry construction (Construction Code 2) where the entire roof is a minimum of 2 inches in thickness and is supported by timbers having a minimum dimension of 6 inches, or is documented to have a wind uplift classification of 90 or equivalent, use Symbol AB and the applicable numerical prefix, if any, shown in this Table.

(ii) For Non-Combustible construction (Construction Code 3) where the entire roof is constructed of a minimum of 2 inches of masonry on steel supports, or constructed of 22 gauge metal (or heavier) on steel supports, or documented to have a wind uplift classification of 90 or equivalent, use Symbol AB and the applicable numerical prefix, if any, shown in this Table.

(iii) For Masonry Non-Combustible construction (Construction Code 4) where the entire roof is constructed of a minimum of 2 inches of masonry on steel supports, or constructed of 22 gauge metal (or heavier) on steel supports, or documented to have a wind uplift classification of 90 or equivalent, use Symbol A and the applicable numerical prefix, if any, shown in this Table.

Additional Classes

BG I Construction Code

CSP Classification Code

1, 2, 3

4

5, 6

OPEN SIDES 4B 3AB 2A

0580 (Greenhouses)

4B

N/A

N/A

1150 (Builders' Risk)

2B

1 /2AB

A

0833, 1185, 1190 & 1200

For symbol, see Rule 85.L. in the multistate rates.

1300 (Baled Cotton and Cotton Seed Yards)

B

N/A

N/A

1650 (Lumber Yards)

4B

N/A

N/A

Table 70.E.2.a.(4)(b) Additional Classes

b. Territory

If applicable, refer to the territory section for ZIP code-based territory definitions, to determine the territory applicable to the location of the property being insured. For Territory Codes, refer to the Community Mitigation Classification Manual or the Territory Code Manual.

c. Coinsurance


(a) 80% Coinsurance

Multiply the 80% coinsurance building or personal property rate by the following factors.


Factor

100% .90 90% .95

Table 70.E.2.c.(1)(a) Coinsurance Modification Factors - Group II

(b) Less Than 80% Coinsurance

Multiply the 80% coinsurance rate by 3.0 to convert the 80% coinsurance rate to a less than 80% coinsurance or flat rate.


Refer to Rules 34., 35. and 36. for coinsurance rating procedure for blanket and multiple location average rated coverages.

d. Rates

See state rates.


1. Rate Calculations

a. Class Rated Risks

Select the appropriate building or personal property rate from the state rates based on the applicable items in Paragraphs (1) through (4).

(1) Classification

(2) Territory or Zone

(3) Construction or Symbol

(4) Protection

b. Specific Rated Risks

Refer to Specific Property Information quote to determine the rate.

c. Rate Factors

Apply rate factors to the annual rates in the following order, subject to Paragraph d.

(1) Protection class multipliers, if applicable, to class rated risks;

(2) Territorial multiplier, if applicable to class rated risks;

(3) Causes of loss exclusion adjustment;

(4) Coinsurance or flat rate adjustment;

(5) Factors or charges required by individual rules except as specified in Paragraphs (6) and (7);

(6) Municipal tax charges unless local requirements dictate otherwise; and

(7) Term or annual premium payment plan factor.

d. Rule

(1) With respect to Paragraph c.(3), refer to Rule 74.A.3. for the applicable adjustment to exclude coverage for Windstorm or Hail, Vandalism and/or Sprinkler Leakage. If both Sprinkler Leakage and Vandalism are excluded, refer to Rule 74.A.3.c.(1)(b) for the order in which the adjustments should be applied to the Basic Group I rate.

(2) With respect to Paragraphs c.(4) through c.(7), apply additive factors before applying multiplicative factors, except as otherwise specified in individual coverage rules.

2. Premium Calculation

Multiply the resulting rate by the limit of insurance in hundreds to determine the premium.

G. Sprinklered Risks


Sprinkler Leakage is a Covered Cause of Loss under the Basic, Broad and Special Causes of Loss Forms. Coverage is provided automatically unless the Sprinkler Leakage Exclusion Endorsement CP 10 56 is shown to apply to the described property.

2. Definition Of Automatic Sprinkler System

a. Any automatic fire protective or extinguishing system, including connected:

(1) Sprinklers and discharge nozzles;

(2) Ducts, pipes, valves, and fittings;

(3) Tanks, their component parts, and supports; and

(4) Pumps and private fire protection mains.

b. When supplied from an automatic fire protective system:

(1) Non-automatic fire protective systems; and

(2) Hydrants, standpipes, and outlets.

This definition includes cooking protection equipment.

3. Rates

a. The published Group I rate includes the charge for Sprinkler Leakage.

b. If building is rated as sprinklered (RCP Code 4XXX) and sprinkler leakage is not excluded, multiply the published Group I rate by .95 when values exposed to Automatic Sprinkler Systems equal less than 50% of all values of subject property at the described premises.

c. If rating Sprinkler Leakage - Earthquake Extension, see Rule 74.F.

H. Vandalism

Vandalism is a covered cause of loss under the Basic, Broad and Special Causes of Loss Forms. Coverage is provided automatically and the Group I class and specific rates include a charge for Vandalism unless the Vandalism Exclusion Endorsement CP 10 55 is shown to apply to the described property.

I. Building Code Enforcement

Refer to the Additional Rule titled Building Code Effectiveness Grading, in the state exceptions, for information which may affect Basic Group II rating.

71. CAUSES OF LOSS - BROAD FORM


This form provides the same coverage as the Basic Causes of Loss Form CP 10 10 and includes the following additional causes of loss:

1. Falling objects;

2. Weight of snow, ice or sleet; and

3. Water damage.

An Additional Coverage for Collapse is also included.

B. Form

Use Causes Of Loss - Broad Form CP 10 20.

C. Ineligibility

Do not use Form CP 10 20 to cover the following:

1. Farms or farming operations.

2. Grain elevators, grain tanks and grain warehouses.

3. Neon, automatic, or mechanical electric outdoor signs erected or in the course of construction.

4. Risks rated under the Rating Plan For Highly Protected Or Superior Risks.

D. Rules

1. Coinsurance

a. Property Damage Coverage Except Builders' Risk


b. Time Element Coverage



Do not apply Form CP 10 20 to blanket items covering eligible and ineligible property.

3. Limit Of Insurance And Coinsurance Percentage

The limit of insurance and coinsurance percentage for each separately rated cause of loss must be the same.

E. Rating Procedure

1. Basic Groups I And II

Refer to Rules 70.E. and 70.F. to develop rates and premiums for the Basic Group I and Group II causes of loss.

2. Property Damage Other Than Builders' Risk

Develop a Causes of Loss - Broad Form additional rate as follows:

a. Rates

Refer to Rule 15. for Construction Definitions. Select the appropriate rate as shown in the multistate rates.

b. Coinsurance


Multiply the 80% coinsurance building or personal property rate by the following factors to convert the 80% rate to 90% or 100% coinsurance.


Factor

100% .90 90% .95

Table 71.E.2.b.(1) Coinsurance Factors


Refer to Rules 34., 35. and 36. for coinsurance rating procedures for blanket and multiple location average rated coverages.

c. Exception

For eligible outdoor signs, use the rate for All Other Construction.

3. Builders' Risk

Use the rate shown in the multistate rates for all classes of construction. Make no rate modification for Coinsurance.

4. Time Element And Leasehold Interest Coverages

Develop a Causes of Loss - Broad Form additional rate as follows:

a. For building construction refer to Rule 15. for Construction Definitions.

b. Select the appropriate rate shown in the multistate rates.

(1) For eligible outdoor signs, use the rate for All Other Construction.

(2) Do not make any other modification for leasehold interest or time element forms.



Apply rate factors to annual rates in the following order, subject to Paragraph e.:

a. Coinsurance adjustment;

b. Factors or charges required by individual rules except as specified in Paragraphs c. and d.;

c. Municipal tax charges unless local requirements dictate otherwise; and

d. Term or annual premium payment plan factor.

e. Apply additive factors before applying multiplicative factors except as otherwise specified in individual coverage rules.


Multiply the resulting rate by the limit of insurance in hundreds to determine the additional premium.

72. CAUSES OF LOSS - SPECIAL FORM

Paragraph E.2.d.(3)(e) is replaced by the following:

E. Rating Procedure

2. Property Damage - Other Than Builders' Risk

d. Personal Property Coverage (Including Theft)

(3) Type 3 - All Other Personal Property

(e) Burglar Alarm System Modification Factors

If the premises are protected by a burglary alarm system acceptable to the insurer and such system is acknowledged in the policy application or Declarations, multiply the result of Paragraph (b) by the appropriate factor from Table 72.E.2.d.(3)(e), and attach Burglary and Robbery Protective Safeguards Endorsement CP 12 11.

Apply the burglar alarm system modification factor consecutively with the watchman service modification, if applicable.

Extent of Protection

Central Station With Keys

Central Station Without Keys

Local Alarm

High .65 .70 .85 Moderate .75 .80 .90 Low .80 .85 .95

Table 72.E.2.d.(3)(e) Burglar Alarm System Modification Factors

Types of burglar alarm system communication:

(i) Central Station with keys: Central station alarm company, located outside the insured premises, has keys to the insured premises.

(ii) Central Station without keys: Central station alarm company, located outside the insured premises, does not have keys to the insured premises.

(iii) Local Alarm: Local system with a loud sounding gong or siren located on the outside of the building containing the insured property.

Extent of Protection relates to the type of alarm system installations:

High: Protective wiring of all openings, ceilings, floors and walls enclosing the premises; or contact protection of all movable openings leading from the premises and a sound or vibration system on all other openings and on ceilings, floors and walls enclosing the premises.

Moderate: Protective wiring of all accessible openings, ceilings, floors and walls enclosing the premises, and contact protection of all inaccessible movable openings.

Low: Protective wiring of all accessible openings; or contact protection of all accessible doors leading from the premises and a system of intrusion detection in all sections of each enclosed area that has exterior openings.

72. CAUSES OF LOSS - SPECIAL FORM


1. The Causes of Loss - Special Form provides coverage for risks of direct physical loss unless excluded or limited to eligible property, subject to certain exclusions and conditions.

2. The Theft Exclusion may be used to exclude theft coverage on eligible building and personal property.

3. The Watercraft Exclusion modifies coverage provided under the Causes of Loss - Special Form to exclude watercraft damage to the following types of property:

a. Retaining walls that are not part of a building;

b. Bulkheads; or

c. Pilings, piers, wharves or docks.

B. Forms

1. Use Causes Of Loss - Special Form CP 10 30.

2. Use Theft Exclusion Endorsement CP 10 33 to exclude theft coverage.

3. Use Watercraft Exclusion Endorsement CP 10 35 when coverage is provided on waterfront property using Form CP 10 30.

C. Ineligibility

1. Buildings And Personal Property

Do not use Form CP 10 30 on buildings or personal property when coverage is provided for the following:

a. Farms or farming operations;

b. Grain elevators, grain tanks and grain warehouses;

c. Nuclear reactor plants and installations or risks that handle substantial quantities of radioactive materials;

d. Neon, automatic or mechanical electric outdoor signs that are erected or in the course of construction; and

e. Risks rated under the Rating Plan For Highly Protected Or Superior Risks.

2. Stock

Do not use Form CP 10 30 to cover stock in connection with the following risks unless they are incidental to the insured's principal business activities:

a. Dealers in livestock, live poultry or live animals;

b. Florist greenhouses, nurseries, plant or shrubbery dealers; and

c. Wholesale fresh fruit and vegetable dealers.

Refer to Paragraph D.5. to cover personal property other than stock for these risks.

3. Legal Liability

Do not use Form CP 10 30 with Legal Liability Coverage Form CP 00 40 when coverage is provided for the following:

a. Warehouse risks (Personal Property only).

b. Personal Property of Others in the care, custody or control of the insured.

4. Other Ineligible Property

Do not use Form CP 10 30 to cover the property listed. Use appropriate Inland Marine forms to provide coverage for:

a. Art glass;

b. Half tone screens;

c. Memorial windows;

d. Mosaic art;

e. Rotogravure screens;

f. Stained glass; and

g. Stained glass in leaded sections.

Additional Property Not Covered Endorsement CP 14 20 may be used to designate such property as Property Not Covered. Refer to Rule 31.C.5.c.

D. Rules

1. Coinsurance

a. Property Damage Other Than Builders' Risk


b. Time Element Coverage



Do not apply Form CP 10 30 to blanket items covering eligible and ineligible property.

3. Offices

Values of property in offices may be written as a separate item under the Causes of Loss - Special Form and all remaining property may be written under the Causes of Loss - Basic or Broad Forms. Offices at one location may be written as a separate item from all other personal property, using the office rates.

4. Limit And Coinsurance

The limit of insurance and coinsurance percentage for each separately rated cause of loss must be the same.

5. Personal Property Other Than Stock

For risks described in Paragraphs C.2.a., C.2.b. and C.2.c.

Special Form coverage for business personal property other than stock may be provided by either one of the following methods:

a. Exclude stock as Property Not Covered, using Additional Property Not Covered Endorsement CP 14 20. Refer to Rule 31.C.5. for information on the use of Endorsement CP 14 20. Describe the stock in the Schedule of Endorsement CP 14 20. Personal property other than stock may be covered for the special causes of loss, using the Declarations.

b. Cover stock for either the basic or broad causes of loss and cover personal property other than stock for the special causes of loss. Use Your Business Personal Property - Separation of Coverage Endorsement CP 19 10 to write the stock and personal property other than stock as separate items. Refer to Rule 31.C.1. for information on the use of Endorsement CP 19 10.

E. Rating Procedure

1. Rates And Premiums

Refer to Rules 70.E. and 70.F. to develop rates and premiums for the Basic Group I and Group II causes of loss.

2. Property Damage - Other Than Builders' Risk

Develop a Cause of Loss - Special Form additional premium as follows:

a. Coinsurance




Factor

100% .90


Factor

90% .95

Table 72.E.2.a.(1) Coinsurance Factors


Refer to Rules 34., 35. and 36. for blanket and multiple location average rated coverages.

b. Building Coverage

(1) Select the appropriate rate as shown in the state rates.

(2) For eligible outdoor signs, use the rates for All Other Construction.

c. Personal Property Coverage (Excluding Theft)

Use the 80% coinsurance rate shown in the state rates regardless of occupancy.

d. Personal Property Coverage (Including Theft)

(1) Type 1 - Apartments And Condominiums - Residential Use Only

This category applies to property of the lessor or condominium association, or property owned indivisibly by all unit-owners.

Use the 80% coinsurance rate shown in the state rates.

If the condominium property is occupied by an office or for a commercial purpose, use the rating procedure applicable to Type 2 or Type 3 property as described in Paragraphs (2) and (3).

(2) Type 2 - Offices

Add to the premium developed under Paragraph c., an increment shown in the state rates for each location. If there is contributing insurance, use the company's pro rata proportion of the total amount of contributing insurance to determine its share of the increment.

(3) Type 3 - All Other Personal Property

To the premium developed under Paragraph c., add an increment, as determined in Paragraphs (a) through (e), for each location. The limits of insurance per location for Your Business Personal Property and Personal Property of Others must be combined to determine the applicable increment for each location.

(a) Step 1

Obtain the Rate Group and Class Limit for contents of each location from the Classification Table.

(i) Use the Rate Group and Class Limit reflecting major values of the property at each location for risks having multiple classifications.

(ii) Use the same Rate Group and Class Limit to rate tenant's improvements and betterments when written in the same item as other personal property.

(b) Step 2

Determine the applicable relativity for the appropriate limit of insurance from the following tables.

If there is contributing insurance, use the company's pro rata proportion of the total amount of contributing insurance to determine its share of the relativity.

Use the risk assignments provided in Paragraph (c) to select a base loss cost from the state rates.

Multiply the base rate (as developed by the company from the base loss cost) by the applicable relativity. The result is the theft increment.

All Other Personal Property - Relativities

RATE GROUP 1 RELATIVITIES CLASS LIMIT 5,000 15,000 25,000 50,000 AMOUNT OF INSURANCE Up to - 5,000 405 525 565 626 5,001 - 10,000 646 837 901 997 10,001 - 15,000 744 965 1038 1150 15,001 - 20,000 782 1014 1092 1209 20,001 - 25,000 806 1045 1125 1244 25,001 - 30,000 828 1074 1156 1280 30,001 - 35,000 844 1094 1178 1304 35,001 - 40,000 859 1114 1199 1328 40,001 - 45,000 875 1134 1221 1351 45,001 - 50,000 890 1154 1242 1375 50,001 - 55,000 1170 1259 1393 55,001 - 60,000 1185 1276 1412 60,001 - 65,000 1201 1292 1430

RATE GROUP 1 RELATIVITIES CLASS LIMIT 5,000 15,000 25,000 50,000 AMOUNT OF INSURANCE 65,001 - 70,000 1216 1309 1449 70,001 - 75,000 1232 1326 1467 75,001 - 80,000 1248 1343 1485 80,001 - 85,000 1263 1360 1504 85,001 - 90,000 1279 1376 1522 90,001 - 95,000 1294 1393 1541 95,001 - 100,000 1310 1410 1559 100,001 - 110,000 1333 1434 1586 110,001 - 120,000 1356 1459 1613 120,001 - 130,000 1378 1483 1640 130,001 - 140,000 1401 1508 1668 140,001 - 150,000 1424 1532 1695 150,001 - 160,000 1557 1722 160,001 - 170,000 1581 1749 170,001 - 180,000 1606 1776 180,001 - 190,000 1630 1803 190,001 - 200,000 1655 1831 200,001 - 210,000 1679 1858 210,001 - 220,000 1703 1885 220,001 - 230,000 1728 1912 230,001 - 240,000 1752 1939 240,001 - 250,000 1777 1966 250,001 - 300,000 2102 300,001 - 350,000 2217 350,001 - 400,000 2333 400,001 - 450,000 2448 450,001 - 500,000 2563 Over

500,000

Use this relativity for all amounts of insurance greater than 10 times the class limit.

