Minnesota Automobile Personal Lines Automobile Manual Rule Manual-MN.pdf · Toll Free: (800) 347.1961 Personal Lines and Farm Lines : 8:00am to 5:00pm MT, Mon-Fri

Minnesota Automobile Personal Lines Automobile Manual

Minnesota Personal Lines – FlexAuto QBE Regional Companies

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IMPORTANT CONTACT INFORMATION

National Farmers Union Property and Casualty Company

5619 DTC Parkway, Suite 300

Greenwood Village, CO 80111-3136

8:00am to 4:30pm MT, Mon-Fri

NFU P&C UNDERWRITING

Toll Free: (800) 347.1961 Personal Lines and Farm Lines


CLAIMS:

Please have the insured immediately report all losses to: 866.NFU-LOSS

OR: 866.638.5677

24 Hours a Day, 7 Days a Week

Fax: 781.245.0291


6:00 am to 10:00 am MT, Sat

Home Office Claims

Toll Free: 800.347.1961

Fax: 303.337.5687


AGENT RESPONSE CENTER (ARC)

Toll Free: 800.495.7378

[email protected]


Saturday Cell Phone Support

303.718.1640

8.00am to Noon MT

BILLING SERVICES:

Toll Free: 800.553.4471

Fax: 608.825.0322

Email: [email protected] Automated Voice Response Unit (VRU)

Toll Free: 800.553.4471

Available for all CABS accounts

24 hours a day/7 days a week

mailto:[email protected]

mailto:[email protected]


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Contents

Program Description

Unacceptable Risks Ineligible Policies Ineligible Drivers Ineligible Vehicles Prohibited Vehicle List Submit for Approval

Underwriting New Business Remarketing

Vehicle Rating Vehicle Use Vehicle Symbols Vehicle Location Vehicle Type and Sub type

Driver Rating Driver/Vehicle Assignment Driver Rating Information Youthful Driver Rating Financial Responsibility

Driving Incidents Experience Period and Chargeability Unverifiable MVR Incident Point Schedule Accident Surcharge Waiver

Coverage Options Liability Physical Damage Additional Coverages


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Contents Discounts

Surcharges

Policy Period

Fees

Binding Authority and Application Submission Binding Authority Severe Weather Binding Authority Material Misrepresentation of Risk Completing an Application Application Submission Agency File Maintenance and Audits

Policy Processing and Servicing Changes Renewals Non renewals Canadian Financial Responsibility Laws


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Program Description QBE FARMERS UNION INSURANCE seeks to insure persons who are responsible, reliable, stable, and who live and work in environments void of extraordinary or unreasonable risk.

Our private passenger auto program is designed to accommodate a wide variety of personal and farm risks, while providing competitive prices and coverage options to meet your customer’s needs. We have achieved this goal by incorporating more pricing segmentation within the product, streamlining the product design, and creating a state of the art issuance system.

Our program is targeted to experienced drivers with limited driving incidents. Snowmobiles, ATVs, motorhomes, trailers, and antique/classic autos can be written on the same policy as the personal auto. Coverage is available for private passenger vehicles as well as farm vehicles; our intended farm market are the vehicles used on the individually or family owned farms.

Profitability is dependent upon adherence to the pricing, eligibility, and underwriting guidelines set forth in this manual.

Unacceptable Risks Ineligible Policies • The primary named insured does not have a financial interest in the vehicle(s), i.e., owner or

lessee. An exception may be allowed, subject to prior underwriting approval, for children of the named insured(s) that are permanent household members living with the named insured, who are sole owners or lessees of one or more vehicles. In such cases, the father, mother or both may be listed as the named insured.

• There is no verifiable Minnesota garaging location for each vehicle. A P.O. Box garaging address is not acceptable (exception: rural route P.O. boxes are acceptable).

• There is no permanent home, cell, or work telephone number. • Two (2) or more private passenger auto insurance policies for the same household.

Exceptions: › Children of named insured who own their own vehicles; › Unrelated household residents or roommates; › Related farm accounts.

• Vehicles from more than 1 household may not be listed on a single policy. Exceptions: › Student or military risks (e.g. spouse of named insured or unmarried child of insured); › Husband/wife in the process of divorce if separated less than 1 year and the vehicle is still

considered community property; › Multiple households on a single farm (e.g. single farm being a single legal entity).

• Policies with an Estate, Receivership, Corporation or Partnership as primary named insured. However, a farm corporation or partnership will be listed as a Second Named Insured. In the event that the named insured dies, an Estate may be changed to the primary named insured.


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Unacceptable Risks

• Policies where any driver does not possess or obtain (within 30 days of policy inception) a valid license in the state in which the policy is or will be issued. We will accept drivers, provided they meet all other UW criteria, without an in-state driver’s license, however, they will be referred to Underwriting upon renewal.

• Policies in which any driver has no valid driver’s license, unless the license status will become valid with the issuance of the policy (proof of insurance) or by an SR22 filing.

• Policies where the primary named insured is under age 18 unless QBE Farmers Union Insurance provides auto insurance to his parents or guardian.

• Policies with up to 4 drivers with more than 6 driving incidents (at-fault accident, alcohol related, minor, and speeding violations as defined by this manual), during the prior 35 months for all drivers combined.

• Policies with more than 10 driving incidents (at-fault accident, alcohol related, minor, and speeding violations as defined by this manual), during the prior 35 months for all drivers combined.

• Policies with more than 1 major or alcohol related violation (as defined by this manual) during the prior 36 months.

• Policies without at least 1 rated Private Passenger or Farm Truck vehicle type. • Risks with 3 or more vehicles classified as artisan or business use. • Policies covering any personnel employed in illegal enterprises and/or occupations. • Applicants or households for which QBE Farmers Union Insurance has cancelled or non-renewed

a policy: › For misrepresentation in connection with an application for insurance; › For misrepresentation in the presentation or settlement of a claim; or › Because of an unauthorized payment in connection with an application for insurance or a policy. › Because the named insured and/or spouse still has an outstanding balance from a prior policy

(acceptable if balance is paid at time coverage is bound).

• Policies financed through an outside premium finance company Ineligible Drivers • Drivers under the minimum age for state licensing. • Any driver with an unacceptable driving record as described in these rules or an unacceptable

license status: › Drivers with more than 1 alcohol related violation (as defined by this manual) during the prior 35

months; or › Drivers with more than 3 driving incidents (at-fault accident with claim payment, alcohol related,

minor, and speeding violations as defined by this manual) during the prior 35 months; or › Drivers without a valid driver’s license, which include expired, revoked, suspended or cancelled,

unless the license status will become valid with the issuance of the policy (proof of insurance) or by an SR22. If the state has granted limited driving privileges for work reasons, we will consider writing the driver (if this can be confirmed from the motor vehicle record). The risk will be referred to the underwriter.


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Unacceptable Risks • Military personnel not permanently stationed in Minnesota (exceptions: those who have been

deployed or called to active duty in the U.S. military, those whose permanent address is within Minnesota and they have no regular access to a covered vehicle where they are stationed).

• Any driver who has been convicted of a criminal felony or insurance fraud. • Any driver who has a physical impairment, mental illness or nervous disorder that does not

provide a physician’s statement that such person is capable of safely operating a motor vehicle. Ineligible Vehicles • Vehicles without a permanent garaging address in Minnesota (exception: student with vehicle at

school with an alternate garaging address). • Vehicles insured for Comprehensive and Collision coverages only (exception: Trailers). • Vehicles not registered in Minnesota. If vehicle has newly located to Minnesota, the vehicle must

be registered in Minnesota within 30 days of the policy effective date. • Vehicles not garaged in the state of Minnesota at least 10 months of every year. Exceptions:

› Student with vehicle at school with an alternate garaging address. › Motorhomes - must be garaged in the state of Minnesota at least 6 months of every year.

• The following vehicles are unacceptable unless vehicle is classified and rated as a Farm Truck: › Vehicles greater than 1 ton; › Vehicles used for pickup or delivery of goods (hauling for hire is unacceptable); › Commercial vehicle types (i.e. dump trucks, semi-tractors).

• Vehicles used for limousine, emergency services or any other non-farm commercial use. • Vehicles used to carry persons or property for compensation or a fee (does not apply to shared-

expense car pools) including hauling for hire. • Vehicles with snowplowing equipment unless the vehicle is used on the insured’s own premises

for their own personal or farm use. Use of snowplowing equipment off premises is considered a commercial risk and is unacceptable – except for the incidental use to help others where the insured receives no remuneration or gratuity.

• Vehicles leased or rented to other drivers by the insured. • Vehicles which are regularly made available to unlisted drivers. • Motorhomes with a value over $300,000; Custom Vehicles with a value over $100,000; all other

vehicles with a value over $150,000. • Vehicles with prior damage that may affect their safe operation. Note: Any prior damage on any

vehicle must be noted on the application. • Vehicles used for racing or modified or customized for the purpose of participating in any type of

competition: show, speed, sound, etc. • Vehicles with modified suspensions which jump, rock or bounce. • Vehicles manufactured for sale outside of the United States (grey market). • Vehicles classified as kit cars, also aluminum or stainless steel cars. • Vehicles equipped with cooking equipment or bathrooms, unless vehicle is classified and rated as

a Trailer or Motorhome. • Vehicles used as a residence. Motorhomes used as a residence for over 3 months. • Vehicles listed on the Prohibited Vehicle List as defined in this manual.


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Unacceptable Risks

These vehicles are unacceptable for any coverage, regardless of model year, usage, garaging location, value, or driver eligibility:

Make Model Make Model

Acura NSX Lamborghini All

Aro All Lancia All

Aston Martin All Lotus All

Avanti All Maserati All

Bently All McClaren All

Bertone All Mercedes All Hearses and Limousines

Bizzarini All Morgan All

BMW All Dinan models Nissan All Stillen models

Bricklin All Panoz All

Bugatti All Pantera All

Cadillac All Hearses and Limousines Pininfarina All

Callaway All Pontiac All Lingenfelter models

Checker All Porsche All Ruf models

Chevrolet All Lingenfelter, Hammer

I Mallet modes, all Hearses and Limosines

Rolls Royce All

Chrysler All Limosines Roush All

Daimler Chrysler Maybach Ruf All

Delorean All Saleen All

Dinan All Shelby All except Ford Shelby Mustang

Dodge Viper & Shelby Durango Sterling All

Ford GT40, All Saleen models Triumph All

Jeep Postal Units TVR All

Jensen All


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Unacceptable Risks

Submit for Approval For the following situations, we may request additional information to evaluate the risk – including, but not limited to: driver medical history, vehicle photos, vehicle appraisals, vehicle inspections, and farm business records.

• Any risk with a driver who is nationally or locally known to a large segment of the population (politician, celebrity, professional athlete, or entertainer).

• Policies where the primary named insured is under age 18 (parent(s) must have a QBE Farmers Union policy).

• Policies requesting Liability limits greater than 250/500/250 if the policy is not in a Preferred market.

• Policies requiring an SR-22 filing

Underwriting

New Business Underwriting We take several factors into consideration to place customers into a tier. Prior Insurance and Proactive Customer are combined to create the Pre-Credit Tier. The Insurance Bureau Score is used to create the Credit Tier. • Prior Insurance

› The primary named insured has proof of continuous private passenger auto liability insurance preceding the requested policy effective date with QBE Farmers Union Insurance.

› Length of prior insurance coverage with the prior carrier. › Prior insurance carrier. › Prior bodily injury limits in comparison to selected bodily injury limits. › Any days lapse in coverage. › If LexisNexis is unable to validate the prior carrier information, scan or fax to Underwriting the

proof of prior insurance or proof of compliance. Please keep the original documentation in your office.

› A prior policy with QBE Farmers Union Insurance will not be considered as proof of prior insurance unless one of the following conditions are met:

› The primary named insured is moving from one state to another; › A child is split off from their parent’s policy onto their own policy; › A parent is split off from their child’s policy onto their own policy; › A spouse is separated or divorced from a QBE Farmers Union Insurance named insured; › The primary named insured was previously on a commercial policy.

› Under certain conditions where the primary named insured did not have prior insurance, we will assign a less punitive pre-credit tier. These conditions are:

› Active military deployment without a vehicle; › Previously resided out of the United States; › Previously insured under a commercial auto policy; › Previously had a company car; › Was previously engaged in missionary work without a vehicle; › Has no previous vehicle ownership and is insuring first vehicle; or


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› Any licensed applicants who did not carry liability insurance and can demonstrate that they were not required by law to do so.

Underwriting

• Proactive Customer - Quote is initiated more than 7 days before policy effective date, and prior

insurance with no lapse in coverage. The Primary Named Insured must be 19 or older. It is considered a quote after we have ordered the insurance bureau score. If the quote becomes older than 90 days before it is issued as a policy, we will reorder the insurance bureau score and the time period for Proactive will restart effective the date of the insurance bureau score.

• Insurance Bureau Score › QBE Farmers Union uses LexisNexis as the provider of insurance bureau scores. › An insurance bureau score is not identical to banking, or financial institution credit score,

although it may take many aspects of a person’s financial credit history into consideration. › Be sure to read the disclosure regarding use of consumer reports to the customer during the

quote process. › A score will be obtained for the primary named insured and co-applicant only. We will use the

better of these scores to assign a credit tier. › Be sure to include the full name, address, date of birth, phone number and social security

number when quoting to avoid inaccurate or unavailable information. While the customer has the right to withhold disclosure of their social security number, we may not be able to confirm their insurance bureau score.

› An Insurance Bureau Score report will be ordered during the quoting process. You will not receive any information contained within a customer’s report; however, you will be notified as to whether a report was available. If you receive a message that a report was unavailable, please verify that the information was entered correctly. If not, please correct and resubmit before proceeding.

• Extraordinary Circumstances: It is not possible to identify items within an insured’s credit report that may be impacted by extraordinary life events. Special consideration may be given individually when we have been made aware of such events that negatively affect an individual's credit report.

• Disputes: The Fair Credit Reporting Act (FCRA) gives consumers the right to challenge information in their credit report they believe to be inaccurate.

› An insured may obtain a copy of their report from the consumer reporting agency listed below: LexisNexis Consumer Center

1-800-456-6004 › The insured should review the credit report for accuracy; if it contains errors, they should

immediately call LexisNexis to file a dispute. If the information is confirmed to be inaccurate, the credit bureau must promptly correct those errors.