Table 72.E.2.d.(3)(b)#1 All Other Personal Property - Relativities


RATE GROUP 2 RELATIVITIES CLASS LIMIT 5,000 15,000 25,000 50,000 AMOUNT OF INSURANCE Up to - 5,000 610 770 836 954 5,001 - 10,000 989 1248 1357 1548 10,001 - 15,000 1153 1455 1581 1805 15,001 - 20,000 1212 1529 1663 1897 20,001 - 25,000 1240 1564 1700 1940 25,001 - 30,000 1266 1599 1737 1982 30,001 - 35,000 1281 1618 1758 2005 35,001 - 40,000 1296 1636 1778 2029 40,001 - 45,000 1311 1655 1799 2052 45,001 - 50,000 1326 1673 1819 2075 50,001 - 55,000 1688 1835 2093 55,001 - 60,000 1702 1851 2112 60,001 - 65,000 1717 1867 2130 65,001 - 70,000 1732 1883 2148 70,001 - 75,000 1747 1899 2167 75,001 - 80,000 1761 1915 2185 80,001 - 85,000 1776 1931 2203 85,001 - 90,000 1791 1947 2221 90,001 - 95,000 1805 1963 2240 95,001 - 100,000 1820 1979 2258 100,001 - 110,000 1843 2003 2286 110,001 - 120,000 1865 2028 2314 120,001 - 130,000 1888 2052 2341 130,001 - 140,000 1910 2077 2369 140,001 - 150,000 1933 2101 2397 150,001 - 160,000 2125 2425 160,001 - 170,000 2150 2453 170,001 - 180,000 2174 2480 180,001 - 190,000 2199 2508 190,001 - 200,000 2223 2536 200,001 - 210,000 2247 2564 210,001 - 220,000 2272 2592 220,001 - 230,000 2296 2619 230,001 - 240,000 2321 2647 240,001 - 250,000 2345 2675

RATE GROUP 2 RELATIVITIES CLASS LIMIT 5,000 15,000 25,000 50,000 AMOUNT OF INSURANCE 250,001 - 300,000 2814 300,001 - 350,000 2936 350,001 - 400,000 3058 400,001 - 450,000 3179 450,001 - 500,000 3301 Over

500,000




RATE GROUP 3 RELATIVITIES CLASS LIMIT 5,000 15,000 25,000 50,000 AMOUNT OF INSURANCE Up to - 5,000 875 1073 1164 1349 5,001 - 10,000 1441 1768 1919 2221 10,001 - 15,000 1691 2075 2251 2606 15,001 - 20,000 1785 2189 2376 2751 20,001 - 25,000 1818 2231 2420 2801 25,001 - 30,000 1852 2272 2464 2851 30,001 - 35,000 1867 2290 2484 2875 35,001 - 40,000 1882 2309 2504 2898 40,001 - 45,000 1897 2327 2523 2922 45,001 - 50,000 1912 2345 2543 2945 50,001 - 55,000 2360 2560 2964 55,001 - 60,000 2375 2576 2983 60,001 - 65,000 2390 2593 3002 65,001 - 70,000 2405 2609 3021 70,001 - 75,000 2421 2626 3041 75,001 - 80,000 2436 2642 3060 80,001 - 85,000 2451 2659 3079 85,001 - 90,000 2466 2675 3098

RATE GROUP 3 RELATIVITIES CLASS LIMIT 5,000 15,000 25,000 50,000 AMOUNT OF INSURANCE 90,001 - 95,000 2481 2692 3117 95,001 - 100,000 2496 2708 3136 100,001 - 110,000 2520 2734 3166 110,001 - 120,000 2545 2761 3197 120,001 - 130,000 2569 2787 3227 130,001 - 140,000 2593 2814 3257 140,001 - 150,000 2618 2840 3288 150,001 - 160,000 2866 3318 160,001 - 170,000 2893 3348 170,001 - 180,000 2919 3379 180,001 - 190,000 2946 3409 190,001 - 200,000 2972 3440 200,001 - 210,000 2998 3470 210,001 - 220,000 3025 3500 220,001 - 230,000 3051 3531 230,001 - 240,000 3078 3561 240,001 - 250,000 3104 3591 250,001 - 300,000 3743 300,001 - 350,000 3881 350,001 - 400,000 4019 400,001 - 450,000 4156 450,001 - 500,000 4294 Over

500,000




RATE GROUP 4 RELATIVITIES CLASS LIMIT 5,000 15,000 25,000 50,000 AMOUNT OF INSURANCE Up to - 5,000 1280 1398 1445 1618

RATE GROUP 4 RELATIVITIES CLASS LIMIT 5,000 15,000 25,000 50,000 AMOUNT OF INSURANCE 5,001 - 10,000 2284 2497 2577 2885 10,001 - 15,000 2787 3045 3145 3521 15,001 - 20,000 3026 3307 3415 3823 20,001 - 25,000 3145 3438 3550 3975 25,001 - 30,000 3264 3569 3685 4126 30,001 - 35,000 3304 3612 3730 4176 35,001 - 40,000 3344 3656 3776 4226 40,001 - 45,000 3384 3699 3821 4275 45,001 - 50,000 3424 3742 3866 4325 50,001 - 55,000 3771 3896 4359 55,001 - 60,000 3801 3926 4392 60,001 - 65,000 3830 3955 4426 65,001 - 70,000 3859 3985 4460 70,001 - 75,000 3889 4015 4494 75,001 - 80,000 3918 4045 4527 80,001 - 85,000 3947 4075 4561 85,001 - 90,000 3976 4104 4595 90,001 - 95,000 4006 4134 4628 95,001 - 100,000 4035 4164 4662 100,001 - 110,000 4077 4208 4711 110,001 - 120,000 4119 4251 4759 120,001 - 130,000 4161 4295 4808 130,001 - 140,000 4203 4338 4857 140,001 - 150,000 4245 4382 4905 150,001 - 160,000 4425 4954 160,001 - 170,000 4469 5003 170,001 - 180,000 4512 5051 180,001 - 190,000 4556 5100 190,001 - 200,000 4599 5149 200,001 - 210,000 4643 5197 210,001 - 220,000 4686 5246 220,001 - 230,000 4730 5294 230,001 - 240,000 4773 5343 240,001 - 250,000 4817 5392 250,001 - 300,000 5635 300,001 - 350,000 5847

RATE GROUP 4 RELATIVITIES CLASS LIMIT 5,000 15,000 25,000 50,000 AMOUNT OF INSURANCE 350,001 - 400,000 6059 400,001 - 450,000 6271 450,001 - 500,000 6483 Over

500,000



(c) Risk Assignments

(i) Motel-Hotel Risks

Hotels, motels, motor inns, motor lodges, tourist courts and similar risks whose business is principally the providing of lodging accommodations for transients, including premises and operations necessary or incidental to such lodging accommodations.

(ii) Mercantile Risks

An establishment in which the principal business is the retail or wholesale buying and selling of goods, wares and merchandise. Included are bars, grills, and restaurants.

(iii) Institutional Risks

An establishment principally occupied by an educational, religious, sanitory, charitable or governmental organization. It does not include buildings containing manufacturing of any kind, or sale, storage, processing, or repair of clothing or furniture, or paper or rag storage, or sorting or supplying of food or lodging to itinerants.

(iv) Service Risks

An establishment in which the principal operation is the providing of a personal or commercial service. Included are establishments providing entertainment or recreation; warehousing of property of others; and automobile risks, such as service, repair or garaging of automobiles and parking lots.

(v) Industrial And Processing Risks

An establishment in which the principal activity is the manufacturing of goods and wares or processing of raw materials or finished goods.

(vi) Contractors Risks

An establishment in which the principal operation is that of installation, construction, demolition or maintenance. This includes any owner-contractor, general contractor or sub-contractor, whether or not he or she actually performs any part of such work or has employees on the site.

(d) Watchman Service Modification Factors

Multiply the result of Paragraph (b) by the watchman service modification factor in Table 72.E.2.d.(3)(d) Watchman Service Modification Factors, if such service is acknowledged in the policy application or Declarations, and attach Burglary and Robbery Protective Safeguards Endorsement CP 12 11. Apply the highest factor, if any, when different parts of a location have separate services.

Apply the burglary alarm system modification factor (see following Paragraph (e)) if applicable, consecutively with the watchman service modification factor.

Watchman Service Modification Factors

Type Of Watchman Service

Factor

Service applying within the premises of the insured at all times when the premises are not regularly open for business and which will require at least hourly rounds and signal at least hourly to a central station location outside the insured's plant or to a police station provided there is at least one policeman on duty at the station at all times.

.75

Service which does not signal to an outside station but registers at least hourly on a watchman's clock in the insured's premises.

.85

Service which does not signal to an outside station or register on a watchman's clock.

.95

Table 72.E.2.d.(3)(d) Watchman Service Modification Factors

(e) Burglar Alarm System Modification Factors

If the premises are protected by a burglary alarm system acceptable to the insurer and such system is acknowledged in the policy application or Declarations, multiply the result of Paragraph (b) by a factor selected in accordance with Paragraph (i), (ii) or (iii), and attach Burglary and Robbery Protective Safeguards Endorsement CP 12 11.

Apply the burglar alarm system modification factor consecutively with the watchman service modification, if applicable.

(i) Central Station with keys (central station alarm company, located outside the insured premises, has keys to the insured premises)

Apply a rate modification factor not more than .85 (15% credit) and not less than .50 (50% credit). In selecting a factor within this range, consider the type of alarm system installation in terms of the extent of protection it provides, and the anticipated emergency response time of security or police personnel.

(ii) Central Station without keys (central station alarm company, located outside the insured premises, does not have keys to the insured premises)

Apply a rate modification factor not more than .85 (15% credit) and not less than .60 (40% credit). In selecting a factor within this range, consider the type of alarm system installation in terms of the extent of protection it provides, and the anticipated emergency response time of security or police personnel.

(iii) Local Alarm (local system with a loud sounding gong or siren located on the outside of the building containing the insured property)

Apply a rate modification factor not more than .95 (5% credit) and not less than .80 (20% credit). In selecting a factor within this range, consider the type of alarm system installation in terms of the extent of protection it provides, the location of the property (populated or remote area) and the construction of the alarm housing and control cabinet in terms of ability to resist attempts to stop the alarm.

Examples of various types of alarm system installations, beginning with relatively greatest extent of protection:

Protective wiring of all openings, ceilings, floors and walls enclosing the premises; or contact protection of all movable openings leading from the premises and a sound or vibration system on all other openings and on ceilings, floors and walls enclosing the premises.

Protective wiring of all accessible openings, ceilings, floors and walls enclosing the premises, and contact protection of all inaccessible movable openings.

Protective wiring of all accessible openings; or contact protection of all accessible doors leading from the premises and a system of intrusion detection in all sections of each enclosed area that has exterior openings.

3. Builders' Risk Coverage - Property Damage And Time Element Coverages

Use the rates shown in the multistate rates. Make no rate modification for Coinsurance.

4. Leasehold Interest And Time Element Coverages

a. Theft Exclusion Endorsement CP 10 33 Applicable



(3) For eligible outdoor signs, use the rate for All Other Construction.

b. Theft Exclusion Endorsement CP 10 33 Not Applicable




1. Applicable except when property damage "including theft" coverage is written under Paragraph E.2.d.(2) for Type 2 property and Paragraph E.2.d.(3) for Type 3 property.

a. Apply rate factors to the annual rates in the following order:

(1) Coinsurance adjustment;

(2) Factors or charges required by individual rules except as specified in Paragraphs (3) and (4);



b. Multiply the resultant rate by the limit of insurance in hundreds to determine the additional premium.

2. Applicable when property damage "including theft" coverage is written for Type 2 and Type 3 property.

a. Apply rate factors to the annual rate under Paragraph E.2.c. in the following order:


(2) Factors or charges required by individual rules except as specified in Paragraph e.

b. Multiply the resultant rate by the limit of insurance in hundreds.

c. Apply factors or charges required by individual rules (except as provided in Paragraph e.) to the Theft increments for Type 2 and Type 3 property, or to the Theft rates if the rate derivation procedure was applied. (Refer to Paragraph G. for the rate derivation procedure.)

Do not apply a coinsurance adjustment factor to the Theft increment or rate, except as noted in Paragraph G. for blanket average rated policies.

Rating Examples

Refer to the Rating Examples Appendix.

d. Add the result of Paragraph c. to the result of Paragraph b.

e. Apply premium factors to the annual premium in the following order:



G. Rate Derivation Procedure

For the purpose of certain rules (for example, Value Reporting Form, Blanket Insurance), and whenever rate modification is indicated, the Theft increment for Type 2 and Type 3 property must be converted to a Theft rate. Develop the Theft rate as follows:

1. Select the Theft increment for Type 2 or Type 3 property based on the total of all contributing insurance at the location. (The increment is selected in this manner for all policies, that is, whether insurance is specific or blanket average rated.)

2. Divide the increment by the total of all contributing insurance in hundreds at the location. The result is the 80%, 90% or 100% coinsurance Theft rate and therefore do not apply a coinsurance adjustment factor. Exception - see Paragraph 3.

3. For blanket average rated policies only, multiply the result of Paragraph 2. by 1.05 for 90% coinsurance policies, or by 1.10 for 100% coinsurance policies. The result is the 80% coinsurance Theft rate. Refer to Rule 34.B.5.a.(2) for blanket average rate calculation instructions.

73. CAUSES OF LOSS - EARTHQUAKE FORM

Paragraph D.2.d. is replaced by the following:

D. Rating Procedure

2. Deductibles

d. Earthquake Deductible Options

Deductibles for building and contents may be increased to a maximum of 40%, subject to application of credits. Multiply the rates at the base deductible by the appropriate factor as shown in Table 73.D.2.d. Earthquake Deductible Options. Refer to the state rates for applicable Deductible Tier.

Deductible Percentage Deductible Tier Building Classes 10% 15% 20% 25% 30% 35% 40% 1 1C, 1D, 3B 0.90 0.80 0.70 0.60 0.50 0.45 0.40 1 3A, 4B, 5A 0.85 0.75 0.65 0.55 0.50 0.40 0.35 1 2A, 2B, 4A 0.85 0.70 0.60 0.50 0.40 0.35 0.30 1 3C, 4C, 4D, - 0.90 0.80 0.70 0.60 0.50 0.45 5B, 5C 1 5AA - 0.90 0.75 0.65 0.55 0.45 0.40 2 1C, 1D, 3B 0.80 0.60 0.50 0.40 0.30 0.25 0.20 2 3A, 4B, 5A 0.70 0.50 0.35 0.25 0.20 0.15 0.10 2 2A, 2B, 4A 0.60 0.40 0.30 0.20 0.15 0.10 0.05 2 3C, 4C, 4D, - 0.80 0.65 0.50 0.40 0.30 0.25 5B, 5C 2 5AA - 0.70 0.50 0.40 0.25 0.20 0.15 3 1C, 1D, 3B 0.70 0.50 0.40 0.30 0.20 0.15 0.10 3 3A, 4B, 5A 0.60 0.35 0.20 0.15 0.10 0.05 0.05 3 2A, 2B, 4A 0.50 0.30 0.15 0.10 0.05 0.05 0.05 3 3C, 4C, 4D, - 0.75 0.55 0.40 0.30 0.20 0.15 5B, 5C 3 5AA - 0.60 0.40 0.25 0.15 0.10 0.05

Table 73.D.2.d. Earthquake Deductible Options

Paragraph D.3. is replaced by the following:

3. Territory

Refer to Table 73.D.3. Earthquake Territories, to determine the territory applicable to the location of the property being insured.

Earthquake Territories

ZIP Code Territory Entire State 11

Table 73.D.3. Earthquake Territories

The following is added to Paragraph D.:

7. Sprinklered Risk

The building and contents loss costs shown in the state rates apply to a non-sprinklered risk. For a sprinklered risk (meaning, a building with an operable sprinkler system in any part of the building), multiply the Earthquake building and contents rates by a factor of 1.06.

8. Building Height

The building and contents loss costs shown in the state rates apply to low-rise buildings, meaning buildings of 1-3 stories. For medium-rise and high-rise buildings, multiply the Earthquake building and contents rates by a factor from Table 73.D.8., Building Height Modification Factors. The appropriate factor is determined based on building classification and deductible tier. The deductible tier is specified for each territory in the state rates.

Building Height Modification Factors

Building 4-7 Stories 8 Or More Stories Class Tier

1 Tier 2

Tier 3

Tier 1

Tier 2

Tier 3

1C 1.000 1.000 1.000 1.000 1.000 1.000 1D 1.000 1.000 1.000 1.000 1.000 1.000 2A 1.000 1.000 1.000 1.000 1.000 1.000 2B 1.000 1.000 1.000 1.000 1.000 1.000 3A 1.000 1.000 1.000 1.000 1.000 1.000

Building 4-7 Stories 8 Or More Stories Class Tier

1 Tier 2

Tier 3

Tier 1

Tier 2

Tier 3

3B 1.000 1.000 1.000 1.000 1.000 1.000 3C 1.000 1.000 1.000 1.000 1.000 1.000 4A 1.000 1.000 1.000 1.000 1.000 1.000 4B 1.000 1.000 1.000 1.000 1.000 1.000 4C 1.000 1.000 1.000 1.000 1.000 1.000 4D 1.000 1.000 1.000 1.000 1.000 1.000 5A 1.000 1.000 1.000 1.000 1.000 1.000 5AA 1.000 1.000 1.000 1.000 1.000 1.000 5B 1.000 1.000 1.000 1.000 1.000 1.000 5C 1.000 1.000 1.000 1.000 1.000 1.000

Table 73.D.8. Building Height Modification Factors

Paragraph E.1.b. is replaced by the following:

E. Premium Determination


b. Time Element

Calculate the Earthquake rate for time element coverage using the base rate and time element factors as specified in Rules 50. and 52.

73. CAUSES OF LOSS - EARTHQUAKE FORM


This insurance provides coverage for loss by earthquake and volcanic eruption, explosion or effusion.

B. Forms

1. Use Earthquake And Volcanic Eruption Endorsement CP 10 40.

Endorsement CP 10 40 includes an option for limiting coverage to "Earthquake - Sprinkler Leakage Only". The option is made applicable by appropriate entry in the Declarations. Refer to Rule 74.F. in the multistate and state sections of this manual for more information on this option.

(For information on writing Earthquake And Volcanic Eruption Coverage on a sub-limit basis, subject to an annual aggregate limit, refer to Rule 75.)

2. Use Earthquake Inception Extension Endorsement CP 10 41 when simplified forms replace non-simplified forms and non-simplified forms include Earthquake Coverage.

C. Rules

1. Specific Insurance

a. The limit of insurance for Earthquake must be the same as the limit of insurance for other causes of loss.

b. For policies containing more than one item, Earthquake Coverage may apply to any or all items. Clearly identify on the Declarations the items to which Earthquake Coverage applies.


When Earthquake Coverage does not apply to all buildings or personal property included in a blanket item:

a. Designate on the Declarations the specific building(s) or personal property to which the coverage applies.

b. Show the Earthquake Coverage limit of insurance for the designated building(s) or personal property item(s).

D. Rating Procedure

1. Risk Classification

a. Class Rated Risks

Refer to Paragraph D.4. to obtain building classification description.

b. Specific Rated Risks

For any class, a request for specific rating and publication must be submitted to ISO with a complete set of certified construction drawings, specifications, and available soil reports from the design professional and contractor indicating the design standards and the Building Construction Inspection program to be utilized.

2. Deductibles

a. General Information

All rates for property damage coverage are based on a mandatory deductible percentage. The mandatory deductible percentages are shown in the State Rates. Refer to Paragraph d. for information on higher deductibles.


The dollar amount of the deductible will be equal to a percentage of the Limit(s) of Insurance applicable to the property that has sustained loss or damage.

(2) Blanket Insurance

The dollar amount of the deductible will be equal to a percentage of the value(s) of the property that has sustained loss or damage. The values to be used are those shown in the most recent Statement of Values on file with the company.

(3) Value Reporting Forms And Builders Risk Insurance

For value reporting forms, the calculation of the deductible amount is based on reported values. There are variations for the situation where loss occurs prior to the first report, and for reports of value which show less than full values. If coverage is written blanket under a reporting form, the basis of the calculation is value at time of loss.

For builders risk insurance, the calculation of the deductible amount is based on value at time of loss.