› Once the Insured has received confirmation that the information in the credit report has been altered or corrected (typically 90 days from the point the dispute was filed and the error confirmed), please contact your Underwriter and they will reorder a credit score. If the score obtained is better than the existing score, the new score will be used in rating.


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Underwriting

Remarketing • After 36 months, all policies will automatically be re-underwritten and moved to the best pre-credit

tier they would now qualify for (if better than the current tier); provided that they have maintained a clean violation/accident history, have no late or NSF payments, and no lapses in coverage during the prior 24 months. Policies that do not move as a result of not meeting the latter requirements will be re-evaluated for movement at each subsequent renewal until successful.

• Insurance Bureau Score: All policies will automatically have a new score ordered every 36 months from the time of their last report, or as often as annually if requested by the primary named insured or co-applicant. The credit tier will only be adjusted if it is an improvement.

Vehicle Rating

Vehicle Use If a vehicle is qualified for more than one use, it will be rated under the highest rated use (highest to lowest: Business, Artisan, Commute, Pleasure, Farm, Service Unit). • Business - A vehicle is considered used for business purposes if it is principally driven for

business purposes other than driving to and from the principal place of work. Only vehicles classified as Private Passenger type may be rated as Business Use.

› Examples of acceptable business use: › Vehicles used by real estate agents, insurance agents, lawyers, doctors, accountants, or other

professionals who regularly visit multiple locations each day (excluding clergy who may be rated as Pleasure Use);

› Vehicles used by salespersons or service representatives, or for customer-oriented home sales (e.g. Mary Kay, Tupperware);

› Vehicles owned by the primary named insured and used by domestic employees (e.g. maid, chauffeurs).

› Unacceptable business use includes, but is not limited to: › Pick-up or delivery of goods (e.g. newspaper, pizza) › Limousine or taxi services › Livery conveyance › Courier or escort services › Vehicles greater than 1 ton.

› There can be up to 2 vehicles with Business or Artisan use on the policy.

• Artisan – Private Passenger type vehicle used primarily for carrying tools and supplies between the primary named insured’s residence and a job site if all of the following conditions are met:

› The insured visits no more than 2 job sites each day; › The vehicle is owned or leased by an individual, not a corporation or partnership;


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› The vehicle is operated solely by the primary named insured and covered family members; › The vehicle is not used to transport explosives, chemicals, flammable materials, or more than

500 pounds of supplies or equipment;

Vehicle Rating

› The vehicle is not used to pick up or deliver goods or property for the sole purpose of distribution, resale, or delivery. Any goods or property picked up or delivered must be used by the driver at a job site in the performance of the driver’s craft or trade;

› The vehicle is not greater than 1 ton; and › There can be up to 2 vehicles with Business or Artisan use on the policy.

• Farm – Used primarily on a farm, ranch, or orchard. Requires a package farm policy or proof of a farmowners policy with another carrier. To be classified as Farm Use, a vehicle

› Must be principally garaged on the farm, ranch, or orchard (Exception: farmer that lives in the city and commutes to the farm);

› Cannot be used in commuting to work or school; and › Cannot be used in any business other than farming and ranching of the insured’s farm. › NOTE: A rural location is not, in itself, sufficient cause to classify a household as farm

premises. In order to qualify as farm premises the grounds must be used full time for farming or ranching activities and these activities must generate a minimum of $20,000 of income.

• Service Unit › The vehicle must be at least 10 model years old; or › If the vehicle is newer than 10 years old, it must be modified for farm use. Such vehicles will

be referred to Underwriting. A picture is required showing the modification. Examples of acceptable modification are: truck bed altered to haul hay, fuel tank sprayer, etc.

• Commute - vehicle is used primarily to drive to and from work or school, regardless of the number of miles driven. Work does not include any job or occupation defined in Business, Artisan or Farm use.

• Pleasure – If none of the previous classifications apply, vehicle is considered Pleasure Use.

Vehicle Symbols • For rating purposes, each vehicle is assigned a symbol for each coverage by the quoting system,

based on the Vehicle Type and Subtype. For Private Passenger vehicle model years 1981 and newer, symbols are determined by the VIN. Please ensure the VIN is correct for private passenger vehicles since final rating symbols are assigned based on the VIN.

• If no symbol appears on the rating software, call ARC and we will update the system with the appropriate vehicle symbol.

• The following Vehicle Types are rated on a stated amount basis for Comprehensive and Collision coverages:

Vehicle Type

Custom Vehicle (more than $40,000 in custom equip) Miscellaneous Vehicles (e.g. snowmobiles, ATVs)

Antiques and Classics Farm Trucks (including semi-tractors)


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Motorhomes Trailers

Vehicle Rating

• Stated amount provides physical damage coverage up to the lesser of the actual cash value, the stated amount specified by the insured on the policy, or the amount necessary to repair or replace the property with other property of like kind and quality.

• Salvage title vehicles are acceptable but note that having a salvage title affects the Actual Cash Value of the vehicle which affects the settlement value in the event of a loss.

Vehicle Location • Rating territories are defined by zip code. Use the zip code in which the vehicle is principally

garaged. • Students away at school with a vehicle need to use the zip code at school where they reside. • P.O. boxes are not acceptable as garaging location, unless they are rural route zips. Vehicle Type and Subtype • Private Passenger Vehicles – Includes private passenger autos, vans, sport utility vehicles and

pickups less than or equal to 1 ton. › Liability coverages are available for all model years. › Comprehensive and Collision coverages are available for model years 15 years or newer.

• Custom – Includes private passenger autos, vans, sport utility vehicles and pickups less than or equal to 1 ton that have more than $5,000 in Custom Parts & Equipment. Camper Vans with self-contained living compartments should be rated as a Motorhome. The stated amount cannot exceed $100,000; values above $60,000 will be referred for approval.

• Antique/Classic – Includes vehicles used on a limited basis for use in exhibitions, club activities, parades, or other similar functions. An Antique is a motor vehicle which is 25 or more years old that has been restored, maintained, or preserved. A Classic is a motor vehicle which is 10 or more years old and which, because of limited production or exceptionally fine workmanship, is a rarity or of historical interest.

› Photos of the vehicle and an Antique/Classic questionnaire are required to bind coverage. › Comprehensive coverage is required. › To bind Comprehensive and Collision coverages, a current appraisal is required if the value of

the vehicle is over $50,000. › Antiques do not qualify for or enable other vehicles to receive the Multi-Car discount. › A Private Passenger or Farm Truck vehicle type must be insured on the policy. › Rental Reimbursement coverage is not available.

• Farm Trucks – Includes trucks greater than 1 ton primarily designed to carry loads rather than passengers. These vehicles must be used primarily on the insured’s residence for farming except to and from market. Semi Tractors used exclusively for farming are classified as Farm Trucks. Pickups less than or equal to 1 ton do not qualify as Farm Trucks. The common types are shown below.


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Vehicle Rating

› Photos, including verification that vehicle has farm plates, may be request from Underwriting on Semi Tractors;

› The Tractor and Semi-trailer Questionnaire (PG-42, 5/97) is required for tractors. › Vehicle annual mileage is limited to 7,500 miles; tax form 2290 Heavy Vehicle Use Tax filing is

required for verification of annual mileage for semi tractors. › Hauling for hire is allowed under the following conditions:

› Insured may only haul agricultural products or livestock for other farmers; › No hauling of chemicals, fertilizers, or other hazardous products; › Maximum radius is 200 miles; › Maximum receipts of $10,000 or net receipts of work done on an exchange basis with other

farmers; › Cargo for others should be written through QBE Farmers Union Specialty Lines; and › No back-hauling unless the above criteria is met.