(4) Newly Acquired Or Constructed Property

When property is covered under the Coverage Extension for Newly Acquired or Constructed Property: In determining the amount, if any, that we will pay for loss or damage, we will deduct an amount equal to a percentage of the value(s) of the property at time of loss. The applicable percentage for Newly Acquired or Constructed Property is the highest percentage shown in the Declarations for any described premises.

b. Application

The deductible is calculated separately for, and applies separately to:

(1) Each building, if two or more buildings sustain loss or damage;

(2) The building and to personal property in that building, if both sustain loss or damage;

(3) Personal property at each building, if personal property at two or more buildings sustains loss or damage;

(4) Personal property in the open.

c. Statement Of Values

The Statement of Values for a blanket policy should contain sufficient detail - value of each building, value of personal property at each building, value of personal property in the open - to complement the procedure set forth in Form CP 10 40.

d. Earthquake Deductible Options

Deductibles for building and contents may be increased to a maximum of 40%, subject to application of credits. Multiply the rates at the base deductible by the appropriate factor as shown in Table 73.D.2.d. Earthquake Deductible Options in the state exceptions. Refer to the State Rates for applicable Deductible Tier.

3. Territory

Refer to the territory section for ZIP code-based territory definitions to determine the territory applicable to the location of the property being insured.

4. Building Classification

In cases of mixed construction where two or more types of construction each represent 10% or more of the total area of the building, apply the class which produces the highest rate.

Building classifications are as follows (any building which fully qualifies under more than one definition should be placed in the lower numbered classification):

a. Completed Buildings

(1) Wood Frame Buildings

Excluded are structures which are classified for fire as wood frame but have concrete supported floors and/or some walls of unit masonry or concrete.

Class 1C

Habitational

Wood frame and frame stucco habitational buildings which do not exceed 2 stories in height, regardless of area.

Non-Habitational

Wood frame and frame stucco buildings which are 3 stories or less in height and 3,000 square feet or less in ground floor area.

Class 1D

Wood frame and frame stucco buildings not qualifying under Class 1C.

(2) All-Metal Buildings

Class 2A

All-metal buildings which are one story in height and 20,000 square feet or less in ground floor area. Wood or cement-asbestos are acceptable alternatives to metal roofing and/or siding.

Class 2B

Buildings which would qualify as Class 2A except for exceeding area or height limitations.

(3) Steel Frame Buildings

Class 3A

Buildings with a complete steel frame carrying all loads. Floors and roofs must be of poured-in-place reinforced concrete or of concrete fill on metal decking welded to the steel frame (open web steel joists excluded). Exterior walls must be non-load bearing and of poured-in-place reinforced concrete or of reinforced unit masonry. Buildings having column-free areas greater than 2,500 sq. ft. (such as auditoriums, theaters, public halls, etc.) do not qualify.

Class 3B

Buildings with a complete steel frame carrying all loads. Floors and roofs must be of poured-in-place reinforced concrete or metal, or any combination thereof, except that roofs on buildings over three stories may be of any material. Exterior and interior walls may be of any non-load bearing material.

Class 3C

Buildings having a complete steel frame with floors and roofs of any material (such as wood joist on steel beams) and with walls of any non-load bearing materials.

(4) Reinforced Concrete Buildings, Combined Reinforced Concrete And Structural Steel Buildings

Class 4A and 4B buildings must have all vertical loads carried by a structural system consisting of one or a combination of the following:

(a) Poured-in-place reinforced concrete frame;

(b) Poured-in-place reinforced concrete bearing walls;

(c) Partial structural steel frame with (a) and/or (b).

Floors and roofs must be of poured-in-place reinforced concrete, except that materials other than reinforced concrete may be used for the roofs of buildings over 3 stories.

Class 4A

Buildings with a structural system as defined above with poured-in-place reinforced concrete exterior walls or reinforced unit masonry exterior walls. Not qualifying are buildings having column-free areas greater than 2,500 sq. ft. (such as auditoriums, theaters, public halls, etc.).

Class 4B

Buildings having a structural system as defined above with exterior and interior non-bearing walls of any material.

Class 4C

Buildings having:

(a) Partial or complete load carrying system of precast concrete; and/or

(b) Reinforced concrete lift-slab floors and/or roofs; and

(c) Otherwise qualifying for Class 4A and 4B.

Class 4D

Buildings having a reinforced concrete frame, or combined reinforced concrete and structural steel frame. Floors and roofs may be of any material (such as wood joist on reinforced concrete beams) while walls may be of any non-load bearing materials.

(5) Concrete Brick Or Block Buildings

Class 5A

One-story buildings having load bearing exterior walls of:

(a) Poured-in-place reinforced concrete; and/or

(b) Precast reinforced concrete; and/or

(c) Reinforced brick masonry; and/or

(d) Reinforced hollow concrete block masonry.

Roofs and supported floors of wood or metal assemblies.

Class 5AA

Buildings of any height, with floors and/or roofs which may be of any material otherwise qualifying for Class 5A.

Class 5B

Buildings having load bearing walls of unreinforced brick or other unreinforced solid unit masonry, excluding adobe. Floors and roofs may be of any material.

Class 5C

Buildings having load bearing walls of hollow tile or other hollow unit masonry construction, adobe, and cavity wall construction. Also included are buildings not covered by any other class.

b. Buildings In Course Of Construction

All buildings and special structures during course of construction must be placed in accordance with the appropriate completed building or structure Class and the rates multiplied by .495, except Class 3A, 4A, 5A & 6, are not applicable.

c. Class 7 - Special Structures

Table 73.D.4.c. Class 7 Special Structures provides a list of special structures not qualifying as buildings. If a particular special structure is not listed in Table 73.D.4.c. Class 7 Special Structures under Items 1. through 11., refer to Item 12. Special structures will receive the rate for the equivalent Building Classification.

Class 7 Special Structures

Equivalent Building Class

Mandatory Deductible Structure

5C 10 % 1. Bridges 5C 10 2. Dams 3B 5 3. Greenhouses with glass walls and roofs 1D 5 4. Open air swimming pools in excavations in the ground 5. Radio and TV towers (steel) 3B 5 a. Not located on buildings 3C 10 b. Over 75 feet in height located on buildings c. Not over 75 feet in height located on buildings Bldg Ded & Rate Grade Applies 6. Reservoirs - See "Dams" 3A 5 7. Sewage Treatment Plants 8. Silos - See "Tanks at Ground Level"

Equivalent Building Class

Mandatory Deductible Structure

9. Stacks 3B 5 a. Steel 3C 10 b. Reinforced concrete 5C 10 c. Brick 10. Tanks a. Tanks at ground level (1) Steel and reinforced concrete tanks 1D 5 (a) Height to diameter ratio less than 1 3B 5 (b) Height to diameter ratio less than 1 to 2.5 5B 10 (c) Height to diameter ratio over 2.5 (2) Wood tanks 3B 5 (a) Height to diameter ratio less than 1 5B 10 (b) Height to diameter ratio 1 and over b. Tanks on elevated towers 5B 10 (1) Steel tank and tower 5B 10 (2) Reinforced concrete tank and tower 5C 10 (3) Wood tank and tower 5C 10 (4) Mixed construction 1D 5 11. Transmission lines, tramway tower 5C 10 12. Any structure not included above

Table 73.D.4.c. Class 7 Special Structures

d. Masonry Veneer Limitation

The Masonry Veneer Limitation of Form CP 10 40 (which excludes loss to exterior masonry veneer but includes stucco on wood frame walls) may be deleted by entering the words "Including Masonry Veneer" in the Premises Description of the Declarations Page. Multiply the Class 1C or 1D building rate by the appropriate factor from Table 73.D.4.d. Masonry Veneer Coverage Factors.

Percentage Of Total Exterior Wall Areas Faced With Masonry Veneer

Factor

10% - 25% 1.75 25% - 50% 2.5 Over - 50% 4.0

Table 73.D.4.d. Masonry Veneer Coverage Factors

Where less than 10% of the total outside wall area is faced with masonry veneer, the Masonry Veneer Limitation (excluding stucco) is not applicable, nor does it apply to indirect loss coverage.

5. Personal Property Rate Grade

Obtain the Personal Property Rate Grade from Table 73.F. Personal Property Index - Earthquake Insurance.

6. Coinsurance

a. Specific Insurance



Factor

90% .95 100% .90

Table 73.D.6.a. Coinsurance Modification Factors - Earthquake

b. Blanket And Multiple Location Average Rated Coverages

Refer to Rules 34., 35. and 36. for coinsurance rating procedures.

E. Premium Determination


a. Property Damage Coverages


Select the appropriate building or personal property rate from the state rates based on the following applicable items:

(a) Deductible;

(b) Territory;

(c) Building classification;

(d) Personal property rate grade;

(e) Rating penalties (if applicable).


Refer to ISO.

(3) Hazards

Multiply the building and contents rates by a factor of 1.25 if a roof tank is on the building.

b. Time Element

Calculate the Earthquake rate for time element coverage using the base rate and time element factors as specified in Rules 50. and 52., except for buildings 9 stories or over, multiply the Earthquake time element rate by the appropriate factor in Table 73.E.1.b. Story Modification Factors.

Number Of Stories

Rate Factor

1 - 8 1.0 9 - 20 1.5 Over 20 2.0

Table 73.E.1.b. Story Modification Factors

Disregard the number of partial stories less than 15% of the ground floor area of the building. Also disregard basements. Where a story is more than 15 feet in height, consider each 15 feet (or greater fraction thereof) as equivalent to one story. In buildings with stories partially below grade level, such stories must be included in the story count for height where the story is accessible at grade level.

c. Leasehold Interest Coverage

Use the 80% coinsurance Earthquake building rate.

d. Rate Factors

Apply rate factors to the annual rates in the following order:


(2) Factors or charges required by individual rules except as specified in Paragraph (3) or Paragraph (4);



Apply additive factors before applying multiplicative factors except as otherwise specified in individual coverage rules.


Multiply the resulting rate by the limit of insurance in hundreds to determine the premium.

F. Personal Property Index - Earthquake Insurance

Personal Property Rate Grade

Occupancy And/Or Personal Property

2 Aircraft and parts, excl. instruments Animal hospitals - see "Pet

hospitals" 1 Antique stores Apartment houses - see "Household

contents" Appliance sales, service and

storage: 3 Excluding radio & TV stocks 2 Including radio & TV stocks 1 Aquariums 1 Art galleries 1 Art stores Automotive risks: 3 Assembly plants 3 Garages (public, tenant or

mercantile)



3 Gasoline and super service stations 4 Laundry (washing & polishing

shops) 3 Repair shops Sales and storage: 3 Accessories and parts 3 Automobiles, motorcycles, Auto

trailers 4 Tire mfg., rebuilding, retreading

and vulcanizing shops 4 Tires Bakeries: 2 Retail 3 Wholesale 3 Banks 3 Barber shops Barrels - see "Boxes" 1 Bars, cocktail lounges, night clubs

and saloons 3 Furniture and fixtures Stock - see "Liquids" 3 Beauty shops Beverage and liquor stocks - see

"Liquids" 3 Bicycle and Motorcycle shops 3 Blueprint shops 3 Boats 2 Boilers 3 Bookbinding shops 3 Books 3 Bottle caps Bottles: 2 In shipping cartons 1 Open stock 2 Bottling plants 3 Furniture and fixtures Stock - see "Bottles"



Bowling alleys: 3 Excl. beverage stocks, restaurants

and bars 2 Incl. beverage stocks, restaurants

and bars 3 Boxes, barrels & drums: mfg., sales

and storage 4 Brush and broom stocks 3 Burial caskets 2 Butcher shops 4 Cable Cameras and photo equip. - see

"Photography" 3 Can mfg. Candy mfg. 2 Finished stock 3 Machinery and equipment 2 Candy stores, retail 3 Canned goods in cases 3 Canneries Carpet - see "Floor covering" 4 Cement, portland, in bulk storage or

bags Chemicals: Excl. liquids: In glass containers: 2 In shipping cartons 1 Open stock 3 In other than glass containers Liquids - see "Liquids" China - see "Pottery" 3 Churches 2 Cleaning and dyeing plants 2 Clocks 3 Clothing: mfg., sales and storage 2 Clubs, city or country Coffee: 4 Beans 3 Roasting and milling plants Other - see "Foodstuffs" 2 Cold storage plants:



3 Equipment Stocks - see "Foodstuffs" 3 Commissary equipment 2 Computers (electronic) 4 Conduit Controls - see "Instruments" 4 Copra 4 Cordage 4 Cork products 2 Cosmetic mfg.



Cotton: 3 Gin or pickery 4 In bags or bales Creamery: Liquids - see "Liquids" 3 Machinery and equipment 3 Curtains, draperies, blinds, shades

mfg. Dairy - see "Creamery" 3 Dance studios 2 Delicatessen stores 3 Dental product mfg. 3 Department stores Dishes - see "Pottery" 2 Doctor or dental office 3 Doll mfg. Drugs: Sales and storage: 1 Retail 2 Wholesale Drum mfg. - see "Boxes" Dry goods: In bolts - see "Textile: In bolts" 3 Retail



4 Wholesale Electric: 4 Motors, generators Radio and TV - see "Appliances" 3 Repair shops Sales and Storage: Appliances - see "Appliances" Cable - see "Cable" Conduit - see "Conduit" Fixture stocks: 3 Crated 2 Mixed stocks, incl. open stocks Electric light and power plants,

substations - to be specifically rated. 2 Electronic equipment Fabrics - see "Textile: In bolts" or

"Dry goods" Fertilizer - see "Chemicals" 3 Firehouses 3 Firework stocks Floor covering: 4 Mfg. - carpets and rugs Sales and storage: 2 Asphalt tile 4 Carpet and rugs 2 Linoleum in rolls 1 Florist shops Foodstuffs, wholesale and retail: 2 Cold storage In glass containers: 2 In shipping cartons 1 Open stock





3 In other than glass containers (excl. cold storage)

See also "Coffee", "Grocery stores" and "Butcher shops" Foundries: 4 Balance of contents 3 Patterns 2 Fountain lunch Fruit - see "Foodstuffs" Furniture: 3 Mfg. 2 Sales and storage Garages - see "Automotive risks" 3 Gas mfg. (as oxygen, hydrogen,

etc.) Gasoline service stations - see

"Automotive risks" 1 Giftshops Glass: 3 Flat, in original packing cases 1 Flat, (window and plate) in open

racks and bins 2 Plate, in individual compartment

racks or wedged in open racks Glass showcase - see "Showcases" Glassware: 2 In shipping containers 1 Open stock 4 Grain 2 Grocery stores Hardware stores: 2 Retail 3 Wholesale 3 Hat mfg. 4 Hay 4 Hemp Hides - see "Leather" 4 Hops 2 Hospitals and clinics 3 Hotel supply houses



3 Hotels, motels, and trailer parks 3 Household contents 3 Ice cream: Mfg. machinery and equipment Stocks - see "Foodstuffs" 3 Ice skating rinks 2 Instruments, such as aircraft,

electronic, marine Jewelry: 3 Mfg. Sales and storage: 2 Retail 3 Wholesale Laboratories: 1 Chemical 2 Dental and X-ray



1 Physical 2 Lamps (sales and storage) 3 Laundries Leather: 4 Mfg. Sales and storage: 3 Finished goods 4 Hides 3 Libraries Linoleum in rolls - see "Floor

covering" Liquids: 2 In barrels or drums in tiers or racks 3 In barrels or drums stored one high In glass containers: 2 In shipping cartons



1 Open stock 3 In other than glass containers In tanks - see "Tank contents" Liquor stocks - see "Liquids" 3 Lithographing shops 3 Locksmith shops 4 Locomotive and parts Lumber mills and yards - see

"Woodworking" Machinery: 4 Construction - heavy 4 Farm Other - see specific occupancy 3 Machine shops 4 Magazines Mattress mfg: 4 Machinery and equipment 4 Stocks of mattresses 3 Mausoleums, columbariums and

receiving vaults Meat packing plant: 3 Machinery and equipment Stocks - see "Foodstuffs" Meats - see "Foodstuffs" Medical centers - see "Hospitals

and clinics"

4 Metalworkers (see "Machine shops" where applicable)

3 Mortuaries Motels - see "Hotels" Motion picture production plants: 3 Camera machine shops 3 Cutting rooms 2 Dressing room building 3 Film exchanges 3 Film laboratories 3 Film vault buildings 2 Grips



2 Make-up 3 Making or repairing of costumes

building 2 Musical instrument stocks 3 Projection rooms 2 Property storage building 2 Scene docks 2 Scenery and art painting building 2 Sound recording equipment 2 Stages or studios 3 Storage of costumes building 3 Wardrobe buildings 3 Woodworking buildings Motorcycles - see "Bicycle and

Motorcycle shops" 2 Museums 2 Musical instruments 3 Newspaper plants 4 Newsprint in rolls 2 Novelty stores 4 Nut processing plants, incl. stocks 1 Objects of art Office: 3 Furniture and fixtures Machines: 2 Electronic computers 3 Other machines Oils - see "Liquids" and "Tank

contents" Optical: Mfg., sales and storage 3 Furniture, fixtures, machinery and

equipment 1 Open stock 3 Stock in shipping cartons 3 Paint mfg., wholesale and retail

stores Paper:



Box mfg. - see "Boxes, barrels & drums: mfg., sales and storage"

3 Stocks, wholesale, other than newsprint in rolls

2 Pawnbrokers shops 2 Pet hospitals Pharmaceutical stocks - see

"Chemicals" or "Drugs" Phonograph: 3 Mfg. Records: 2 Retail 3 Wholesale Photography: 2 Laboratories, galleries and studios 2 Photographic equipment stocks Pianos and organs see "Musical

instruments"



4 Pipes and fittings Plumbers' supplies: 4 Excl. porcelain and enameled toilet

fixtures 2 Porcelain and enameled toilet

fixtures 3 Plumbing shops 3 Pool and billiard parlors, excl.

liquor stocks 1 Porcelain Pottery: 2 Mfg., furniture, fixtures, machinery

and equipment Sales and storage: 1 Open stock 3 Stock in shipping cartons



Power plants - to be specifically rated

Printing plants: 3 Machinery and equipment 3 Paper, incl. finished stock 1 Type stored on galleys in racks Produce - see "Foodstuff" Radio - see "Television and radio" Record shops - see "Phonograph" 3 Refrigerating machinery Refrigerators - see "Appliance sales,

service and storage" 2 Restaurants 4 Roofing materials 4 Rope 4 Rubber mfg. other than tires Rugs - see "Floor covering" 4 Safe deposit boxes, contents of, in

bank vaults 2 Scales, wholesale stocks 3 Schools 2 Seed warehouses 1 Showcases Slaughterhouses - see "Meat

packing plant" and "Foodstuffs" Soap and detergents - see

"Chemicals" Sporting goods: 3 Mfg. 2 Retail 3 Wholesale Sprinkler equipment: 3 With approved earthquake bracing 2 With unapproved earthquake

bracing 3 Stationery stores 1 Statuary Steam generating - see "Power

plants"



Store furniture and fixtures when specifically insured

3 Excl. glass showcases 2 Incl. glass showcases Stoves - see "Appliance sales,

service and storage" 4 Structural steel 2 Surgical supplies Tank contents: 3 Approved anchored tanks and/or

approved flexible pipe connection 1 Unanchored tanks with fixed pipe

connections 2 Unanchored tanks with no pipe

connections 3 Taxidermist shops 2 Telephone and telegraph exchanges Television and radio: 2 Receiving sets 3 Studios 2 Transmitting stations Textile: 3 Mfg. Stocks: 4 In bolts Other stock - see "Dry goods" 3 Theaters Tobacco: 3 Mfg. 2 Sales and storage: 2 Retail, including furniture and

fixtures 3 Wholesale 2 Toy shops Type stored on galleys in racks - see

"Printing plants" Typewriters - see "Office Machines" 3 Upholstery shops



Vacuum tubes - see "Television and

radio" 3 Vending machines Washing machines - see "Appliance

sales, service and storage" 3 Wearing apparel (when not listed

under "Clothing") 3 Welding supplies 4 Wire Woodworking: 4 Sawmills, planing mills, plywood

mills, shingle mills, mill yards 3 Others 4 Wool fiber in bags or bales

Table 73.F. Personal Property Index - Earthquake Insurance

G. Territory Assignment

1. A new ZIP code may be created by the United States Postal Service (USPS), which may not yet be listed in this Manual. If this is the case, to determine the rating territory for a risk located in a new ZIP code, use the ZIP code that formerly applied to the risk before the ZIP code boundaries were changed.

2. Future USPS ZIP code changes will be reflected in ISO's territory assignments in accordance with the ISO ZIP Code Territory maintenance procedures on file with the Insurance Department. This Manual will be updated on a regular basis to reflect future ZIP code changes.

H. Building Code Enforcement

Refer to the Additional Rule titled Building Code Effectiveness Grading, in the state exceptions, for information which may affect Earthquake rating.

74. OTHER CAUSES OF LOSS FORMS

Paragraphs A.1.a. and A.2.a. are replaced by the following:

A. Additional Exclusions

1. Explanation

a. Windstorm Or Hail Exclusion

The Windstorm Or Hail Exclusion can be used:

(1) If the property is eligible for such coverage from an underwriting association (wind pool) or carrier of last resort established under Florida law; or

(2) At the option of the policyholder.

Florida law requires that an insurer issuing a property insurance policy must make available, at the option of the policyholder, an exclusion of windstorm coverage. Such exclusion pertains to any windstorm, including hurricane, and to hail. Coverage may be excluded only if the policyholder provides a statement (wording prescribed in Section 627.712 of the Florida statutes) to the insurer on the policyholder's letterhead. In addition, if an affected structure is subject to a mortgage or lien, the policyholder must also provide the insurer with a statement of consent from the mortgageholder or lienholder. The exclusion of coverage applies for the term of the policy and for each renewal thereafter; changes to the exclusion may be implemented only as of the date of renewal.

The insurer must keep the original copy of the signed statement, electronically or otherwise, and provide a copy to the policyholder.

Policywriting Support Form IL N 154 Your Option To Exclude Windstorm Coverage may be used to inform the policyholder of these requirements.

2. Forms

a. Use Windstorm Or Hail - Direct Damage Exclusion Endorsement CP 10 53 to exclude Windstorm or Hail from direct damage coverage. This endorsement does not apply to coverage provided under the Business Income Coverage Forms, Extra Expense Coverage Form or Leasehold Interest Coverage Form.

To exclude Windstorm or Hail from direct damage coverage and Time Element or Leasehold Interest Coverage, or from Time Element or Leasehold Coverage only, use Windstorm Or Hail Exclusion Endorsement CP 10 54 instead of Windstorm Or Hail - Direct Damage Exclusion Endorsement CP 10 53.

If the policy covers both direct damage and time element (or leasehold interest) coverages, and windstorm coverage is excluded at the option of the policyholder pursuant to Paragraph 1.a.(2) of this rule, use Endorsement CP 10 54.

If the exclusion does not apply at all locations, use the Declarations (or Schedule, if a Schedule is provided in Endorsement CP 10 53 or CP 10 54) to indicate the location(s) to which the exclusion applies.

Paragraph A.3.a. is replaced by the following:

3. Rates And Rate Modifications

a. Windstorm Or Hail

When Windstorm or Hail is excluded, refer to state rates.

When Windstorm or Hail is excluded from direct damage coverage and Time Element or Leasehold Interest Coverage, or from Time Element or Leasehold Coverage only under Windstorm Or Hail Exclusion Endorsement CP 10 54, use the Windstorm or Hail excluded loss cost as the base for rating the Time Element and Leasehold Interest Coverage.

When Windstorm or Hail is excluded from direct damage coverage only, under Windstorm Or Hail - Direct Damage Exclusion Endorsement CP 10 53, use the Basic Group II (i.e. including wind and hail) loss cost as the base in the calculation of the premium for the Business Income Coverage Forms, Extra Expense Coverage Form or Leasehold Interest Coverage Form.

Paragraph F.5. is replaced by the following:

F. Sprinkler Leakage - Earthquake Extension

5. Rate Determination

a. Refer to Rule 73.D.4. to obtain Earthquake Building Classifications.

b. Refer to Table 73.D.3. Earthquake Territories, in these state exceptions, to determine the territory applicable to the location of the property being insured.

c. Select an Earthquake building loss cost from Rule 73. in the state rates, based on building classification and territory.

d. To obtain the building and personal property rates for Sprinkler Leakage - Earthquake Extension Coverage, multiply the Earthquake non-sprinklered building rate by the appropriate factor from Table 74.F.5.d., Sprinkler Leakage - Earthquake Extension Factors.

Personal Property Building S M H 0.210 0.210 0.315 0.420

Table 74.F.5.d. Sprinkler Leakage - Earthquake Extension Factors

e. If the building is over 3 stories in height, multiply the result of Paragraph d. (building and/or personal property rates) by the appropriate factor from Table 73.D.8., Building Height Modification Factors, in the state exceptions. The appropriate factor is determined based on building classification and deductible tier. The deductible tier is specified for each territory in Rule 73. in the state rates.

74. OTHER CAUSES OF LOSS FORMS

A. Additional Exclusions

1. Explanation

One or more of the following causes of loss may be excluded from coverage under the Causes of Loss - Basic, Causes of Loss - Broad and Causes of Loss - Special Forms:

a. Windstorm or Hail;

b. Vandalism;

c. Sprinkler Leakage.

2. Forms

a. Use Windstorm Or Hail Exclusion Endorsement CP 10 54 to exclude Windstorm or Hail.

b. Use Vandalism Exclusion Endorsement CP 10 55 to exclude Vandalism.

c. Use Sprinkler Leakage Exclusion Endorsement CP 10 56 to exclude sprinkler Leakage. Endorsement CP 10 56 may be used for properties which have a sprinkler leakage exposure, whether these properties qualify for sprinklered (specific) rating or are non-sprinkler-rated. Endorsement CP 10 56 may not be used on non-sprinkler-rated properties which do not have a sprinkler leakage exposure.

3. Rates And Rate Modifications


When Windstorm or Hail is excluded, multiply the 80% coinsurance Basic Group II rate by the appropriate factor for the remaining causes of loss.

Symbol Factor

AA (Superior Construction

.425

A (Wind Resistive)

.425

All Other .315

With respect to Rule 70.E.2.a.(1), disregard any numerical (multiplicative) prefix to the Basic Group II Symbol when determining the 80% coinsurance rate. Use the rate corresponding to the letter symbol only.

b. Vandalism

Subtract the rates shown in the multistate rates from the 80% Coinsurance Group I rate. Refer to Paragraph c.(1)(b) if both Vandalism and Sprinkler Leakage are excluded.

c. Sprinkler Leakage

(1) Applicable to properties rated as sprinklered (RCP Code 4XXX),

(a) Multiply 80% Coinsurance Group I rate by the applicable factor from the following table.

Construction (Code) Buildings Contents Frame (1) .92 .93 Joisted Masonry (2) .93 .86 Non-Combustible (3) .77 .81 Masonry Non-

Combustible (4) .81 .83

Modified Fire-Resistive (5)

and Fire-Resistive (6) .84 .87

Table 74.A.3.c.(1)(a) Sprinkler Leakage Factors

(b) When both Sprinkler Leakage and Vandalism are excluded, apply the sprinkler leakage factor before subtracting the Vandalism rate credit.

(2) Applicable to properties having sprinkler leakage exposure but rated as non-sprinklered (RCP Code 1XXX, 2XXX or 3XXX), subtract the rate shown in the multistate rates from the Basic Group I rate.

(3) Applicable to properties having no sprinkler leakage exposure, make no modification to the Basic Group I rate. (These properties are not eligible for Endorsement CP 10 56.)

B. Molten Material


Property damage and time element policies may be extended to include loss resulting from accidental discharge of molten material.

2. Form

Use Molten Material Endorsement CP 10 60.


Multiply the Basic Group I property damage rate or time element base rate by 0.10.

C. Pier And Wharf Additional Covered Causes Of Loss

1. Covered Causes Of Loss

Pier And Wharf Additional Covered Causes Of Loss Endorsement CP 10 70 extends the Basic and Broad Causes of Loss Forms to include loss caused by:

a. Floating ice; or

b. Collision of any vessel or floating object.

2. Form


3. Eligibility

a. Pier and wharf structures are eligible except floating structures or equipment not incidental to a fixed pier or wharf. However, eligible pier and wharf structures are covered

property only if added to the policy by endorsement. Refer to Rule 30.C.2. for use of Additional Covered Property Endorsement CP 14 10.

b. Endorsement CP 10 70 does not apply to property to which Causes Of Loss - Special Form CP 10 30 applies. Refer to Paragraph G. for explanation of the procedure to override Watercraft Exclusion Endorsement CP 10 35.

c. Endorsement CP 10 70 may apply to property damage or time element coverages.

4. Rule Of Application

If attached, Endorsement CP 10 70 must apply to all eligible pier and wharf items in the same policy.

5. Rates

Use the 80% coinsurance property damage rates shown in the multistate rates.

D. Radio Or Television Antennas


Under this form, the Special Exclusion related to radio or television antennas in the Causes of Loss Forms is modified to cover loss of business income due to damage to radio or television antennas including their lead-in wiring, masts or towers.

2. Form

Use Radio Or Television Antennas - Business Income Or Extra Expense Endorsement CP 15 50.


Use the rates and rating procedures that apply to the Business Income Coverage Form. Obtain the Group II rate for radios and television antennas from the state rates.

E. Radioactive Contamination


This form extends property damage and time element coverage to cover loss caused by sudden and accidental radioactive contamination including resultant radiation damage to described property arising from material used or stored on the described premises. The form does not provide coverage if there is a nuclear reactor or any new or used nuclear fuel elements on described premises.

2. Form

Use Radioactive Contamination Endorsement CP 10 37. Designate on the Declarations whether the coverage is:

a. Limited (coverage provided for radioactive contamination resulting from a covered cause of loss), or

b. Broad (coverage provided for radioactive contamination without the requirement that it result from a covered cause of loss).

3. Eligibility

a. Do not use Endorsement CP 10 37 if use and storage of radioactive material exceeds quantities provided for in the Rating Plan for Radioactive Contamination Assumption.

b. Do not use the Limited Radioactive Contamination option when the Causes Of Loss - Special Form applies.

4. Rules

a. Coverages Applicable

Endorsement CP 10 37 applies to property damage or time element coverage forms.


If Endorsement CP 10 37 is not to apply to all buildings or personal property included in a blanket item:

(1) Designate in the Declarations the specific building(s) or personal property to which it applies;

(2) Show a separate radioactive contamination limit of insurance for the designated building(s) or personal property item(s); and

(3) Apply the same coinsurance percentage that applies to the other covered causes of loss.

5. Rates

Apply to ISO.

F. Sprinkler Leakage - Earthquake Extension


The Basic, Broad and Special Causes of Loss Forms may be extended to include sprinkler leakage loss caused by earthquake, volcanic eruption, explosion or effusion.

2. Form

Use Earthquake And Volcanic Eruption Endorsement CP 10 40 and indicate in the Declarations that Endorsement CP 10 40 is being used to cover "Earthquake - Sprinkler Leakage Only". The "Earthquake - Sprinkler Leakage Only" Option appears under Additional Covered Causes Of Loss in Endorsement CP 10 40.

3. Definition Of Susceptibility Gradings

Use the following Susceptibility Gradings to develop rates for Personal Property:

a. Slight (S)

Slight susceptibility to damage by water, for example:

· Alcoholic Beverages

· Automobile Parts

· Canned Goods

· Safes

b. Moderate (M)

Moderate susceptibility to damage by water, for example:

· Aircraft Parts

· Baked Products

· Household Appliances

· Lamps

c. High (H)

High susceptibility to damage by water, for example:

· Antiques

· Artists Materials

· Books

· Jewelry

4. Rules

a. Restriction

Rule 74.F., including rating instructions, applies only to "Earthquake - Sprinkler Leakage Only" Coverage as written under Endorsement CP 10 40. (Refer to Rule 75. for "Earthquake - Sprinkler Leakage Only" Coverage written on a sub-limit/aggregate limit basis under Endorsement CP 10 45.)

b. Ineligibility Of Rating Plans

Earthquake sprinkler leakage rates are not eligible for credit under any plan which provides rate credits for dispersal of risk.

c. Coinsurance


(a) Multiply the 80% coinsurance building or personal property rate by the following factors to convert the 80% rate to 90% or 100% coinsurance.


Factor

100% .90 90% .95

Table 74.F.4.c.(1)(a) Coinsurance Modification Factors - Earthquake Sprinkler Leakage

(b) When less than 80% coinsurance, multiply the rates calculated in Paragraph 5. by a factor of 2.0 to convert the 80% coinsurance rate to a rate for less than 80% coinsurance or to a flat rate. This is applicable only when Endorsement CP 10 40 is attached to the Causes Of Loss - Basic Form CP 10 10.


Refer to Rules 34., 35. and 36. for coinsurance rating procedure for blanket and multiple location average rated coverages.


a. Refer to Rule 73.D.4. to obtain Earthquake Building Classifications.

b. Refer to state rates to obtain Earthquake Territory.

c. Use the table shown in the state rates to obtain the 80% coinsurance rates.

G. Watercraft Exclusion Buyback

1. Explanation

a. Watercraft Exclusion Endorsement CP 10 35 may be attached if:

(1) The policy covers waterfront property under Additional Covered Property Endorsement CP 14 10 (retaining walls that are not part of a building; bulkheads; pilings; piers; wharves; docks); and

(2) The waterfront property is subject to Causes Of Loss - Special Form CP 10 30.

See Rule 30.C.2. for use of Endorsement CP 14 10.

b. Endorsement CP 10 35 may be omitted from the policy with respect to the property listed in Paragraph 1.a.(1), for an additional charge.

2. Eligibility

a. Buildings or structures eligible for Form CP 10 30 are eligible for the Watercraft Exclusion Buyback except for floating structures or equipment not incidental to a fixed pier or wharf.

b. This buyback does not apply to property to which Causes of Loss - Basic or Broad Forms apply. Refer to Paragraph C. for explanation of Endorsement CP 10 70.

c. This buyback may apply to property damage or time element coverages.

3. Rule Of Application

When Endorsement CP 10 35 is omitted it must be omitted from all eligible items in the same policy.

4. Rates

Use the 80% coinsurance property damage rates shown in the multistate rates.

75. EARTHQUAKE AND VOLCANIC ERUPTION ENDORSEMENT (SUB-LIMIT FORM)

Paragraph C.6.a. is replaced by the following:

C. Rules

6. Rating

a. Rate Determination - Sub-Limit Form

(1) Refer to Rule 73.D.4. to obtain Earthquake Building Classification.

(2) Refer to Table 73.D.3. Earthquake Territories in these state exceptions to determine the territory applicable to the location of the property being insured.

(3) Determine the deductible tier, which is specified for each territory in Rule 73. in the state rates.

(4) Select an Earthquake loss cost (building, contents) from Rule 73., in the state rates, based on building classification and territory.

(5) Refer to Table 75.C.6.a.(5) Sub-Limit Factors for sub-limit factors. The applicable table is determined by deductible tier. The appropriate factor is determined based on building classification, sub-limit percentage and deductible percentage.

Sub-Limit Factors - Deductible Tier 1

Building Sublimit Deductibles Classes Percentage 5% 10% 15% 20% 25% 30% 35% 40% 1C, 1D and

3B 5% 2.84 2.00 1.61 1.36 1.19 1.04 0.91 0.81

10% 2.42 1.80 1.49 1.28 1.12 0.98 0.86 0.76 15% 2.15 1.66 1.39 1.20 1.05 0.92 0.81 0.72 20% 1.95 1.54 1.30 1.13 0.99 0.87 0.77 0.68 25% 1.80 1.44 1.22 1.06 0.93 0.82 0.72 0.64 30% 1.67 1.35 1.15 1.01 0.88 0.78 0.68 0.60 35% 1.57 1.28 1.09 0.95 0.84 0.73 0.64 0.56 40% 1.47 1.21 1.03 0.90 0.79 0.69 0.60 0.53 50% 1.31 1.08 0.93 0.81 0.71 0.62 0.53 0.46 60% 1.18 0.98 0.84 0.73 0.63 0.54 0.47 0.39 70% 1.06 0.88 0.75 0.65 0.56 0.48 NA NA 2A, 2B and

4A 5% 3.71 2.26 1.65 1.29 1.04 0.90 0.76 0.65

10% 2.98 1.95 1.47 1.16 0.97 0.83 0.71 0.61 15% 2.54 1.73 1.33 1.07 0.90 0.77 0.66 0.57

Building Sublimit Deductibles Classes Percentage 5% 10% 15% 20% 25% 30% 35% 40% 20% 2.23 1.56 1.22 1.00 0.84 0.72 0.62 0.53 25% 1.99 1.43 1.13 0.93 0.78 0.67 0.58 0.50 30% 1.81 1.32 1.05 0.87 0.74 0.63 0.54 0.47 35% 1.66 1.22 0.98 0.81 0.69 0.59 0.51 0.44 40% 1.53 1.14 0.92 0.77 0.65 0.56 0.48 0.40 50% 1.33 1.00 0.81 0.68 0.57 0.49 0.41 0.35 60% 1.17 0.89 0.72 0.60 0.51 0.43 0.36 0.29 70% 1.05 0.80 0.64 0.53 0.44 0.37 NA NA 3A, 4B and

5A 5% 3.59 2.21 1.60 1.25 1.02 0.86 0.74 0.64

10% 2.90 1.91 1.43 1.13 0.94 0.80 0.69 0.61 15% 2.47 1.69 1.29 1.04 0.87 0.75 0.65 0.57 20% 2.16 1.52 1.18 0.97 0.82 0.70 0.61 0.54 25% 1.94 1.39 1.09 0.90 0.77 0.66 0.58 0.52 30% 1.76 1.28 1.02 0.85 0.72 0.63 0.55 0.49 35% 1.61 1.19 0.95 0.80 0.68 0.60 0.53 0.47 40% 1.49 1.11 0.90 0.75 0.65 0.57 0.51 0.45 50% 1.30 0.99 0.81 0.68 0.59 0.52 0.46 0.41 60% 1.16 0.89 0.73 0.62 0.54 0.48 0.42 0.37 70% 1.04 0.81 0.67 0.57 0.49 0.43 NA NA

Table 75.C.6.a.(5)#1 Sub-Limit Factors - Deductible Tier 1


Building Sublimit Deductibles Classes Percentage 5% 10% 15% 20% 25% 30% 35% 40% 3C, 4C,