› Kel or Mini Trucks can be written as Farm Trucks for accounts with a Farm Package: › Drivers under age 21 must have a valid driver’s license or permit; › Road use is limited to a radius of 50 miles; › Vehicles can be written up to a maximum Stated Amount of $10,000; › Minimum deductibles are $1,000 for both Comprehensive and Collision coverages; › The Mini Truck Questionnaire (PV183 03-09) must be submitted for each vehicle.

› Policies without a Private Passenger vehicle type will be referred to Underwriting. › Rental Reimbursement coverage is not available. › Towing & Labor coverage is not available for semi-tractors. › Farm trucks do not qualify for or enable other vehicles to receive the Multi-Car discount; however

a fleet credit will apply to policies with 5 or more Farm Use vehicles.

Farm Truck

Dump Truck

Flatbed Truck

Stake Truck

Tank Truck

Semi-Tractor Mini Truck


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Vehicle Rating • Trailers – Those designed for either Pleasure use with Private Passenger vehicles or Farm

Trucks in the business of farming. The common types are shown below.

› Liability coverages are not available for trailers (exception: semi-tractor trailers where the semi-

tractor is not listed on the policy). However liability coverages, if afforded to the other vehicles on the policy, will extend to the trailer while it is being towed by a covered vehicle on this policy.

› Use for Semi-trailers is restricted to local farming operations. › Hauling for hire is allowed under the following conditions:

› Insured may only haul agricultural products or livestock for other farmers; › No hauling of chemicals, fertilizers, or other hazardous products; › Maximum radius is 200 miles; › Maximum receipts of $10,000 or net receipts of work done on an exchange basis with other

farmers; › Cargo for others should be written through QBE Farmers Union Specialty Lines; and › No back-hauling unless the above criteria is met.

› Semi-trailers must be commercially designed and built. › Semi-trailers where the semi-tractor is not listed on the policy may only be written if the semi-

tractor is written on a separate QBE Farmers Union commercial policy. › A Private Passenger or Farm Truck vehicle type must be insured on the policy. › Rental Reimbursement and Towing & Labor coverages are not available.

Flatbed Trailer Livestock Trailer Semi-Tractor Trailer

Utility Trailer

Conventional Trailer Fifth Wheel Trailer Mounted Trailer Pop-Up Trailer

Horse Trailer Homemade Trailer


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› Trailers do not qualify for or enable other vehicles to receive the Multi-Car or Fleet discounts.

Vehicle Rating • Motorhomes – Includes motorhomes and camper vans. These are motor vehicles equipped with

self-contained living compartments that are an integral part of the vehicle chassis. › Motorhomes used as a permanent residence (for over 3 consecutive months) are ineligible. › A Private Passenger or Farm Truck vehicle type must be insured on the policy. › Rental Reimbursement and Towing & Labor coverages are not available. › Motorhomes do not qualify for or enable other vehicles to receive the Multi-Car discount.

• Miscellaneous Vehicles –Includes all-terrain vehicles (ATVs), snowmobiles, dune buggies, golf carts, LSVs and trail bikes. These vehicles must be off road vehicles, meaning they are not licensed or registered for use on public roads and are used principally off public roads.

› A Private Passenger or Farm Truck vehicle type must be insured on the policy.

• A Low Speed Electric Vehicle (LSV) is a vehicle that: › Is self-propelled utilizing electricity as its primary propulsion method; › Has at least 3 wheels in contact with the ground; › Does not use handlebars to steer; and › Exhibits the manufacturer’s compliance with 49 CFR 565 or displays a seventeen character

vehicle identification number as provided in 49 CFR 565. › Personal Injury Protection, Uninsured/Underinsured Motorists, Rental Reimbursement, and

Towing & Labor coverages are not available. › Miscellaneous Vehicles do not qualify for or enable other vehicles to receive the Multi-Car

discount.

Driver Rating

Driver/Vehicle Assignment QBE Farmers Union Insurance utilizes rating methodologies which differ depending upon the vehicle type:

• Private Passenger, Custom, and Miscellaneous Vehicles – drivers are not assigned to vehicles. We will develop an average rating factor of all rated household members, including consideration of their driving incident history, and apply that factor to all of these vehicles on the policy. For policies in Ultra-Preferred or Preferred Markets, all drivers will be used regardless of the number of vehicles; otherwise, only the highest rated drivers will be used up to the number of these vehicles on the policy. When there are more Private Passenger and Custom vehicles than drivers, an excess vehicle factor will be assigned to the extra vehicles.

• Antique/Classic and Motorhome – drivers are not assigned to vehicles. We will develop an average rating factor using only the primary named insured, his/her spouse, and if applicable, any second named insured. Driving incident history will be considered.

• Farm Trucks: › No drivers are assigned (however, we may request employment records for policies with Farm

Trucks in order to review employee driving history);


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› Claim history for the preceding 35 months of the rated vehicles will be used to develop an average Farm Truck Experience rating factor, and apply that factor to all Farm Trucks on the policy. The rating factor will consider the date, type, amount and number of losses during the experience period.

Driver Rating

› At each renewal, the claims history will be updated, and a new average Farm Truck Experience rating factor developed. Claims over 35 months old will be removed from consideration, and any new claims occurring during the prior policy period will be included in the development of the new rating factor.

Driver Rating Information • For the Primary Named Insured, please use the head of the household. • Driving records of all household residents are considered in judging overall risk acceptance. • All members and residents of the insured's household must be listed on the application. › Unlicensed drivers will not be considered in policy rating; however they must be a non-rated

household member. The agent must submit a policy change when such drivers become licensed during the policy term; at such time those drivers will be considered in policy rating.

› Household members with a temporarily suspended license in need of an SR-22 or a cancelled license will be considered for rating.

› Drivers must obtain a Minnesota driver’s license within 30 days of the policy effective date (exception: full-time military personnel, and their dependents, who are stationed in Minnesota). Out-of-state licenses will be referred to Underwriting.

› Drivers with a valid foreign, international, or diplomatic license will be surcharged until they submit proof of a valid Minnesota license.

› If a rated driver has been licensed for at least 3 years, and we are unable to verify the driver's driving record for a full 35 months preceding the policy inception date, driving record points will be assigned.

› A policy shall not be changed midterm because of the attained age of a driver or to affect a change in Driving Incidents.

› Drivers 18 and older may be split out onto their own policy if the following conditions exist: › The youthful is the only registered owner of the vehicle or registered along with the parents; › The youthful is living in the household; and › Parent must be listed as the Primary Named Insured with a non-driving status.

• Married as used in this manual refers to those who are legally married or in a similarly committed relationship, and are living with his/her spouse or domestic partner. Widowed drivers will be rated as married. Otherwise, drivers who are single, legally separated, or divorced shall be rated as Single.

• Second Named Insured › A second named insured can be designated by checking the Named Insured field on the Policy

Details screen of your quoting system. The designated individual will be shown as a named insured on the declarations page. The second named insured does not have to be the primary named insured’s spouse.