4D, 5% NA 2.90 2.09 1.61 1.31 1.10 0.94 0.81

5B and 5C 10% NA 2.49 1.85 1.46 1.20 1.02 0.87 0.76 15% NA 2.20 1.67 1.34 1.11 0.95 0.82 0.72 20% NA 1.98 1.52 1.24 1.04 0.89 0.77 0.68 25% NA 1.80 1.41 1.15 0.97 0.84 0.73 0.64 30% NA 1.66 1.31 1.08 0.91 0.79 0.69 0.61 35% NA 1.54 1.22 1.01 0.86 0.75 0.66 0.58 40% NA 1.43 1.15 0.96 0.82 0.71 0.63 0.56 50% NA 1.26 1.03 0.86 0.74 0.65 0.58 0.51 60% NA 1.13 0.93 0.78 0.68 0.60 0.53 0.47

Building Sublimit Deductibles Classes Percentage 5% 10% 15% 20% 25% 30% 35% 40% 70% NA 1.03 0.85 0.72 0.63 0.55 NA NA 5AA 5% NA 2.80 2.03 1.59 1.30 1.09 0.94 0.82 10% NA 2.42 1.81 1.45 1.20 1.02 0.88 0.77 15% NA 2.14 1.64 1.33 1.11 0.95 0.83 0.73 20% NA 1.93 1.50 1.23 1.04 0.90 0.79 0.70 25% NA 1.76 1.39 1.15 0.98 0.85 0.75 0.66 30% NA 1.63 1.30 1.08 0.92 0.80 0.71 0.64 35% NA 1.51 1.22 1.02 0.87 0.76 0.68 0.61 40% NA 1.41 1.14 0.96 0.83 0.73 0.65 0.59 50% NA 1.25 1.03 0.87 0.76 0.67 0.60 0.54 60% NA 1.13 0.93 0.80 0.70 0.62 0.56 0.50 70% NA 1.03 0.86 0.74 0.65 0.58 NA NA




3B 5% 3.65 2.46 1.87 1.47 1.17 0.98 0.81 0.62

10% 3.05 2.17 1.67 1.32 1.07 0.89 0.71 0.58 15% 2.66 1.93 1.50 1.21 0.98 0.80 0.65 0.52 20% 2.36 1.74 1.37 1.11 0.89 0.73 0.59 0.47 25% 2.12 1.59 1.26 1.01 0.82 0.67 0.54 0.43 30% 1.93 1.46 1.15 0.93 0.75 0.61 0.50 0.39 35% 1.77 1.34 1.06 0.85 0.69 0.56 0.45 0.36 40% 1.63 1.24 0.98 0.79 0.64 0.52 0.41 0.32 50% 1.40 1.06 0.85 0.68 0.55 0.44 0.35 0.27 60% 1.21 0.93 0.73 0.58 0.47 0.37 0.29 0.23 70% 1.06 0.81 0.64 0.51 0.41 0.32 NA NA 2A, 2B and

4A 5% 5.33 2.93 1.88 1.25 0.88 0.65 0.45 0.32

10% 4.13 2.40 1.57 1.07 0.76 0.55 0.38 0.28 15% 3.38 2.02 1.34 0.93 0.66 0.47 0.34 0.24 20% 2.85 1.73 1.16 0.81 0.57 0.41 0.29 0.21 25% 2.45 1.52 1.02 0.71 0.51 0.37 0.26 0.18 30% 2.15 1.34 0.90 0.63 0.45 0.32 0.23 0.16

Building Sublimit Deductibles Classes Percentage 5% 10% 15% 20% 25% 30% 35% 40% 35% 1.91 1.19 0.81 0.57 0.40 0.29 0.20 0.14 40% 1.71 1.07 0.73 0.51 0.36 0.26 0.18 0.13 50% 1.41 0.89 0.60 0.42 0.30 0.21 0.15 0.10 60% 1.19 0.75 0.51 0.35 0.25 0.18 0.12 0.09 70% 1.03 0.65 0.44 0.31 0.22 0.15 NA NA 3A, 4B and

5A 5% 4.42 2.71 1.88 1.38 1.04 0.80 0.61 0.49

10% 3.56 2.29 1.63 1.21 0.92 0.71 0.55 0.43 15% 3.00 1.99 1.43 1.07 0.82 0.64 0.49 0.39 20% 2.60 1.75 1.27 0.96 0.74 0.57 0.44 0.35 25% 2.28 1.56 1.14 0.87 0.67 0.52 0.40 0.31 30% 2.04 1.40 1.03 0.78 0.60 0.47 0.36 0.28 35% 1.83 1.27 0.94 0.71 0.55 0.43 0.33 0.26 40% 1.67 1.16 0.86 0.65 0.50 0.39 0.30 0.23 50% 1.40 0.98 0.73 0.55 0.42 0.33 0.25 0.19 60% 1.20 0.84 0.62 0.47 0.36 0.28 0.21 0.16 70% 1.04 0.73 0.54 0.41 0.31 0.24 NA NA




4D, 5% NA 3.23 2.35 1.81 1.43 1.16 0.95 0.77

5B and 5C 10% NA 2.79 2.08 1.62 1.29 1.05 0.86 0.71 15% NA 2.46 1.86 1.47 1.18 0.96 0.79 0.64 20% NA 2.21 1.69 1.34 1.08 0.88 0.72 0.59 25% NA 2.00 1.54 1.22 0.99 0.81 0.66 0.54 30% NA 1.82 1.41 1.13 0.91 0.74 0.61 0.50 35% NA 1.67 1.30 1.04 0.84 0.69 0.56 0.46 40% NA 1.54 1.20 0.96 0.78 0.63 0.52 0.42 50% NA 1.33 1.04 0.83 0.67 0.55 0.44 0.36 60% NA 1.16 0.91 0.73 0.58 0.47 0.38 0.30 70% NA 1.02 0.80 0.64 0.51 0.41 NA NA 5AA 5% NA 3.59 2.52 1.87 1.44 1.10 0.87 0.68 10% NA 3.06 2.20 1.66 1.27 0.99 0.78 0.61

Building Sublimit Deductibles Classes Percentage 5% 10% 15% 20% 25% 30% 35% 40% 15% NA 2.66 1.95 1.47 1.14 0.89 0.70 0.55 20% NA 2.36 1.73 1.32 1.03 0.80 0.63 0.49 25% NA 2.11 1.56 1.19 0.93 0.72 0.57 0.44 30% NA 1.90 1.42 1.08 0.84 0.66 0.51 0.40 35% NA 1.73 1.29 0.99 0.77 0.60 0.47 0.36 40% NA 1.58 1.18 0.91 0.70 0.54 0.43 0.33 50% NA 1.34 1.00 0.77 0.59 0.46 0.36 0.27 60% NA 1.15 0.86 0.66 0.51 0.39 0.30 0.23 70% NA 1.00 0.75 0.57 0.44 0.34 NA NA




3B 5% 4.66 2.83 1.92 1.42 1.05 0.79 0.61 0.49

10% 3.75 2.38 1.67 1.23 0.92 0.70 0.55 0.39 15% 3.14 2.06 1.46 1.08 0.82 0.63 0.47 0.35 20% 2.71 1.80 1.29 0.97 0.73 0.55 0.41 0.32 25% 2.38 1.60 1.16 0.87 0.65 0.49 0.38 0.29 30% 2.11 1.44 1.05 0.78 0.58 0.44 0.34 0.25 35% 1.90 1.30 0.94 0.70 0.53 0.40 0.30 0.22 40% 1.72 1.18 0.85 0.64 0.48 0.36 0.27 0.20 50% 1.43 0.99 0.72 0.54 0.40 0.30 0.22 0.16 60% 1.23 0.84 0.61 0.46 0.34 0.25 0.19 0.14 70% 1.06 0.73 0.53 0.39 0.29 0.22 NA NA 2A, 2B and

4A 5% 6.99 3.09 1.62 0.89 0.51 0.30 0.18 0.13

10% 5.04 2.35 1.25 0.70 0.40 0.24 0.15 0.09 15% 3.90 1.87 1.01 0.57 0.33 0.20 0.12 0.07 20% 3.15 1.53 0.83 0.47 0.28 0.16 0.10 0.06 25% 2.62 1.28 0.70 0.40 0.23 0.14 0.08 0.05 30% 2.23 1.10 0.60 0.34 0.20 0.12 0.07 0.04 35% 1.94 0.96 0.52 0.30 0.17 0.10 0.06 0.03 40% 1.71 0.84 0.46 0.26 0.15 0.09 0.05 0.03 50% 1.38 0.68 0.37 0.21 0.12 0.07 0.04 0.02

Building Sublimit Deductibles Classes Percentage 5% 10% 15% 20% 25% 30% 35% 40% 60% 1.15 0.57 0.31 0.18 0.10 0.06 0.04 0.02 70% 0.99 0.49 0.27 0.15 0.09 0.05 NA NA 3A, 4B and

5A 5% 6.00 3.11 1.83 1.14 0.73 0.48 0.32 0.21

10% 4.56 2.47 1.48 0.94 0.60 0.40 0.26 0.17 15% 3.65 2.02 1.23 0.78 0.51 0.33 0.22 0.15 20% 3.02 1.70 1.04 0.67 0.43 0.29 0.19 0.12 25% 2.56 1.46 0.90 0.57 0.37 0.25 0.16 0.10 30% 2.21 1.27 0.78 0.50 0.33 0.21 0.14 0.09 35% 1.94 1.12 0.69 0.44 0.29 0.19 0.12 0.08 40% 1.73 0.99 0.62 0.39 0.26 0.17 0.11 0.07 50% 1.40 0.81 0.50 0.32 0.21 0.14 0.09 0.06 60% 1.18 0.68 0.42 0.27 0.17 0.11 0.07 0.05 70% 1.01 0.58 0.36 0.23 0.15 0.10 NA NA




4D, 5% NA 3.91 2.66 1.90 1.40 1.06 0.80 0.59

5B and 5C 10% NA 3.28 2.28 1.65 1.23 0.93 0.70 0.53 15% NA 2.82 1.98 1.45 1.09 0.82 0.62 0.47 20% NA 2.47 1.75 1.29 0.96 0.73 0.55 0.42 25% NA 2.18 1.56 1.15 0.86 0.65 0.50 0.37 30% NA 1.95 1.40 1.04 0.78 0.59 0.45 0.34 35% NA 1.76 1.27 0.94 0.71 0.53 0.40 0.30 40% NA 1.60 1.15 0.85 0.64 0.48 0.36 0.27 50% NA 1.34 0.97 0.72 0.54 0.40 0.30 0.23 60% NA 1.14 0.83 0.61 0.46 0.34 0.26 0.19 70% NA 0.99 0.72 0.53 0.39 0.30 NA NA 5AA 5% NA 4.76 2.88 1.93 1.23 0.85 0.61 0.38 10% NA 3.82 2.40 1.58 1.04 0.73 0.49 0.32 15% NA 3.19 2.01 1.33 0.89 0.61 0.42 0.28 20% NA 2.70 1.72 1.15 0.76 0.52 0.36 0.24 25% NA 2.33 1.50 1.00 0.66 0.46 0.31 0.20

Building Sublimit Deductibles Classes Percentage 5% 10% 15% 20% 25% 30% 35% 40% 30% NA 2.04 1.31 0.87 0.59 0.40 0.27 0.18 35% NA 1.80 1.16 0.78 0.52 0.35 0.24 0.15 40% NA 1.61 1.04 0.69 0.46 0.31 0.21 0.14 50% NA 1.32 0.85 0.57 0.37 0.25 0.17 0.11 60% NA 1.11 0.71 0.47 0.31 0.21 0.14 0.09 70% NA 0.95 0.61 0.41 0.27 0.18 NA NA


75. EARTHQUAKE AND VOLCANIC ERUPTION ENDORSEMENT (SUB-LIMIT FORM)


This insurance provides coverage for loss by earthquake and volcanic eruption, explosion or effusion at a limit of insurance lower than the limit for other causes of loss, subject to an annual aggregate.

B. Forms

1. Use Earthquake And Volcanic Eruption Endorsement (Sub-Limit Form) CP 10 45.

2. Use Earthquake - Volcanic Eruption Coverage Schedule CP DS 06 with Endorsement CP 10 45.

3. Use a Statement of Values except for Builders Risk non-reporting coverage. The earthquake deductible is determined as a percentage of the stated value of property.

C. Rules

1. Coinsurance

The Coinsurance Condition does not apply to the coverage provided under Endorsement CP 10 45.

2. Specific And Blanket Insurance

a. For policies containing more than one item of covered property, Earthquake - Volcanic Eruption Coverage may apply to any or all items. Designate in Endorsement CP DS 06 or in the Declarations the items to which Endorsement CP 10 45 applies.

b. Insurance under Endorsement CP 10 45 may be written on a specific or blanket basis. Enter the selected limit(s) of insurance in Endorsement CP DS 06 or in the Declarations.

c. A single blanket limit may be written for all property, locations and coverages (e.g., property damage and time element) under a policy. Or, different blanket limits may be written for different groups of items, locations and coverages.

d. When Earthquake - Volcanic Eruption Coverage is written under a blanket limit(s), with other perils subject to specific limits, the specific limit is the maximum amount recoverable for an earthquake or volcanic eruption loss to the affected property or coverage.

3. Limits Of Insurance

a. The limit of insurance under Endorsement CP 10 45 is an annual aggregate limit, which applies to the total of all loss or damage that is caused by earthquake or volcanic eruption in a 12-month period (starting with the beginning of the present annual policy period), even if there is more than one earthquake or volcanic eruption during that period of time. If the first earthquake or volcanic eruption does not exhaust the limit of insurance, then the balance of that limit is available for a subsequent earthquake or volcanic eruption.

b. Endorsement CP 10 45 includes an Increased Annual Aggregate Limit Option. Under this option, the annual aggregate is two times the limit of insurance; but the limit of insurance remains the maximum amount recoverable for a single earthquake or volcanic eruption. Indicate in Endorsement CP DS 06 or in the Declarations whether the Increased Annual Aggregate Limit Option applies.

c. The limit of insurance stated for Earthquake - Volcanic Eruption is the maximum amount recoverable for loss or damage by earthquake or volcanic eruption. The Earthquake - Volcanic Eruption limit of insurance is not in addition to the limit of insurance that applies to other Covered Causes of Loss. For example, the maximum amount recoverable for the total of all loss or damage caused by an earthquake and fire resulting from the earthquake is the limit of insurance applicable to fire.

d. Amounts payable under Additional Coverages and Coverage Extensions do not increase the Earthquake - Volcanic Eruption limit of insurance.

4. Deductibles

a. Property damage coverage is subject to a percentage deductible which applies to the value of property that sustains damage by earthquake or volcanic eruption. The value to be used in determining the deductible amount is the value stated in the Statement of Values, or in the Report of Values for reporting form policies. For Builders Risk non-reporting policies, the relevant value is the actual cash value of the damaged property as of the time of loss.

b. For deductible percentages, refer to the tables under Paragraph C.6.a.(5) in the state exceptions. Enter the applicable deductible percentage(s) in Endorsement CP DS 06 or in the Declarations.

5. Options

a. Refer to Paragraph 3.b. of this rule for the Increased Annual Aggregate Limit Option.

b. Endorsement CP 10 45 may be used to limit coverage to "Earthquake - Sprinkler Leakage Only". This option is made applicable by appropriate entry in Endorsement CP DS 06 or in the Declarations.

c. The masonry veneer limitation in Endorsement CP 10 45 (which excludes loss to exterior masonry veneer but includes stucco on wood frame walls) may be deleted. Indicate in Endorsement CP DS 06 or in the Declarations that the "Including Masonry Veneer" Option applies.

6. Rating

a. Rate Determination - Sub-Limit Form

(1) Refer to Rule 73.D.4. to obtain Earthquake Building Classification.

(2) Refer to the territory section for ZIP code-based definitions to determine the territory applicable to the location of the property being insured.

(3) Determine the deductible tier, which is specified for each territory in Rule 73. in the state rates.

(4) Select an Earthquake loss cost (building, contents) from Rule 73. in the state rates based on building classification and territory.

(5) Refer to Table 75.C.6.a.(5) Sub-Limit Factors in the state exceptions for sub-limit factors. The applicable table is determined by deductible tier. The appropriate factor is determined based on building classification, sub-limit percentage and deductible percentage.

b. Rate Determination - Sub-Limit Form - Property Damage Coverage

(1) To obtain the building and personal property rates for Earthquake And Volcanic Eruption Sub-Limit Coverage, multiply the Earthquake rate (building, contents) by the appropriate factor from Table 75.C.6.a.(5) Sub-Limit Factors. The sub-limit percentage is the insurance-to-value ratio underlying the limit of insurance on the property.

(2) If the building is over 3 stories in height, multiply the result of Paragraph (1) (building and/or personal property rates) by the appropriate factor from Table 73.D.8. Building Height Modification Factors in the state exceptions. The appropriate factor is determined based on building classification and deductible tier.

(3) If the building is sprinklered (meaning, there is an operable sprinkler system in any part of the building), multiply the result of Paragraph (1) or (2) by a factor of 1.06.

(4) If the Masonry Veneer Limitation of Form CP 10 45 is deleted, multiply the building rate resulting from Paragraph (1), (2) or (3) by the appropriate factor from Table 73.D.4.d. Masonry Veneer Coverage Factors.

(5) If there is a roof tank on the building, multiply the result of Paragraph (1), (2), (3) or (4) by a factor of 1.25.

c. Rate Determination - Sub-Limit Form - Time Element Coverage

(1) Select the Earthquake building loss cost.

(2) Multiply the Earthquake building rate by the appropriate time element factor as specified in Rules 50. and 52.

Under Rule 50., select the time element factor for the coinsurance level that corresponds to the ratio of the Earthquake sub-limit to the estimated amount of annual business income. If this ratio is less than 50%, select the time element factor for no coinsurance.

(3) To obtain the time element rate for Earthquake And Volcanic Eruption Sub-Limit Coverage, multiply the result of Paragraph (2) by .999. The .999 factor accounts for the reduction in protection inherent in the use of an annual aggregate limit.

d. Rate Determination - Sub-Limit Form - Earthquake - Sprinkler Leakage Only Coverage

(1) Select the Earthquake building loss cost.

(2) Multiply the Earthquake building rate by the appropriate factor from Table 75.C.6.a.(5) Sub-Limit Factors. The sub-limit percentage is the insurance-to-value ratio underlying the limit of insurance on the property.

(3) To obtain the rate for Earthquake Sprinkler Leakage Sub-Limit Coverage, multiply the result of Paragraph (2) by the appropriate factor from Table 74.F.5.d. Sprinkler Leakage - Earthquake Extension Factors in the state exceptions.

(4) If the building is over 3 stories in height, multiply the result of Paragraph (3) by the appropriate factor from Table 73.D.8. Building Height Modification Factors in the state exceptions. The appropriate factor is determined based on building classification and deductible tier.

e. Rating Of Increased Annual Aggregate Limit Option

Refer to rating procedures implemented by the Company in compliance with regulatory requirements.

76. FLOOD COVERAGE ENDORSEMENT

A. Description of Coverage

This insurance provides coverage for loss by flood. Flood insurance includes:

1. Sewer back-up or overflow resulting from flood if the back-up or overflow occurs within 72 hours after the flood recedes;

2. Coverage on foundations below the lowest basement floor or sub-surface of the ground, and underground pipes, flues and drains, with respect to a building to which this flood insurance applies.

B. Forms

1. Use Flood Coverage Endorsement CP 10 65.

2. Use Flood Coverage Schedule CP DS 65 with CP 10 65.

3. Use a Statement of Values when coverage is written on a blanket basis.

C. Rules

1. Ineligibility

a. Property covered under the Builders Risk Coverage Form is not eligible for Endorsement CP 10 65.

b. Certain properties are not eligible for flood insurance pursuant to the provisions of the Coastal Barrier Resources Act, 16 U.S.C. 3501 et seq. and the Coastal Barrier Improvement Act of 1990, Pub. L. 101-591, 16 U.S.C. 3501 et seq. Flood Coverage Endorsement CP 10 65 cites these Acts under Property Not Covered.

2. Inception of Coverage And Increases In Coverage

Coverage is not provided with respect to a flood that begins before or within 72 hours after the inception date of the Flood Coverage Endorsement. An increase in the amount of flood insurance does not apply with respect to a flood that begins before or within 72 hours after the insured requests the increase.

3. Coinsurance

Coverage may be written at the Limit of Insurance which applies to other Covered Causes of Loss, or at a lower Limit on a no-coinsurance basis. If coverage is written on a no-coinsurance basis, indicate in Coverage Schedule CP DS 65 or in the Declarations that the No-Coinsurance Option applies.

4. Specific And Blanket Insurance

a. For policies containing more than one item of covered property, flood coverage may apply to any or all items. Designate in Coverage Schedule CP DS 65 or in the Declarations the items to which CP 10 65 applies. Property in the open is not covered except to the extent that such coverage is specified in the Schedule or Declarations.

b. Insurance under CP 10 65 may be written on a specific or blanket basis. Enter the selected limit(s) of insurance in Coverage Schedule CP DS 65 or in the Declarations.

c. A single blanket limit may be written for all property, locations and coverages (e.g., property damage and time element) under a policy. Or, different blanket limits may be written for different groups of items, locations and coverages.

5. Limits Of Insurance

a. Enter a Limit of Insurance for Flood in Coverage Schedule CP DS 65 or in the Declarations. This Limit is the maximum amount payable in a single occurrence of flood.

b. Also enter an Annual Aggregate for Flood in Coverage Schedule CP DS 65 or in the Declarations. If there is more than one flood in a 12-month period (starting with the beginning of the present annual policy period), the Annual Aggregate is the maximum amount payable for the total of all flood losses sustained during that period of time.

c. If the Flood Limit and the Annual Aggregate amount are the same, or if there is no amount stated as an Annual Aggregate, then the Flood Limit is the maximum amount payable in the 12-month period even if there is more than one occurrence of flood.

d. The Flood Limit is not in addition to the limit of insurance that applies to other Covered Causes of Loss. For example, the maximum amount recoverable for the total of all loss or damage caused by a flood and fire resulting from the flood is the limit of insurance applicable to fire.

e. Amounts payable under Additional Coverages and Coverage Extensions do not increase the Flood Limit.

6. Other Insurance

a. Coverage under Endorsement CP 10 65 is written as excess over the maximum limit that can be insured under a National Flood Insurance Program (NFIP) policy, even if NFIP

coverage was not obtained or maintained. The excess clause does not apply if the property is not eligible for NFIP coverage, or was not eligible when CP 10 65 was written.

b. The insurer may agree to write Endorsement CP 10 65 without underlying NFIP coverage, by indicating in Coverage Schedule CP DS 65 or in the Declarations that the Underlying Insurance Waiver applies.

7. Rating and Deductibles

Refer to rating provisions and deductibles implemented by the Company in compliance with regulatory requirements.

77. ELECTRONIC COMMERCE ENDORSEMENT


This optional endorsement enhances coverage related to use of the Internet or other computer-based interactive communications network in conducting commerce, including business-to-business commerce.

This endorsement does not respond to loss arising from the use of a computer system in an insured's internal operations.

The endorsement provides the following coverages:

1. Section I - Electronic Data Coverage covers the restoration or replacement of electronic data which is destroyed or corrupted by a covered cause of loss. The data must be owned by or licensed or leased to the insured; data which is licensed, leased or rented to others is not covered. There is no coverage for the cost to duplicate research that led to the development of the electronic data.

2. Section II - Time Element Coverage covers business income loss and extra expense caused by suspension of e-commerce activity. When the suspension is caused by a Section I loss, time element coverage is provided for up to 90 days. When the suspension is caused solely by interruption in network service, coverage is provided for up to 2 weeks. A 24-hour waiting period applies to Section II Coverage. This waiting period, and the aforementioned coverage periods, are not affected by endorsements which modify a time element policy.

When the endorsement is attached to a policy, it provides both Section I and Section II Coverages. Section II applies regardless of whether the underlying policy includes time element coverage.

B. Forms

Use Electronic Commerce Endorsement CP 04 30.

C. Rules

1. Causes Of Loss

Endorsement CP 04 30 (Section III) provides covered causes of loss as a modification to the Causes Of Loss - Special Form CP 10 30. Therefore, Endorsement CP 04 30 may be used with Special Form policies or policies under which the Special Form is added and made applicable to the Electronic Commerce Endorsement.

2. Schedule

Enter the following information in the Schedule of Endorsement CP 04 30.

a. Enter a single Limit of Insurance for Electronic Commerce Coverage. This Limit is an annual aggregate limit which applies to the total of all losses from Section I and Section II.

b. Enter a dollar deductible for Section I coverage.

c. Indicate whether the Anti-Virus Waiver applies. There is no coverage for loss caused by a computer virus unless the computer system is equipped with anti-virus or virus-scanning software or the Anti-Virus Waiver is indicated in the Schedule as applicable.

3. Coinsurance

The Coinsurance Condition does not apply.

4. Coverage Territory

If a virus or similar incident originates outside the policy's Coverage Territory (United States, its territories and possessions, Puerto Rico, Canada), there is coverage under the Electronic Commerce Endorsement, subject to the following limitations:

a. With respect to Section I coverage, data is covered only if it originates and resides in a computer system located in the policy's Coverage Territory.

b. With respect to Section II coverage, coverage does not apply to business income or extra expense from outside the Coverage Territory, generated by or pertaining to the e-commerce activity of the business covered under the Electronic Commerce Endorsement.

D. Rating


78. - 79. RESERVED FOR FUTURE USE

SECTION VII-RATING PLANS

SECTION VII-RATING PLANS

80. INDIVIDUAL RISK PREMIUM MODIFICATION PLAN AND MULTIPLE LOCATION PREMIUM AND DISPERSION CREDIT PLAN

Refer to company.

81. DEDUCTIBLE INSURANCE PLAN

The following is added to Paragraph B.:

This Plan may not be used to write a Windstorm or Hail fixed dollar deductible that exceeds 10% (for residential risks, including condominium and cooperative association risks) of the total limit of insurance for property damage coverage on such risk, unless one of the following applies:

If the risk was covered on August 24, 1992, under a policy having a deductible higher than 10% of the policy limits, then a policy covering such risk may include a deductible no higher than the deductible in effect on August 24, 1992; or

A higher deductible may be selected, provided such deductible is the same as or similar to a deductible program lawfully in effect on June 14, 1995.

For all residential risks, the insurer must offer the policyholder a deductible in the amount of 3% of the insured values, in accordance with Rule 82.A.1.b. If such offer is accepted, then the Windstorm or Hail fixed dollar deductible may not exceed 3% of the total limit of insurance for property damage.

Paragraph D. is replaced by the following:

D. Forms

1. All Risks

Use Florida - Multiple Deductible Form (Fixed Dollar Deductibles) CP 03 22 for scheduling different deductibles for each location. Form CP 03 22 can also be used to schedule different deductibles for the Windstorm or Hail, or Theft causes of loss at each location. Do not schedule a Windstorm or Hail deductible for property to which a Hurricane Percentage Deductible applies. In accordance with Rule 82. and the endorsement for the Hurricane Percentage Deductible, a windstorm which is not declared to be a hurricane is subject to the deductible that applies to fire, with respect to property to which a hurricane deductible applies. For another (but mutually exclusive) option for residential risks, refer to Paragraph D.2.

2. Residential Risks

a. Use Florida - Multiple Fixed Dollar Deductible Form (Residential Risks) CP 03 24 for scheduling different deductibles for each location. Form CP 03 24 can also be used to schedule different deductibles for the Windstorm or Hail, or Theft causes of loss at each location. The Windstorm Or Hail deductible is subject to a calendar year application. Refer to Rule 82. for an explanation of calendar year application. Do not schedule a Windstorm Or Hail deductible for property to which a Hurricane Percentage Deductible applies.

b. When Form CP 03 24 is used to write a Windstorm or Hail deductible, the insurer may also attach one of the following endorsements:

(1) Florida Special Duties After Loss - Report Of Loss Below The Hurricane/Windstorm Deductible (Residential Risks) Endorsement IL 03 01

This endorsement requires the Named Insured to report loss or damage resulting from windstorm that falls below the Windstorm or Hail deductible to the Company so that the Company can apply the amount(s) of such loss or damage in calculating the remainder of the Windstorm or Hail deductible for a calendar year in which there is more than one windstorm; or

(2) Florida Special Duties After Loss - Maintenance Of Receipts And Other Records Of Loss Below The Hurricane/Windstorm Deductible (Residential Risks) Endorsement IL 03 02

This endorsement requires the Named Insured to maintain receipts and any other records of loss or damage, resulting from windstorm, that falls below the Windstorm or Hail deductible so that the Company can apply the amount(s) of such loss or damage in calculating the remainder of the Windstorm or Hail deductible for a calendar year in which there is more than one windstorm.

Refer to Rule 82.B.2. for a list of classifications that qualify as residential risks.

Paragraphs E.2. and E.4. are replaced by the following:



a. Multiply the rates contemplating a base deductible of not more than $500 by the factors in Table 81.E.4.a. Factors For Deductible Coverage ( CP 03 22) or Table 81.E.4.b. Factors For Deductible Coverage ( CP 03 24).

b. Do not apply the factors to the rates for any form contemplating a base deductible equal to or exceeding the amount of the deductible desired under this Plan.

c. When the base deductible amount exceeds $500, unless otherwise provided, increase the deductible factor from Table 81.E.4.a. Factors For Deductible Coverage ( CP 03 22) or Table 81.E.4.b. Factors For Deductible Coverage ( CP 03 24) by one half of the difference between 1.00 and the factor.

4. Factors For Deductible Coverage

a. When Endorsement CP 03 22 (deductible applies to each windstorm) is used, refer to Table 81.E.4.a.

Factors For Deductible Coverage

Deductible Credit Factors

Total Amount Of Insurance At Each Location

Deductible

Basic Group I

Basic Group II

Other Causes Of Loss

More than $250,000 $1,000 .99 .98 .96 100,001 - 250,000 .97 .97 .93 50,001 - 100,000 .96 .95 .92 50,000 or Less .94 .94 .89



Deductible

Basic Group I

Basic Group II


More than $500,000 $2,500 .96 .95 .89 250,001 - 500,000 .93 .91 .82 100,001 - 250,000 .90 .88 .79 100,000 or Less .84 .83 .71 More than $1,000,000 $5,000 .95 .93 .84 500,001 - 1,000,000 .90 .86 .74 250,001 - 500,000 .87 .83 .69 250,000 or Less .79 .75 .59 More than $5,000,000 $10,000 .94 .92 .81 1,000,001 - 5,000,000 .89 .84 .69 500,001 - 1,000,000 .83 .77 .60 250,001 - 500,000 .78 .72 .54 250,000 or Less .67 .61 .44 More than $10,000,000 $25,000 .93 .88 .71 5,000,001 - 10,000,000 .87 .80 .60 1,000,001 - 5,000,000 .81 .72 .52 500,001 - 1,000,000 .71 .62 .42 500,000 or Less .60 .49 .32 More than $10,000,000 $50,000 .90 .81 .60 5,500,001 - 10,000,000 .81 .71 .48 3,500,001 - 5,500,000 .77 .66 .44 1,000,001 - 3,500,000 .72 .60 .39 1,000,000 or Less .53 .43 .27 More than $10,000,000 $75,000 .87 .77 .54 5,500,001 - 10,000,000 .77 .65 .42 3,500,001 - 5,500,000 .73 .60 .38 1,000,001 - 3,500,000 .66 .53 .33 1,000,000 or Less .50 .38 .25

Table 81.E.4.a. Factors For Deductible Coverage ( CP 03 22)

b. When Endorsement CP 03 24 (deductible applies on a calendar-year basis) is used, refer to Table 81.E.4.b.

Factors For Deductible Coverage



Deductible

Basic Group I

Basic Group II


More than $250,000 $1,000 .99 .981 .96 100,001 - 250,000 .97 .971 .93 50,001 - 100,000 .96 .951 .92 50,000 or Less .94 .941 .89 More than $500,000 $2,500 .96 .951 .89 250,001 - 500,000 .93 .911 .82 100,001 - 250,000 .90 .881 .79 100,000 or Less .84 .831 .71 More than $1,000,000 $5,000 .95 .931 .84 500,001 - 1,000,000 .90 .861 .74 250,001 - 500,000 .87 .831 .69 250,000 or Less .79 .751 .59 More than $5,000,000 $10,000 .94 .921 .81 1,000,001 - 5,000,000 .89 .841 .69 500,001 - 1,000,000 .83 .771 .60 250,001 - 500,000 .78 .721 .54 250,000 or Less .67 .611 .44 More than $10,000,000 $25,000 .93 .881 .71 5,000,001 - 10,000,000 .87 .801 .60 1,000,001 - 5,000,000 .81 .721 .52 500,001 - 1,000,000 .71 .621 .42 500,000 or Less .60 .491 .32 More than $10,000,000 $50,000 .90 .811 .60 5,500,001 - 10,000,000 .81 .711 .48 3,500,001 - 5,500,000 .77 .661 .44 1,000,001 - 3,500,000 .72 .601 .39 1,000,000 or Less .53 .431 .27 More than $10,000,000 $75,000 .87 .771 .54 5,500,001 - 10,000,000 .77 .651 .42 3,500,001 - 5,500,000 .73 .601 .38 1,000,001 - 3,500,000 .66 .531 .33 1,000,000 or Less .50 .381 .25

Table 81.E.4.b. Factors For Deductible Coverage ( CP 03 24)

81. DEDUCTIBLE INSURANCE PLAN

A. Description Of Plan

This Plan provides a method for writing direct property damage coverages with higher deductibles ($1,000 minimum - $75,000 maximum) on eligible covered property.

B. Ineligibility

1. Ineligible Properties

a. Property rated under the Rating Plan For Highly Protected Or Superior Risks.

b. Classes of property not eligible for rating under this Plan may be written in conjunction with eligible covered property, provided:

(1) The rate factors under this Plan are not applied to the rates for ineligible property; and

(2) The Declarations clearly states to which property the deductible applies.

2. Ineligible Coverage Forms

a. Leasehold Interest

b. Business Income

c. Extra Expense

d. Legal Liability

e. Mortgageholders Errors and Omissions

3. Ineligible Cause Of Loss

Earthquake.

C. Rules

1. The deductible amounts under this Plan are fixed dollar amount deductibles applying on an occurrence basis to all eligible covered property.

(For Windstorm or Hail percentage deductibles, refer to Rule 82.)

2. Different deductible amounts may be established for each location. At a location all covered property must be written using the same dollar amount deductible, except as provided in Paragraph 4.

3. If some property at a location is written under a blanket limit of insurance and other property at the same location is written under a specific limit of insurance, all property at that location will be subject to the same deductible, except as provided in Paragraph 4.

4. Different deductible amounts may be established for either the Windstorm or Hail, or Theft causes of loss at each location. If a separate deductible amount is chosen, all covered property at that location must be written using the same deductible amount for that cause of loss.

5. If different deductible amounts apply and loss at two or more locations results from a single occurrence, only the largest deductible (applicable to one of the damaged locations) should be applied to the loss.

D. Forms

Use Multiple Deductible Form CP 03 20 for scheduling different fixed dollar amount deductibles for each location. Form CP 03 20 can also be used to schedule different fixed dollar amount deductibles for the Windstorm or Hail, or Theft causes of loss at each location.


1. Deductible Factor Determination

Determine the total amount of insurance for each location as follows and select the deductible rate factor from Table 81.E.4. Factors For Deductible Coverage in the state exceptions.

a. Specific Insurance

Determine the total amount of insurance at each location by adding the limits of insurance for all covered property at that location. If a different deductible applies to either Windstorm or Hail, or Theft, only the limit of insurance for property covered by that cause of loss should be used in determining the deductible factor for that cause of loss.

If a separate deductible applies to the Windstorm or Hail cause of loss, apply the deductible factor associated with the windstorm or hail deductible amount to the Group II rate. No further modification should be made to the Group II rate for deductible purposes.

If a separate deductible applies to the Theft cause of loss:

(1) For Buildings and Apartment and Condominium Contents, apply the deductible factor associated with the Theft deductible amount to the Including Theft rate. No further modifications should be made to the Including Theft rate for deductible purposes.

(2) For Office Contents and All Other Personal Property, apply the deductible factor associated with the Theft deductible amount to the Theft increment. The personal property

(excluding theft) rate should be modified by the deductible factor associated with the deductible amount applicable to the remaining causes of loss.


Determine the sum of the 100% values for all covered property at each location. Deductible factors must then be applied to the 80% coinsurance rate for covered property prior to calculating the blanket average rate.

c. Combination Of Specific And Blanket Insurance

If a specific limit of insurance and a blanket limit of insurance apply to different covered property at the same location, determine the sum of the specific limits of insurance and the 100% values for blanket property at that location. Use this amount to determine the applicable deductible factor.

d. Specific Rates

Use the limit of insurance (plus any specific insurance) to be reported when Value Reporting Form CP 13 10 is used with specific rates applicable to each location.

e. Multiple Location Average Rates

Use the gross average value without deducting any specific insurance for Form CP 13 10 when using multiple location average rates.


a. Multiply the rates contemplating a mandatory deductible of not more than $500 by the factors shown in the table in the state exceptions.

b. Do not apply the factors to the rates for any form contemplating a mandatory deductible equal to or exceeding the amount of the deductible desired under this Plan.

c. When the mandatory deductible amount exceeds $500, unless otherwise provided, increase the deductible factor from the table in the state exceptions by one half of the difference between 1.00 and the factor.

3. Rating Examples

Refer to Rating Examples Appendix in the state exceptions.

4. Factors For Deductible Coverage

Refer to the state exceptions for the factors for deductible coverage.

82. WINDSTORM OR HAIL PERCENTAGE DEDUCTIBLES

Paragraphs A.1., A.2. and A.3. are replaced by the following:

A. Description

1. Percentage Deductibles


For risks other than residential risks, the following deductibles may be used for the Windstorm Or Hail cause of loss:

(1) 1%

(2) 2%

(3) 5%

b. Hurricane

The minimum deductible for hurricane coverage on residential risks is $500. In selecting a percentage deductible from among the following options, assure that the total dollar amount of the deductible is not below $500.

(1) For residential risks including condominium and cooperative associations, the following deductibles may be used for the Hurricane cause of loss:

(a) 1%

(b) 2%

(c) 3%

(d) 5% or 10%, provided that the 3% deductible is offered to the policyholder as an alternative. Refer to Paragraph (2) of this rule.

Paragraph (1) is subject to the exception provided in Paragraph (4).

(2) The offer referred to in Paragraph (1)(d) of this rule must be made in writing on a form adopted or approved by the Florida Department of Insurance. The offer must be repeated at each renewal of the policy.