› The second named insured can be a corporation or partnership if it is a farm entity provided the following conditions are met:

› An active director or officer of the corporation must operate the farm.


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› All officers of the corporation must be listed on the policy and designated as named insureds. › All drivers that have regular access to covered vehicles must be listed on the policy. › Spouses and children of all named insureds must be listed on the policy even if they have their

own personal use vehicles. › Vehicles must be titled to the farm corporation or an officer of the corporation.

Driver Rating

› If a vehicle is titled to an officer of the corporation, that officer must be a full-time, active employee deriving their main source of income from the farm corporation. The officer must also reside within 20 miles of the farm.

› Retired persons who are still officers of the corporation are eligible to be written even if they reside away from the farm premises.

• Driver Restriction - › You may restrict any driver from the policy except any driver for which we have filed an SR-22. › Both the Primary Named Insured, spouse (if applicable) and restricted person(s) must sign the

change excluding the specifically named driver from coverage. This restriction will apply to new business policy term and all subsequent renewals and may only be superseded by a change request to add the restricted person(s) to the policy as a driver

› We will consider all listed persons above the legal driving age as drivers unless restricted (exception permitted driver under the age of 19) or listed as non-rated household member.

› A driver may be restricted from all vehicles with the exception of farm vehicles with a carrying capacity over 2 Tons. Otherwise, a driver cannot be restricted from a specific vehicle.

• Non-Rated Household Member › Under the following circumstances, you may designate a household member as non-rated:

› Household member has a permanently revoked license; › Household member has never been licensed; › Household member is over 55, unlicensed, and does not drive; › Household member is disabled and does not drive;

Household member is residing out of the country; › Household member is incarcerated;

Note: QBE Farmers Union Insurance may request additional information or acquire information from external vendors to validate household member qualifies for non-rated household member status. Youthful Driver Rating • Drivers with a learner’s permit, that are single, under the age of 19 and a child of the primary

named insured, will not be included in rating of the policy. • Drivers age 24 and under who have a birthday within 30 days of the policy inception date will be

rated based on the age of their upcoming birthday. A policy cannot be changed midterm to adjust rating for attainment of a lower-rated age classification.

• Drivers age 20 and under may be listed as Occasional operators if they drive all vehicles less than 50% of the time. A discounted factor will be applied to the driver if there are more drivers than Private Passenger and Custom vehicles.

• Good Student › An unmarried permanent household member age 24 and under, who:


03/2018 18

› Is a full-time student in high school or enrolled as a full-time student in academic courses in a college or university, including technical colleges; and,

› Has scholastic records for the school semester immediately preceding the policy inception date, showing that the driver was a full-time student and:

Driver Rating

› In schools designating grades by letter (e.g. A, B, C, D and F), with a grade average of B for all subjects combined (note: If the grading system is not disposed to averaging, no grade can be other than an A or B); or,

› In schools where numbers are used to designate grade "points" (such as 4, 3, 2 and 1), with a grade point average of at least 3.0 for all subjects combined; or,

› Enrolled in a home study program, and ranked in the upper 20% on one of the following national standardized tests:

(a) PSAT (Preliminary Scholastic Aptitude Test) (b) PLAN (Preliminary American College Test) (c) SAT-1 (Scholastic Aptitude Test-1) (d) ACT (American College Test) (e) Iowa Test of Basic Skills (f) California Achievement Test

› The drivers will receive a discount for each qualifying term, up to and including the age of 24. › This discount will not be granted unless the Company supplied certificate is certified and kept on

record in the Agent's file. The certificate must be updated every two years at renewal to retain the discount.

› The discount will not apply if the driver requires an SR-22 filing.

• Minor Child › A household member age 20 or under, who is a child of the Primary Named Insured. › The driver will receive a discount for each qualifying term, up to and including the age of 20.

• Safe Driver › An unmarried household member age 24 or under, who:

› Completes the QBE Farmers Union Safe Driver course; and › Signs the Safe Driver certification.

› The driver will receive a discount for each four-year qualifying term, up to and including the age of 24. The driver must take each subsequent course to continue the discount after each four-year period. The discount will be removed at renewal if the driver has an at-fault accident or chargeable violation.

› The discount will not apply if the driver requires an SR-22 filing.

• Student Away At School › An unmarried household member age 24 or under, who:

› Is a full-time student (e.g. 12 or more credit hours per semester for higher education) › Resides at school over 100 miles from the insured’s garaging address; and › Does not have regular access to a covered vehicle while away at school; and


03/2018 19

› Operates a covered vehicle only while home during school vacation or holiday periods. › The driver will receive a discount for each qualifying term, up to and including the age of 24. › Acceptable proof is a copy of the student’s transcript for the semester immediately proceeding

the policy inception date, which shows the name and address of the school. › If a Student Away at School no longer meets the above criteria, the agent must notify the

company to remove the discount › The discount will not apply if the driver requires an SR-22 filing.

Financial Responsibility (SR-22) Filings • SR-22 Filings may be made for any resident driver if required subject to the following: › Any driver requesting a filing must have a verifiable driving record; and › A driver with an SR-22 filing cannot be excluded from the policy.

• Any policy with an SR-22 must offer liability limits, which satisfy minimum financial responsibility requirements for the state requesting the filing.

• A fee will be charged for each filing, which is fully earned and non-refundable in the event of policy cancellation. This fee must be collected with the down payment at the time of policy issuance. If a driver requiring an SR-22 filing is added mid-term, the fee will be added to the next installment.

The Company will issue an SR-26 cancellation upon lapse or expiration of the policy.

Driving Incidents

Experience Period and Chargeability • The experience period used in the determination of Driving Incidents for accidents and convictions

shall be 35 months preceding the policy effective date. No chargeable accident or moving traffic conviction shall be surcharged for more than 35 months.

• An Incident Age adjustment factor will apply to the developed point surcharge based on the combination of:

› Violation age, and › The number of incidents.

• To determine if the accident or violation took place in the chargeable period, use the occurrence date (loss date is used for accidents).

• If an occurrence results in multiple violations or accidents, the driving incident points for that occurrence will be based on the violation or accident with the highest point charge. Enter all violations/accidents; the rating logic will properly assign them.

• Out-of-State convictions and accidents are chargeable. • All incidents are considered At-Fault unless proof of Not-At-Fault (NAF) is provided. If details,

indicating fault of all accidents, are not included on the application, at-fault accident points will be charged. Accidents caused by the driver swerving to avoid an object and colliding with another object are considered at-fault. The following documents will be considered acceptable proof of NAF:

› A copy of the police report or court documents; › A letter from the previous carrier; or


03/2018 20

› Any other documentation which proves not-at-fault. Documentation must be kept in your agency files and made available to QBE FUI upon request.