(3) If a residential risk was covered on August 24, 1992 under a policy having a Windstorm or Hail or Hurricane deductible in excess of 10% of the policy limits, or if a Windstorm or Hail or Hurricane deductible program in excess of 10% was lawfully in effect on June 14, 1995, then such higher deductible may be used.

(4) The Hurricane deductible applies only to loss or damage caused by hurricane. Loss or damage caused by a windstorm which is not declared to be a hurricane is subject to the deductible that applies to fire.


The dollar amount of the deductible will be equal to 1%, 2%, 3%, 5% or 10% of the Limit(s) of Insurance applicable to the property that has sustained loss or damage.


The dollar amount of the deductible will be equal to 1%, 2%, 3%, 5% or 10% of the value(s) of the property that has sustained loss or damage. The value(s) to be used are those shown in the most recent Statement of Values on file with the company.

Paragraph B. is replaced by the following:

B. Form

1. Use Windstorm Or Hail Percentage Deductible Endorsement CP 03 21 unless Paragraph 2. applies. Endorsement CP 03 21 provides 1%, 2% and 5% deductible options.

2. Use one of the following endorsements for providing a 1%, 2%, 3%, 5% or 10% hurricane deductible on residential properties:

a. Florida Calendar Year Hurricane Percentage Deductible (Residential Risks) Endorsement CP 03 23. Refer to Paragraph B.3. for additional information on Endorsement CP 03 23.

b. Florida Hurricane Percentage Deductible - Each Hurricane (Residential Risks) Endorsement CP 03 27.

Residential properties are properties classified under the following CSP Codes:

0074 0078 0198 0321 0332 0343 0075 0079 0311 0322 0333 0076 0196 0312 0323 0341 0077 0197 0313 0331 0342

3. The following provisions apply under Endorsement CP 03 23:

The Hurricane deductible(s) is calculated anew in each calendar year. If the policy period does not coincide with the calendar year, then a separate Hurricane deductible(s) will apply to loss or damage that occurs during each calendar year in which the policy is in force. For example, if the policy period is from July 1 of calendar year 1 to June 30 of calendar year 2, a separate Hurricane deductible(s) applies to loss or damage occurring from July 1 to December 31 of calendar year 1 and to loss or damage occurring from January 1 to June 30 of calendar year 2.

a. When a hurricane results in loss or damage that exhausts the Hurricane deductible, then that deductible will not apply to loss or damage from a subsequent hurricane(s) in the same calendar year. In such case, the deductible that applies to fire will apply to loss or damage from each subsequent hurricane in that calendar year.

b. When a hurricane(s) results in loss or damage that does not exhaust the Hurricane deductible, then the deductible applicable to a subsequent hurricane(s) in the same calendar year will be the deductible that applies to fire or the remaining amount of the Hurricane deductible, whichever is greater. In this situation, the remaining amount of the Hurricane deductible is determined by subtracting the amount(s) of the aforementioned loss or damage from the Hurricane deductible.

c. When the deductible that applies to fire applies in accordance with Paragraph a. or b., that deductible is applied to the total of all loss or damage sustained in one hurricane. It does not apply separately to each item of insurance.

d. When Florida Calendar Year Hurricane Percentage Deductible (Residential Risks) Endorsement CP 03 23 is used, the insurer may also attach one of the following endorsements:

(1) Florida Special Duties After Loss - Report Of Loss Below The Hurricane/Windstorm Deductible (Residential Risks) IL 03 01

This endorsement requires the Named Insured to report loss or damage resulting from a hurricane that falls below the Hurricane deductible to the Company so that the Company can apply the amount(s) of such loss or damage in calculating the remainder of the Hurricane deductible for a calendar year in which there is more than one hurricane; or

(2) Florida Special Duties After Loss - Maintenance Of Receipts And Other Records Of Loss Below The Hurricane/Windstorm Deductible (Residential Risks) IL 03 02

This endorsement requires the Named Insured to maintain receipts and any other records of loss or damage, resulting from a hurricane, that falls below the Hurricane deductible so that the Company can apply the amount(s) of such loss or damage in calculating the remainder of the Hurricane deductible for a calendar year in which there is more than one hurricane.

e. If an item of insurance is insured under more than one policy issued by the Company or another insurer in the Company's insurer group for the same policy period and different Hurricane deductibles apply to the same item of insurance under such policies, then the Hurricane deductible for that item of insurance shall be the highest amount stated in any one of the policies.

f. When a renewal policy or replacement policy issued by the same Company or another insurer in the Company's insurer group takes effect on a date other than January 1 of a calendar year, the following provisions apply:

(1) If the renewal or replacement policy provides a lower Hurricane deductible than the prior policy and the Named Insured already incurred loss or damage from a hurricane that occurred in that calendar year, the lower Hurricane deductible will not take effect until January 1 of the following calendar year. In this event, the Company will so notify the Named Insured in writing at the time the Company offers the lower Hurricane deductible to the Named Insured.

(2) If the renewal or replacement policy provides a higher Hurricane deductible than the prior policy, the higher Hurricane deductible will take effect on the effective date of the renewal or replacement policy. However, if hurricane loss or damage was sustained earlier in the calendar year in which the higher Hurricane deductible applies, the difference between the higher and lower Hurricane deductible will be figured into the remainder of the Hurricane deductible for a subsequent hurricane that occurs in that calendar year.

Paragraph D. is replaced by the following:


1. Windstorm Or Hail Deductible

Multiply the Group II rate by the appropriate factor from Table 82.D.1. Windstorm Or Hail Rate Modification Factors.

Windstorm Or Hail Rate Modification Factors

Windstorm Or Hail Deductible

Amount Of Insurance At Each Location

Factor

$ 2,500,001 and Over .68 1,000,001 - 2,500,000 .77 1% 250,001 - 1,000,000 .84 100,001 - 250,000 .93 50,001 - 100,000 .98

Windstorm Or Hail Deductible


Factor

$ 2,500,001 and Over .59 1,000,001 - 2,500,000 .67 2% 250,001 - 1,000,000 .75 100,001 - 250,000 .86 25,001 - 100,000 .94 $ 2,500,001 and Over .47 1,000,001 - 2,500,000 .54 5% 250,001 - 1,000,000 .61 100,001 - 250,000 .72 10,001 - 100,000 .84

Table 82.D.1. Windstorm Or Hail Rate Modification Factors

No further modification should be made to the Group II rate for deductible purposes, regardless of any deductible applicable to Group II causes of loss other than Windstorm or Hail.

2. Hurricane Deductible

a. When Endorsement CP 03 27 is used (deductible applies to each hurricane), multiply the Group II rate by the appropriate factor from Table 82.D.2.a. Hurricane Rate Modification Factors. Refer to Rule 70.E.2.d.(5) in the state rates for territory definitions.

Hurricane Rate Modification Factors

Hurri- cane Deduct- ible


In- land Terri-tory

All Other Terri- tories

$ 2,500,001 and Over .89 .70 1,000,001 - 2,500,000 .92 .79 1% 250,001 - 1,000,000 .94 .85 100,001 - 250,000 .97 .93 50,001 - 100,000 .99 .98 $ 2,500,001 and Over .85 .62 1,000,001 - 2,500,000 .88 .70



In- land Terri-tory


2% 250,001 - 1,000,000 .91 .77 100,001 - 250,000 .95 .87 25,001 - 100,000 .98 .94 $ 2,500,001 and Over .83 .56 1,000,001 - 2,500,000 .86 .64 3% 250,001 - 1,000,000 .89 .71 100,001 - 250,000 .93 .81 16,667 - 100,000 .96 .91 $ 2,500,001 and Over .81 .50 1,000,001 - 2,500,000 .83 .57 5% 250,001 - 1,000,000 .86 .63 100,001 - 250,000 .90 .74 10,001 - 100,000 .94 .85 $ 2,500,001 and Over .78 .44 1,000,001 - 2,500,000 .80 .48 10% 250,001 - 1,000,000 .82 .53 100,001 - 250,000 .86 .62 5,001 - 100,000 .90 .74

Table 82.D.2.a. Hurricane Rate Modification Factors

No further modification should be made to the Group II rate for deductible purposes, regardless of any deductible applicable to Group II causes of loss other than Hurricane.

b. When Endorsement CP 03 23 is used (deductible applies on a calendar-year basis), multiply the Basic Group II rate by the appropriate factor from Table 82.D.2.b. Hurricane Alternate Rate Modification Factors. Refer to Rule 70.E.2.d.(5) in the state rates for territory definitions.

Hurricane Alternate Rate Modification Factors



In- land Terri-tory


$ 2,500,001 and Over .891 .702 1,000,001 - 2,500,000 .921 .792 1% 250,001 - 1,000,000 .941 .852 100,001 - 250,000 .971 .932 50,001 - 100,000 .991 .982 $ 2,500,001 and Over .851 .622 1,000,001 - 2,500,000 .881 .702 2% 250,001 - 1,000,000 .911 .772 100,001 - 250,000 .951 .872 25,001 - 100,000 .981 .942 $ 2,500,001 and Over .831 .562 1,000,001 - 2,500,000 .861 .642 3% 250,001 - 1,000,000 .891 .712 100,001 - 250,000 .931 .812 16,667 - 100,000 .961 .912 $ 2,500,001 and Over .811 .502 1,000,001 - 2,500,000 .831 .572 5% 250,001 - 1,000,000 .861 .632 100,001 - 250,000 .901 .742 10,001 - 100,000 .941 .852 $ 2,500,001 and Over .781 .442 1,000,001 - 2,500,000 .801 .482 10% 250,001 - 1,000,000 .821 .532 100,001 - 250,000 .861 .622 5,001 - 100,000 .901 .742

Table 82.D.2.b. Hurricane Alternate Rate Modification Factors

82. WINDSTORM OR HAIL PERCENTAGE DEDUCTIBLES

A. Description

1. Percentage Deductibles

The following deductibles may be used for the Windstorm or Hail cause of loss:

a. 1% Deductible

b. 2% Deductible

c. 5% Deductible


The dollar amount of the deductible will be equal to 1%, 2% or 5% of the Limit(s) of Insurance applicable to the property that has sustained loss or damage.


The dollar amount of the deductible will be equal to 1%, 2% or 5% of the value(s) of the property that has sustained loss or damage. The value(s) to be used are those shown in the most recent Statement of Values on file with the company.

4. Value Reporting Forms And Builders Risk Insurance

For value reporting forms, the calculation of the deductible amount is based on reported values. There are variations for the situation where loss occurs prior to the first report, and for reports of value which show less than full values. If coverage is written blanket under a reporting form, the basis of the calculation is value at time of loss.

For builders risk insurance, the calculation of the deductible amount is based on value at time of loss.

B. Form

Use Windstorm Or Hail Percentage Deductible Form CP 03 21.

C. Rules

1. The Windstorm or Hail percentage deductibles apply whenever there is an occurrence of Windstorm or Hail.

2. The Windstorm or Hail deductible is calculated separately for, and applies separately to:

a. Each building, if two or more buildings sustain loss or damage;

b. The building and to personal property in that building, if both sustain loss or damage;

c. Personal property at each building, if personal property at two or more buildings sustains loss or damage;

d. Personal property in the open.

3. The Statement of Values for a blanket policy should contain sufficient detail - value of each building, value of personal property at each building, value of personal property in the open - to complement the procedure set forth in the Windstorm or Hail Percentage Deductible endorsement.

4. Percentage deductibles may vary by location. At a location all covered property must be written using the same percentage deductible.

5. If some property at a location is written under a blanket limit of insurance and other property at the same location is written under a specific limit of insurance, all covered property at that location must be written using the same percentage deductible.

6. When property is covered under the Coverage Extension for Newly Acquired or Constructed Property: In determining the amount, if any, that we will pay for loss or damage, we will deduct an amount equal to a percentage of the value(s) of the property at time of loss. The applicable percentage for Newly Acquired or Constructed Property is the highest percentage shown in the Schedule for any described premises.


Multiply the Group II rate by the appropriate factor shown in the state exceptions.

No further modification should be made to the Group II rate for deductible purposes, regardless of any deductible applicable to Group II causes of loss other than Windstorm or Hail.

E. Ineligibility

1. Ineligible Properties

a. Property rated under the Rating Plan For Highly Protected Or Superior Risks.

b. Classes of property not eligible for rating under the Windstorm or Hail Percentage Deductible Plan may be written in conjunction with eligible covered property, provided:

(1) The rate factors under the Windstorm or Hail Percentage Deductible Plan are not applied to the rates for ineligible property; and

(2) The Declarations or Schedule clearly states to which property the deductible applies.

2. Ineligible Coverage Forms

a. Leasehold Interest

b. Business Income

c. Extra Expense

d. Legal Liability

e. Mortgageholders Errors and Omissions

83. MULTIPLE RESIDENTIAL PROPERTIES - SPECIAL CREDITS (Class Code 0300)

A. Description Of Plan

Eligible completed multiple residential properties (including cooperatives and condominiums) may be written at rates or premiums factored according to this rule. Apartment-Mercantiles may be acceptable as apartment buildings for credit under this rule.

B. Eligibility

The properties must comply with all of the following requirements:

1. The properties must consist of five or more separately rated apartment or dwelling buildings, with each building containing one or more apartment units.

2. The total number of apartment units in the property must not be less than 50.

3. All apartment buildings must be located on a single premises, except for intervening streets or rights of way.

4. All apartment buildings must be:

a. Owned by the same insured(s) (either public or private); and

b. Under one management.

5. All apartment buildings must be structurally sound, with definite provision for repairs and upkeep, and with maintenance on the premises of a staff sufficient to provide continuing and satisfactory supervision and maintenance of the property.

6. All eligible buildings must be insured. Apply to ISO for verification of eligibility for credit(s) under this rule. If eligible, the credit(s) will be provided in a specific property information quote.

C. Ineligibility

"Seasonal" or "Temporary" housing properties and housing properties at mining, lumber, or manufacturing operations are not eligible under this rule.


1. Multiply the rates (except earthquake) for all eligible buildings and structures in the property by the following factors. Multiply the factors consecutively if more than one applies.

a. For single supervision, maintenance and control .70

b. For separate heating, when the building or structure is entirely heated by a heating plant located in a building which is separately rated from the building or structure receiving the credit .75

2. Do not apply the preceding factors to the rates for Earthquake.

3. Apply the factors in Paragraph 1. to the rates or premiums of auxiliary buildings such as garages which are provided for the habitational occupants only, and tool sheds or boiler houses which are used in conjunction with an eligible property. Do not apply factors to rates or premiums of stores or other mercantile buildings (other than Apartment-Mercantiles) or to merchandise, stock, or contents in buildings.

84. OIL DISTRIBUTING STATIONS CLASS RATES (Class Codes 1751 and 1752)


If eligible for class rating in accordance with these rules, coverage may be extended to apply to all real and personal property of Oil Distributing Stations which distribute petroleum products including liquefied petroleum gas (with or without cylinder charging). Incidental automobile filling stations on the same premises with no repair or vehicle servicing may be included.

B. Eligibility

An insured's interest, whether owner, operator or owner and operator, in an oil distributing station, when occupied exclusively as an oil distributing station, may be covered at the special oil distributing stations class rates.

C. Ineligibility

1. Any station:

a. At which manufacturing or processing is done by power machinery (except pumping operations).

b. At which mixing, compounding, dehydrating or treating of oils or greases is done in heated receptacles (other than tanks with steam coils designed and used exclusively for maintaining the viscosity of oils or greases) in any building or attached platforms.

c. On the premises of an oil refinery.

2. Property rated under the:

a. Petroleum Properties Schedule;

b. Petrochemical Plants Schedule.

D. Rules

1. Coverage

Coverage for oil distributing stations is to be written blanket on real and personal property (except land) either including or excluding stock.

2. Coinsurance


3. Form Amendments

Amend the Additional Covered Property Endorsement CP 14 10 and the Additional Property Not Covered Endorsement CP 14 20 as shown:

a. Endorsement CP 14 10

Amend Endorsement CP 14 10 by adding the following: Insert the appropriate paragraph reference from the applicable coverage form when completing Endorsement CP 14 10.

Underground pipes, including underground tanks and connections. But underground flues and drains are not covered.

b. Endorsement CP 14 20

Amend Endorsement CP 14 20 as follows:

(1) Add the following properties when coverage includes stock:

(a) Buildings or their contents in which any cooking is done, including restaurants and lunchrooms;

(b) Buildings or their contents used to repair tires or electric batteries except for buildings or their contents used for patching of tires and tubes;

(c) Buildings or their contents used to store or repair motor vehicles you do not own except for buildings or their contents used for occasional incidental repairs;

(d) Buildings used principally for storage, sale or repairing of appliances or heating devices or their parts.

(2) In addition to the property described in Paragraph (1) add the following property when coverage excludes stock:

Petroleum products and other merchandise, including the contents of above or below ground tanks.

4. Reporting Forms

Reporting forms may be written to cover only on crude petroleum and its products in or at eligible risks provided such reporting forms follow the Value Reporting Form rules (Rule 36.) or rules contained in the Petroleum Properties Schedule.

E. Rates

1. Causes Of Loss - Basic Form CP 10 10

a. Group I Rates

Refer to Rule 85.

b. Group II Rates

Use the rate for Symbol AB shown in the state rates.

2. Causes Of Loss - Broad Form CP 10 20

Refer to Rule 71. for rates to be used to determine the additional premium.

3. Causes Of Loss - Special Form CP 10 30

Refer to Rule 72. for rates to be used to determine the additional premium.

SECTION VIII-BASIC GROUP I CLASS RATES

SECTION VIII-BASIC GROUP I CLASS RATES

85. BASIC GROUP I CLASS RATES

The following is added to Paragraph L.:

L. Special Class Rates

4. The loss costs for Protection Class 9, in Table 85.L.3. of the multistate rates, also apply to Protection Class 8B.

The following is added to Rule 85.:

M. Protection Class And Territorial Multipliers

The protection class multipliers in Table 85.M.1.b. Protection Class Multipliers and the territorial multipliers listed in the state rates are to be applied to Basic Group I rates for commercial properties eligible for class rating.

1. Rating Procedures

a. Select the appropriate building and contents loss cost from the Basic Group I loss costs in the state rates based upon the following items:

(1) CSP Class Code

(2) Construction

b. Select the appropriate Protection Class and apply the protection class multiplier from Table 85.M.1.b. Protection Class Multipliers to the class rate prior to any coinsurance or flat rate adjustment.

Protection Class

Frame, Joisted Masonry, Non- Combustible

Masonry Non- Combustible, Modified Fire Resistive, Fire Resistive

1 .88 .90 2 .92 .94 3 .96 .97 4 .98 .98 5 1.00 1.00 6 1.06 1.05 7 1.18 1.14 8 1.30 1.24 8B 1.42 1.34 9 1.42 1.34 10 1.72 1.58

Table 85.M.1.b. Protection Class Multipliers

c. For CSP Class Codes 1751 and 1752 and for non-combustible yard property in CSP Class Codes 1400, 1650, 1700, use a protection class multiplier of 1.000 for all protection classes.

d. Apply the territorial multiplier from the state rates to the class rate prior to any coinsurance or flat rate adjustment and after the application of the protection class multiplier.

e. Apply city territorial multipliers only to the properties located within the city's corporate limits.

2. Rating Examples

Refer to the Rating Examples Appendix in the state exceptions for an example illustrating the application of the protection class and territorial multipliers.