• We will also accept details of NAF from the agent or customer such as: › The vehicle involved was legally parked at the time of the accident. If the parked vehicle rolls

from the parked position then any such accident is at-fault. › The owner or driver of the insured’s vehicle was reimbursed (or received judgment against

another) for more than 50% of the property damage. › The vehicle involved in the accident was struck in the rear by another vehicle and the insured

was not convicted of a moving traffic violation in connection with this accident. › The auto operated by the insured or any resident driver is struck by a “hit-and-run” vehicle, and

the insured reported the accident to the police within 24 hours of discovering the accident. › The insured was not convicted of a moving traffic violation in connection with the accident, and

the driver of the other vehicle was convicted of a moving traffic violation. › Accidents involving Physical Damage coverages limited to and caused by flying gravel, missiles,

falling objects or by contact with a bird or animal. › Accidents which result in an amount being paid under Personal Injury Protection or Additional

Personal Injury Protection and no payment is made under the Liability or Collision coverage. Unverifiable MVR • If a driver has had a valid license for at least 3 years, and we are unable to verify the driver's

driving record for a full 35 months preceding the policy inception date, driving incident points will be assigned. If a verifiable MVR is received within 30 days of the policy effective date, the points will be removed.

• Drivers 18 years and younger will not be charged unverifiable MVR points. • Drivers 19 years and older with a learner’s permit will not be charged points during the initial

policy term. However, points will be charged for subsequent terms if an MVR remains unobtainable.

Incident Point Schedule The following is an abbreviated reference chart of violation/accident groupings, with common incidents and associated point charges. The Odyssey system has the full list of violation/accident codes.

• Please choose the appropriate incident(s), assign occurrence date(s), and enter the paid loss amount of any accidents.

• These are points assigned by QBE Farmers Union Insurance for rating; these are not MVR violation points.

• QBE Farmers Union will non-renew a policy with an ineligible combination of incidents on the policy (see Ineligible Policies and Ineligible Drivers section of this manual).

Classification/Incident Description

Points 1st Occurrence

Points 2nd & Subsequent

Accident (Dollar values represent all paid losses at time of assessment)

At fault Accident up to $500 0 0

At fault Accident $501 to $10,000 2 3

At fault Accident $10,001 to $50,000 3 4


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At fault Accident greater than $50,000 4 4

Not At-fault Accidents (Including Uninsured Motorist and PIP claims) 0 0

Violation Groups

Alcohol Related Violations 3 6

Foreign Driver’s License 6 6

Incidents – Nonchargeable (Comprehensive Claims) 0 0

Driving Incidents

Classification/Incident Description

Points 1st Occurrence

Points 2nd & Subsequent

Major Speeding Violations (Speeding 20+ mph over speed limit) 3 3

Major Violations (Driving While Suspended, Reckless Driving) 4 4

Minor Violations (Improper Turn, Failure to Yield etc.) 1 2

Non-Moving Violations (License, Safety Violations 0 2

Speeding Violations (Speeding < 20 mph over speed limit 1 2

Unverifiable Driving Record 6 6

Accident Surcharge Waiver

An insured will not be charged for an at-fault accident if all the following conditions are met: • The claim was reported to Farmers Union Insurance; • The policy has been in force with Farmer Union Insurance for at least 48 months; • The policy did not have any other chargeable accidents during the prior 36 months; • The driver and vehicle were listed on the policy when the accident occurred; and • There are no other waived accidents on the policy.

Coverage Options

Liability • Bodily Injury/Property Damage Liability(BI/PD)

› All vehicles must have the same BI/PD limits (exception: BI/PD will not be applied to Trailers). › Required with SR-22 filings.

• Uninsured Motorists (UM-BI) › UM-BI is required (exception UM-BI will not be applied to Miscellaneous Vehicles or Trailers). › Limits shall be less than or equal to the Bodily Injury limits.

• Underinsured Motorists (UIM)


03/2018 22

› UIM is required (exception UIM will not be applied to Miscellaneous Vehicles or Trailers).. › Limits shall be less than or equal to the Bodily Injury limits.

• Personal Injury Protection (PIP) › PIP is a required coverage that will apply to all vehicles on the policy (exception: PIP will not be

applied to Miscellaneous Vehicles or Trailers). › PIP offers work loss and essential services coverage up to $20,000 and Medical expense

coverage from $20,000 up to $50,000 › Drivers age 60 or older may reject Work Loss coverage.

Coverage Options

BI/PD ($000) UM/UIM ($000)

PIP Medical Options

PIP – Stacking Deductible Options

Stacking Medical Deductible Work Loss/Essential Services Deductible

30/60/10 25/50 $20,000 N $0 $0

30/60/25 30/60 $30,000 N $0 $200

50/100/25 50/100 $40,000 N $100 $0

100/300/50 250/500 $50,000 N $100 $200

100/300/100 500/500 Y $0 $0

250/500/100 Y $0 $200

250/500/250 Y $100 $0

500/500/500 Y $100 $200

Physical Damage • Comprehensive (Comp)

› Comprehensive-only is available at new business on multi-vehicle policies where at least one vehicle carries liability coverage.

› A separate glass deductible of $100 may be selected. › A minimum deductible of $250 will be enforced if the policy passes the number of allowed

Comprehensive losses.

Number of Vehicles on the Policy

Number of Comp Losses Allowed

1-5 3


03/2018 23

6-10 5

11-15 8

16 10 • Collision (COLL) - Cannot be written without Comprehensive coverage. • Rental Reimbursement - Cannot be written without Comprehensive and Collision coverages.

Coverage Options • Towing And Labor - Provides for payment of towing and labor costs incurred each time the

vehicle is disabled, subject to policy restrictions.

COMP Deductible

COLL Deductible Rental Reimbursement Towing and Labor

100 250 $25/Day, $625/Occurrence $300 Per Disablement

250 500 $30/Day, $750/Occurrence

500 750 $40/Day, $1,000/Occurrence

750 1000 $50/Day, $1,250/Occurrence

1,000 2,500

2,500

*0 Glass deductible option available

Additional Coverages • Custom Parts and Equipment

› Custom Parts and Equipment Coverage provides physical damage coverage, on an actual cash value basis up to the stated amount, for custom parts or equipment, devices and accessories. This includes any equipment, other than those which are original manufacturer installed or installed by the dealer as part of the original sale of a new vehicle, that is permanently installed or attached that alter the appearance or performance of the vehicle. Some examples are citizens band radio, two-way mobile, telephone or scanning monitoring device, custom paint, custom wheels, decal, stripe work, toppers, and roof racks. Standard equipment factory installed by a vehicle's manufacturer or dealer as part of the original sale is covered under Comprehensive or Collision coverages.

› To be eligible to purchase coverage, vehicle must have Comprehensive coverage. Collision losses will only be covered if Collision coverage is also selected on the vehicle. $1,000 of coverage will be automatically included for vehicles insured for Comprehensive and/or Collision.

› Applicant/Insured must establish value of the equipment to be covered and may be requested to verify the value at time of application or claim. The insured is required to retain proof (receipt or bill of sale) of all purchases and proper installation.


03/2018 24

› Any items covered under Custom Parts and Equipment Coverage over the $1,000 of included coverage must be described in the Custom Parts and Equipment Coverage Schedule. No coverage above $1,000 will be afforded to items not listed on the application/ policy declarations.

› All items to be covered must be permanently installed in or on the vehicle. Equipment designed to be removed (pullout stereo, nose cover, magnetic antenna, etc.) is not eligible for coverage.

› Coverage limits available from $1-$40,000.