N. Transition Rule For Changes In Class Rating Eligibility - Light Manufacturing Classes And Hotels/Motels

1. This transition rule is applicable to the first and second renewals of coverage on property that was previously specifically rated and is now class rated (or vice versa) using the following classifications, provided the occupancy, construction and location are unchanged:

0533 Baking on premises, no delivery to outlets

0745 Motels and hotels without cooking - Up to 10 units

0746 Motels and hotels without cooking - 11-30 units

0747 Motels and hotels without cooking - Over 30 units

2200 Baking on premises, delivery to outlets

2350 Beverages excluding alcoholic beverages

2459 Distilleries and wineries 2800 Textile mill products 3409 Leather and leather products 4809 Printing

2. The Basic Group I rate for the first year of rating under the new eligibility rules shall not be more than 25% higher or 20% lower than the rate which applied at the last rating or re-rating of the property.

3. The Basic Group I rate for the second year of rating under the new eligibility rules shall not be more than 25% higher or 20% lower than the initial rate developed under Paragraph 2. of this transition rule (or the rate applicable at the end of the first year if the property was re-rated during that year).

4. The percentages shown in Paragraphs 2. and 3. of this rule apply in addition to any rate level change implemented by the Company in accordance with state regulatory procedures. Thus, for example, if a rate level change of +10% (1.1) applies, the percentages shown in this transition rule are modified by that rate level change (1.1 x 1.25 = 1.375; 1.1 x .80 = .88).

5. Rate changes produced by changes in deductible level, coinsurance level and/or optional coverages are not subject to the capping procedure provided in Paragraphs 2. and 3. of this rule.

O. Transition Rule For Expansion Of Class Rating Eligibility And Classification Relativity Changes

1. This transition rule applies:

a. To the first and second renewals of coverage on property rated based on the Basic Group I loss costs introduced in Notice to Manualholders CF-FL-2001-LC-001. These loss costs reflect class relativity changes as well as expansion of class rate eligibility;

b. Only if the occupancy, construction and location of the risk are unchanged.

2. The Basic Group I rate for the first year of rating shall not be more than 25% higher or 20% lower than the rate which applied at the last rating or re-rating of the property.

3. The Basic Group I rate for the second year of rating shall not be more than 25% higher or 20% lower than the initial rate developed under Paragraph 2. of this transition rule (or the rate applicable at the end of the first year if the property was re-rated during that year).

4. The percentages shown in Paragraphs 2. and 3. of this rule apply in addition to any rate level change implemented by the Company in accordance with state regulatory procedures. Thus, for example, if a rate level change of +10% (1.1) applies, the percentages shown in this transition rule are modified by that rate level change (1.1 x 1.25 = 1.375; 1.1 x .80 = .88).

5. Rate changes produced by changes in deductible level, coinsurance level and/or optional coverages are not subject to the capping procedure provided in Paragraphs 2. and 3. of this rule.

85. BASIC GROUP I CLASS RATES

A. General

1. This rule provides Basic Group I rates for commercial properties eligible for class rating.

2. Insurance Services Office, Inc. (ISO) does not specifically rate properties eligible for class rates.

3. A listing of CSP Class Code descriptions can be found in the Commercial Fire And Allied Lines Division of the Commercial Statistical Plan.

B. Eligibility

The following buildings are eligible for Basic Group I Class Rates unless otherwise indicated:

1. Habitational

a. Construction

All construction types.

b. Total Floor Area

Unlimited square footage.

c. CSP Class Codes

0074 0196 0321 0341 0075 0197 0322 0342 0076 0198 0323 0343 0077 0311 0331 0078 0312 0332 0079 0313 0333

These classifications refer to dwellings (and appurtenant structures such as garages) written in conjunction with a commercial risk or written under a Commercial Package Policy; and include dwellings, apartments or condominium units owned by corporations and similar insureds who allow employees or others to occupy the dwellings without leasing or renting. The classifications also include time-sharing apartment or condominium units owned by corporations for use exclusively by their executives or other employees.

For Lessor's Contents, when the Causes Of Loss - Special Form (Including Theft) applies, use the Apartments And Condominiums Special Form contents rate developed in accordance with Rule 72.E.2.d.(1).

2. Hotels And Motels Without Restaurants

Hotels And Motels With Limited Cooking Restaurants

a. Up To 5,000 Square Feet


b. Over 5,000 Square Feet Up To 25,000 Square Feet

Frame, Joisted Masonry and Non-Combustible construction types.

Refer to Paragraph B.5. for provisions relating to determination of the total floor area.

c. CSP Class Codes

0742 0745 0743 0746 0744 0747

See Paragraph G. - Special Rules for eligibility information.

3. Mercantile, Non-Manufacturing And Warehouse





Refer to Paragraph 5. for provisions relating to determination of the total floor area.

c. CSP Class Codes

0511 0561 0582 0841 0913 0952 1220 0512 0562 0701 0843 0921 1000 1230 0520 0563 0702 0844 0922 1051 1400 0531 0564 0755 0845 0923 1052 1650 0532 0565 0756 0846 0931 1070 1700 0533 0566 0757 0851 0932 1150 1751 0534 0567 0831 0852 0933 1180 1752 0541 0570 0832 0900 0934 1211 0545 0580 0833 0911 0940 1212 0550 0581 0834 0912 0951 1213

See Paragraph G. - Special Rules for eligibility information and exceptions.

4. Manufacturing





Refer to Paragraph 5. for provisions relating to determination of the total floor area.

c. CSP Class Codes

2200 2800 2350 3409 2459 4809

5. Determination Of Total Floor Area

In determining the total floor area, the following criteria apply:

a. With respect to basements, sub-basements and mezzanines:

(1) Disregard the areas used for general service or maintenance of the building, such as heating and air conditioning equipment or janitorial supplies;

(2) Do not disregard areas that directly relate to business operations, such as storage or assembly areas and areas open to customers or the public.

b. With respect to mercantile, manufacturing, non-manufacturing and warehouse risks (as described in Paragraphs 3. and 4.) disregard areas occupied by apartments or residential condominium units, including vacant apartments or units.

C. Ineligibility

1. The following properties are ineligible for Basic Group I Class Rates:

a. Properties eligible for the Dwelling Policy Program are not eligible for Basic Group I Class Rates, unless the dwelling is:

(1) Written in conjunction with a commercial risk; or

(2) Written under a Commercial Package Policy.

b. Properties eligible for rating under:

(1) Division Four - Farm; or

(2) Paragraph L. Special Class Rates.

2. For apartment tenants' personal property, refer to the Dwelling Policy or Homeowners program.

3. Properties protected by automatic sprinklers, automatic fire detection systems or watchman service. Apply to ISO for specific rating. However, if ISO determines that the property does not meet minimum eligibility requirements for specific rating, class rates may apply.

4. Properties containing any of the following occupancies regardless of the percentage of area they represent:

a. Spray Painting

Auto body or collision shops with spray painting or other occupancies where the principal operation is spray painting.

b. Restaurants other than limited cooking restaurants as described in Paragraph G.10. (CSP Class Code 0542) and other occupancies with commercial cooking open to the general public, except such occupancies are permitted in Apartments/Condominiums with Mercantile (CSP Class Codes 0321, 0322, 0323, 0341, 0342, 0343) of Modified Fire Resistive and Fire Resistive construction. Do not consider use of snack warmers or other warming devices as cooking.

c. Agriculture product storage and processing (CSP Class Codes 1251, 1252, 1300, 1501, 1502, 1550, 1610).

d. Manufacturing occupancies where the applicable CSP Class Code is 2000 or greater, including auxiliary buildings on the same premises (except Class Codes 2200, 2350, 2459, 2800, 3409 and 4809 as qualified in Paragraph B.4.).

D. Construction Types

Classify buildings according to the construction definitions in Rule 15.

When a building is of mixed construction, determine the applicable construction type as follows but disregarding the wall and floor areas of the basement, or the area of the floor on grade for buildings that do not have a basement:

1. If 2/3 or more of the total wall area is of masonry or fire resistive materials, the Construction Type is:

a. Fire Resistive or Modified Fire Resistive when 2/3 or more of the total floor and roof area is of masonry or fire resistive materials.

b. Masonry Non-Combustible when 2/3 or more of the total floor and roof area is of non-combustible materials.

c. Joisted Masonry when more than 1/3 of the total floor and roof area is of combustible materials.

2. If 2/3 or more of the total wall area and 2/3 or more of the floor and roof area is of non-combustible materials, the applicable Construction Type is Non-Combustible.

3. If more than 1/3 of the total wall area is of combustible materials, the applicable Construction Type is Frame.

4. If none of the preceding items describe the building, apply to ISO for Construction Type giving construction details.

5. If a building exceeds 5,000 square feet and more than 1/3 of the building is of Masonry Non-Combustible, Modified Fire Resistive or Fire Resistive Construction Type and the Building CSP Class Code is not:

a. 0074 through 0343 (Habitational); or

b. 1150 (Builders' Risks)

apply to ISO for specific rating.

E. Building Class Code Selection

To determine the proper CSP Class Code the following steps should be taken:

1. Determine the CSP Class Code for each occupancy in the building using the Classification Table.

2. Determine the percentage of total building floor area for each different CSP Class Code in the building. Exclude building service and maintenance areas such as basement service areas from the total building area.

3. Use the following criteria to determine the CSP Class Code applicable to the building:

a. For Sole Occupancy buildings the CSP Class Code applicable to the building is the same as the CSP Class Code applicable to the occupancy.

b. For Multiple Occupancy buildings:

(1) In the case of equal areas, except as otherwise provided in the following paragraph, use the CSP Class Code which produces the highest rate.

(2) When 75% or more of the building is occupied by:

Habitational Properties (CSP Class Codes 0074 through 0079 and 0196 through 0198), or

Apartments or residential Condominiums,

the CSP Class Code applicable to the building is determined as follows:

(a) When the remaining area is devoted to Funeral Homes (CSP 0923), Offices (CSP 0701 or 0702) or Light Hazard Service Occupancies (CSP 0921), the CSP Class Code for the building is the predominant Habitational (CSP 0074 through 0079 and 0196 through 0198) Apartment (CSP 0311 through 0313) or Condominium (CSP 0331 through 0333) Code.

(b) When the remaining area is devoted to occupancies other than Funeral Homes, Offices or Light Hazard Service Occupancies and:

(i) The predominant class code is Habitational, such codes are not applicable and the CSP Class Code for the building is the code applicable to the largest remaining floor area. However, when the largest remaining floor area is occupied by two or more mercantile tenants (CSP Class Codes 0511 through 0580), use CSP Class Code 0581 or 0582. CSP Class Code 0582 is applicable when any tenant in a multiple occupancy mercantile building has a CSP Class Code of 0564.

In determining the CSP Class Code with the largest remaining floor area, the area of all mercantile tenants is to be combined.

(ii) The predominant occupancy is Apartments or residential Condominiums, the CSP Class Code for the building is the applicable Apartment - Mercantile code (CSP 0321 through 0323) or Condominium - Mercantile code (CSP 0341 through 0343).

(3) For buildings occupied solely by Apartment, residential Condominium and Habitational Occupancies, and no one of the foregoing occupies 75% or more of the building, the largest floor area CSP (Habitational) 0074 through 0079 and 0196 through 0198, (Apartment) 0311 through 0313 or (Condominium) 0331 through 0333 Code applies.

(4) When 75% or more of the building is occupied by Offices (CSP 0701 or 0702), the CSP Class Code applicable to the building is the largest floor area CSP 0701 or 0702 Code.

(5) For all other buildings:

(a) For buildings occupied solely by Apartment, residential Condominium, Habitational and Office Occupancies, with no one such occupancy more than 75% of the

building area, disregard the area occupied for Apartment/Condominium and Habitational purposes. The CSP Class Code applicable to the building is the largest floor area CSP 0701 or 0702 Code.

(b) When the building occupancy is other than in Paragraph (a), disregard the area associated with Habitational, Apartment, residential Condominium or Office occupancies. The CSP Class Code applicable to the building is the code applicable to the largest remaining floor area. However, when the largest remaining floor area is occupied by two or more mercantile tenants (CSP Class Codes 0511 through 0580), use CSP Class Code 0581 or 0582. CSP Class Code 0582 is applicable when any tenant in a multiple occupancy mercantile building has a CSP Class Code of 0564.

In determining the CSP Class Code with the largest remaining floor area, the area of all mercantile tenants is to be combined.

F. Class Rate Selection

Determine the appropriate building and contents Basic Group I rate from the Class Rates in the state rates.

1. Building Rates

Building rates are displayed for each CSP Class Code by Construction Type. When rates are not displayed by Protection Class, apply Protection Class Multipliers, shown in the state exceptions.

2. Contents Rates

a. Contents rates are displayed for each CSP Class Code by Construction Type. When rates are not displayed by Protection Class, apply Protection Class Multipliers, shown in the state exceptions.

b. For building with CSP Class Codes 0321, 0322, 0323, 0341, 0342, 0343, 0581, 0582, 0701 and 0702, contents rates appear in three groupings: A, B and C. The appropriate group is determined from the CSP Class Code in the Classification Table applicable to the tenant being rated as described in Table 85.F.2.b. CSP Class Codes:

Group CSP Class Codes A 0074 through 0343, 0511, 0701, 0702, 0745, 0746, 0747, 0851, 0852, 0900, 0921, 0923, 0931, 1000, 1052, 1070 B 0520, 0534, 0541, 0545, 0562, 0564,

0570,

Group CSP Class Codes 0580, 0742-0744, 0755, 0832, 0940,

0951, 1051, 1211 through 1752 C All other

Table 85.F.2.b. CSP Class Codes

c. For buildings with CSP Class Codes other than 0321, 0322, 0323, 0341, 0342, 0343, 0581, 0582, 0701, or 0702 only one group of contents rates is listed and is applicable to all occupancies in the building.

G. Special Rules

1. CSP Class Code 0580 (Greenhouses)

Greenhouses are eligible for class rating without floor area limitation. Classify glass in metal frame greenhouses as Non-Combustible construction. Classify all other greenhouses (including greenhouses with plastic windows in metal frame) as Frame Construction. Contents rates for greenhouses apply to all contents including plants and flowers, or to plants and flowers only. For contents excluding plants and flowers, the contents rate is the same as the building rate.

2. CSP Class Code 0845 (Camps)

Buildings of Frame, Joisted Masonry or Non-Combustible construction on the camp premises regardless of area are eligible for class rating. For tents refer to Paragraph L.

3. CSP Class Code 0932 (Auto Service Stations)

Contents rates may apply to underground fuel storage tanks, contents of such tanks, pumps, piping and connections to the tanks, and also to awnings, signs and metal smokestacks which are necessary and usual to the operation of an automobile service station.

4. CSP Class Code 1150 (Builders' Risks)

Refer to Rules 40. and 41. for rule and form information. All construction types without area limitation are eligible for class rating. Published rates are completed value rates.

5. CSP Class Code 1180 (Vacant Buildings)

Use rates for the CSP Class Code associated with the intended or previous occupancy. Add the increment shown in the Basic Group I table in the state rates, unless the Class Code of the previous or intended occupancy is 0580, 0742-0747, 0833, 0834, 0841, 0843, 0844, 0846, 0900, 0951, 0952, 1051 or 1052.

6. CSP Class Codes 1400 (Waste And Reclaimed Material), 1650 And 1700 (Building Supplies)

Building and Contents rates apply to enclosed sheds or buildings. The Yard Property rate applies to material stored in the open or open-sided sheds on the premises without area limitation. If materials in the Yard are non-combustible, use the Yard rates for Non-Combustible construction, otherwise use Yard rates for Frame construction.

7. CSP Class Codes 1751 And 1752 (Oil Distributing Stations)

Refer to Rule 84. for rule and form information. All construction types without area limitation are eligible for class rating.

8. Auxiliary And Subsidiary Buildings

Determine CSP Class Codes for auxiliary and subsidiary buildings (such as garages, tool sheds or boiler houses which are used in conjunction with and pertinent to an occupancy) as noted in the Classification Table.

9. Vaults Or Safes

For contents in vaults or safes with a fire resistance rating of:

a. One hour with non-combustible material stored such as jewelry or coins, or

b. Two hours with combustible material stored such as clothing or furs,

multiply the applicable contents rate by 0.50.

10. Limited Cooking Restaurants And Certain Other Occupancies With Limited Cooking

a. Definition

Limited cooking refers to restaurants and other cooking facilities, as listed in this rule, where foods are prepared cold or cooked using appliances which do not emit smoke or grease-laden vapors that require an exhaust system (for example, electric sandwich grills, toasters, warming ovens, roller warmers, infrared snack warmers, microwave ovens, domestic ranges, domestic ovens and pizza ovens).

Not permitted: grilling, open broiling, deep-fat frying, roasting, barbecuing, solid fuel cooking (for example, mesquite, charcoal or hardwood) or other processes capable of producing grease-laden vapors requiring an exhaust system.

b. CSP Class Codes And Eligibility Rules

(1) Code 0545 - Limited Cooking Restaurant

(2) Code 0534 - Food Products With Limited Cooking, Excluding Bakeries

(3) If the restaurant or cooking facility meets the definition of Limited Cooking, then the risk is eligible for class rating subject to any other limitations on eligibility:

Codes 0742, 0743, 0744 - Motels and Hotels With Restaurant

Code 0755 - Golf Clubs, Tennis Clubs and Similar Sports Facilities With Cooking

Code 0951 - Gambling Casino With Restaurant

H. Separation Of Buildings

Rate Buildings:

1. As one building when they communicate through unprotected openings.

2. Separately when separated by space.

3. Separately if divided by an 8-inch masonry or 6-inch reinforced concrete party wall without openings, provided that, if a roof is combustible or metal, the party wall pierces the roof. In addition, if the exterior walls are not masonry, the party wall must pierce the non-masonry walls.

Other combinations of masonry party wall conditions may be eligible for separate rating in accordance with General Rule 110. - Separate Classification of Buildings of the Specific Commercial Property Evaluation Schedule (SCOPES). Contact ISO for verification of eligibility for separate building rating for conditions other than those specified above.

I. Basement

Basement means a story of a building which is:

1. 50% or more below grade unless it is accessible at grade level on one or more sides, or

2. Less than 50% below grade and wholly enclosed by blank masonry walls.

J. Rating Information

The following policywriting and classification information is relevant to rating of class-rated risks:

1. Construction type.

2. Public protection class.

3. Description of occupancies in the building.

4. CSP class code number.

K. CSP Coding

1. Buildings

The applicable CSP Class Code is the same as the CSP Class Code determined in Paragraph E.

2. Contents

The applicable CSP Class Code is the Code applicable to the building.

L. Special Class Rates

1. Apply this item to all property in the open (CSP Class Code 1190) and to special property as defined except:

a. Property described in Paragraph B.

b. Piers, Wharves, Bridges (CSP Class Code 1200) except as specifically described.

c. Agriculture product storage including material in yards and tanks. (CSP Class Codes 1251, 1252, 1300, 1501, 1502, 1550, 1610).

2. The Basic Group II Symbol Column is used as provided in Rule 70.

3. See multistate rates.

End of Section.

Documents

© ISO Properties, Inc01 25 (see Rule 14. in these state exceptions) in place of the policy's Sinkhole Collapse coverage. Catastrophic Ground Cover Collapse provides coverage for direct