Coverage Options • Lease/Loan Gap Coverage

› Can be purchased on new and used vehicles at any time during the policy term. › There must be a lessor or lienholder that is a financial institution (cannot be a private individual). › Covers the difference between the actual cash value of the vehicle at the time of a total loss

(less the deductible) and the amount owing on the lease or loan. › Payment will not exceed 25% of the actual cash value of the vehicle at the time of loss. › Available to Private Passenger Type Vehicles that carry Comprehensive and Collision coverage

(not available for vehicles rated on a stated amount basis). › Payment will not include unpaid finance, excess mileage or any other charges or expenses

associated with the loan or lease.

• Accidental Death & Dismemberment (AD&D) - AD&D is written on a named person basis. The named person must be a permanent household member who is a rated driver on the policy.

• Extended Non-Owned Car Liability › Bodily Injury, Property Damage, and Personal Injury Protection coverages will be extended to

autos furnished or available for regular use provided there is primary liability insurance in effect. Agent needs to keep proof of primary coverage in their office.

› Coverage is written on a named individual basis. › An example of the need for this coverage – Insured has a company car and wants the

additional liability coverages that their QBE Farmers Union policy provides.

• MotorHome & Trailer Contents › Available only for Motorhomes and Trailers. Premium charge is per $100 of coverage, up to

$5,000 maximum per vehicle. › Vehicle must have Comprehensive and/or Collision coverage. › Provides contents coverage for household furniture or other personal property

› Belonging to you, a member of your family residing with you, or your resident employee who resides with you; and

› Used in or within 25 feet of the vehicle.

• Farm Hired and Non-Owned Car Liability Liability coverage will extend to Private Passenger vehicle types not owned by the insured, when: › The vehicle has been hired, rented, or borrowed by the insured, and › The vehicle is not regularly made available to the insured, and › The vehicle is rented less than 6 months a year; and


03/2018 25

› The vehicle is operated by the insured, or any other person with the insured’s permission, and › The vehicle is used exclusively for the purposes described in the definition of Farm Use.

Discounts

Type/Application Applicable To:

3 Year Accident/Violation Free – Driver Level Applies to a rated driver if the following conditions are met: • The driver has no occurrences (chargeable at-fault accidents or

chargeable violations including Non-Moving violations) during the preceding 35 months; and

• The policy had prior insurance without a lapse in coverage, or with a lapse of 30 days or less.

The discount applies to both new and renewal policies. The discount will be removed at the subsequent renewal if the driver has a chargeable occurrence. The discount will not apply if the driver requires an SR-22 filing.

BI, PD, PIP UM, UIM

COMP, COLL

Fleet – Policy Level Applies if the policy has 5 or more vehicles (excluding trailers) with farm use. There are two levels of discount 5-9 vehicle, 10 or more vehicles

BI, PD, PIP, UM, UIM,

COMP, COLL

Homeowner- Policy Level • Primary named insured must own a home, condo, or a mobile home

(mobile home must have been manufactured less than 10 years ago) • The property must be the primary named insured’s primary residence • Acceptable proof is a copy of the home, condo, or mobile

homeowners insurance declarations page, deed, mortgage coupon, or tax record. Proof must show the property address matching the garaging address of the QBE Farmers Union Insurance auto policy.


COMP, COLL

Longevity – Policy Level Applies if the policy has been insured with Farmers Union insurance or with the prior carrier for three or more consecutive years.

BI, PD, PIP, UM,UIM,

COMP, COLL

Multi-Car Discount – Policy Level • 2 or more vehicles containing BI and PD coverage are insured on the policy • Classic/Antiques, Motorhome, Trailers, Miscellaneous Vehicles and Farm Truck

types do not qualify for or enable other vehicles to receive the Multi-Car discount


COMP, COLL


03/2018 26

Package- Policy Level • Primary named insured must carry a homeowners, farmowners or commercial

(property, general liability, businessowners, commercial package, contractor, restaurant or motel policy) with Farmers Union Insurance.

• Discount doesn’t apply to minors residing in parents’ household unless a parent is listed on the policy as a Named insured


COMP, COLL

Discounts


Paid in Full – Policy Level • Discount will apply when customer pays 100% of the quoted new business or

renewal offer premium. • The discount will not apply if the policy lapses and is reinstated. • The discount will be removed if the payment is returned for non-sufficient

funds. Renewal policies that are capped may not be eligible for all or any of the paid in full discount (due to their policy already being discounted from the cap)

BI, PD, PIP UM, UIM

COMP, COLL

Defensive Driver- Driver Level • Applies if the following conditions are met: › Driver is 55 years of age or older and has successfully completed a

Minnesota state approved Safe Driver Program during the past 3 years; › Insured submits certificate issued by the course sponsor as proof of course

completion. • The discount will apply until three years after the date of completion of the

course. Each participant must take an approved course every 3 years to continue to be eligible for the discount.

• The successful completion of more than one course within a 3-year period does not qualify a driver for additional discounts.

• A discount applied during a policy period shall be pro-rated over the term of the policy


COMP, COLL

Good Student – Driver Level • For Private Passenger and Custom Vehicle Types, an unmarried permanent

household member age 24 and under, who qualifies based on academic achievement with a semester grades of A and B only; a grade report point average of 3.0 or higher, or enrolled in a home study program and ranked in the upper 20% on a qualifying national standardized test.

• Acceptable proof is a copy of the student’s transcript for the semester immediately preceding the policy inception dates which shows the name and address of the school

• The discount will not apply if the driver requires an SR-22 filing • A discount applied during a policy period shall be pro-rated over the term of

the policy.


COMP, COLL


03/2018 27

Minor Child – Driver Level • A household member age 16 to 20, who is the child of the Primary Named

Insured • The driver will receive a discount for each qualifying term up to and including

the age of 20.


COMP, COLL

Discounts


Rejection of Work Loss Coverage – Driver Level For drivers age 60 and older who forgo all work loss coverage. PIP

Safe Driver- Driver Level • For Private Passenger and Custom Vehicle Types, an unmarried household

member age 24 and under who: › Completes the QBE Farmers Union Safe Driver course; and › Signs the Safe Driver certification

• The driver will receive a discount for each four year qualifying term, up to and including the age of 24. The driver must take each subsequent course to continue the discount after each four-year period.

• The discount will be removed at renewal if the driver has an at-fault accident or chargeable violation. The discount will not apply if the driver requires an SR-22


COMP, COLL

Student Away at School – Driver Level • For Private Passenger and Custom Vehicle Types, an unmarried permanent

household member age 24 and under, who: › Is a full time student (12 or more credit hours); and › Resides at school over 100 miles from the insured’s garaging address; and › Does not have regular access to a covered vehicle while away at school; and › Operates a covered vehicle only while home during school vacation or

holiday periods

• Acceptable proof is a copy of the student’s transcript for the semester immediately preceding the policy inception dates which shows the name and address of the school.

• The discount will not apply if the driver requires an SR-22 filing.


COMP, COLL

Anti-Theft – Vehicle Level • For all vehicle types except Miscellaneous Vehicles and Trailers, a discount

will be applied when the vehicles has an authorized antitheft protection device. The device must be provided by the manufacturer of the vehicle as original equipment or installed in the vehicle by the manufacturer, and the device must

COMP


03/2018 28

be self-activating upon the locking of the passenger doors of the vehicle that does one or more of the following when activated:

› Sound an alarm; › Cause the vehicle horn to sound; › Cause the vehicle lights to flash; or › Cause the vehicle to be rendered inoperable.

• The named insured must retain proof of device installation and the agent must retain proof in their files:

Discounts


Snowmobile Auxiliary Lighting System – Vehicle Level • Snowmobiles that have an auxiliary hazard warning lighting system – meaning

a system installed by the manufacturer of a snowmobile as original equipment or installed in a snowmobile by the manufacturer or an authorized dealer of that manufacturer as an aftermarket system that does the following when activated:

› A yellow light emitting diode (L.E.D.) light on the front of the snowmobile that flashes at least once per second and is visible at least one-half mile in front of the snowmobile; and

› A red light emitting diode (L.E.D.) light on the rear of the snowmobile that flashes at least once per second and is visible at least one-half mile behind the snowmobile.

BI, PD COMP, COLL

Surcharges


Driver Restriction Surcharge – Policy Level A surcharge is applied based on the number of restricted driver on the policy

BI, PD, PIP UM UM, UIM

COMP, COLL

Financial Responsibility (SR-22) Filing – Driver Level A surcharge is applied when a driver has an SR-22 filing


COMP, COLL

Policy Period

Six month and annual policy terms are available for all business.

Billing Information • All billing is direct bill from the company. We do not accept premium financing. • Please submit all payments gross. Do not retain commission.


03/2018 29

• Installment notices are sent directly to the insured. Please encourage your insureds to mail payments to the address provided on the bill. Payments must be received by the due date indicated on the bill.

Billing Information • New Business – The following payment plans are available as both direct Bill and EFT options:

Available Payment Plans Down Payment Percentage Number of Installments

Six Month Policy Term

Paid In Full* 100% 0

Monthly 20% 5

2 Pay 50% 1

Annual Policy Term

Paid In Full* 100% 0

Monthly 9.1% 11

2 Pay 50% 1

4 Pay 24% 3

6 Pay 16.67% 5 • Renewal – Billed in equal installments for all payment plans except for policies that are paid in

full. • Effect of Policy Changes on Installments – Any premium changes caused by a policy change

will result in the adjustment of remaining unbilled installment (each remaining installment adjusted equally).

Fees All fees are fully earned and are not subject to return premium calculations upon cancellation of the policy.

• Direct Bill Installment – A $6 service charge will be applied to each payment plan installment except EFT plans.

• EFT Installment – No service charge applies.


03/2018 30

• Non-Sufficient/Returned Funds (NSF) – Policies with payments returned to the company for non-sufficient or returned funds will be charged a $25 fee.

• Reinstatement – If a policy is reinstated, a $25 fee will be applied. • SR-22 – a $25.00 fee will be charged for each driver requiring a Financial Responsibility Filing. A

fee will be charged for each policy term for which a filing is required.

Electronic Funds Transfer (EFT) General • EFT payment plans may be set up at new business or renewal term inception. • Once a policy is set up on an EFT payment plan, a cash payment cannot be applied to that policy. • An EFT payment plan will be set up initially by customer number and all policies under that

customer number will have withdrawals taken from the same bank account. If an insured wishes to have premium withdrawn from a different bank account for a specific policy, the payment plan for that policy can be set up using a policy number instead of the customer number. The agent should contact Billing Services to make this arrangement.

• If a change modifies premium during a policy term, the withdrawal amounts will change. A new schedule of withdrawal dates and amounts for the remainder of the policy term will be sent to the insured.

• We will make 2 attempts to withdraw any payment. The second time an EFT payment is returned by the bank unpaid, the policy will be set up to cancel and the policy will be changed to a direct bill payment plan for the remainder of the term and an NSF fee charged.

• If an insured wishes to change the withdrawal date, a written request from the agent is required. › A withdrawal date change will not be made if it causes a monthly payment to be missed. › One final withdrawal may be required to complete the payment date change. › Frequent withdrawal date changes will not be accepted

• Monthly Withdrawal Dates – If the selected withdrawal date: › Precedes the policy effective date, the first withdrawal will occur in the third calendar month of

coverage (e.g. withdrawal date is the 5th of the month and policy effective date is 01/15) › Follows the policy effective date; the first withdrawal will occur in the second calendar month of

coverage. › Is identical to the policy effective date, the first withdrawal should be exactly 2 month into the

policy. However, there may be occasions when the withdrawal date chosen and the policy effective date are identical but the first withdrawal is not exactly 2 months into the policy. If this occurs, the agent should call Billing Services to reset the first withdrawal date.

New Business • Complete the EFT authorization form (EFT Agreement, Adv. 419), including the insured’s

signature. › The authorization form must be faxed to 608-825-0322 the same day the application is

submitted.


03/2018 31

› A copy of the void check or deposit slip should be faxed with the authorization form. If the premium deposit is a check from the withdrawal checking account, a copy of that check may be substituted.

› The original EFT authorization form must be kept in your agency files.

• The agent will collect a premium deposit from the insured based on the pay plan selected. The premium deposit will be deposited in the agent’s trust account

› In the Odyssey Payment/Purchase screen, the amount collected will be entered in the down payment field, the appropriate EFT payment plan will be selected, and the with withdrawal day (chosen by the insured on the EFT authorization form) will be entered in the EFT Day field.

› When the application is released, the premium deposit will be swept from the agent’s trust account.

Electronic Funds Transfer (EFT) • If the insured has an existing customer number, the agent should initiate the quote from the client

information screen in order for the Odyssey system to use the existing customer number. Renewals • When a renewal offer is made on a policy already set up on an EFT payment plan:

› All installments will be withdrawn via EFT; no premium deposit is required; › The renewal offer will include a new schedule of withdrawal dates and amounts; › Depending upon the withdrawal date chosen by the insured, the first renewal installment may

have already been withdrawn when the insured receives the renewal offer.

• There are 2 option in which an insured can choose an EFT payment plan:: › By visiting his/her agent; or › By completing the EFT option form sent with auto policy renewal offers, making a premium

deposit and provide avoid check or deposit slip; › Either option requires submission of the authorization form, the premium deposit, and the voided

check in the same envelope to Billing Services

Binding Authority & Application Submission

Binding Authority • Agent binding authority is 7 calendar days from the policy effective date. The application and

required down payment must be uploaded within 7 days of the policy effective date. • Agents have authority to bind coverages in accordance with the guidelines set forth in this

manual. • Qualifying risks may be bound as of the time and date indicated on the fully completed, signed

application and the required premium down payment is paid by the insured. • Effective dates prior to the date the application is signed and bound by the producer are not

acceptable. Similarly, cancellations and policy changes with additional coverage must be placed in effect at the date and time the agent completes the binding document.

› EXCEPTION: If the policy provides automatic extension of coverage, the policy change will not be considered backdated if policy provisions are satisfied (for example, automatic extension of coverage on newly acquired automobiles).


03/2018 32

• Brokered business is not acceptable – All transactions must be made through an agent appointed directly with QBE Farmers Union Insurance.

• Agent cannot bind any risk listed as unacceptable or ineligible in this manual. • All vehicles on which Comprehensive and Collision coverages are being written must be

personally inspected by the agent prior to submitting new business in order to determine the quality and acceptability of the risk. Any existing damages or deficiencies must be noted on the application by the agent.

• Each request for submit for approval will be handled on an individual basis. Submit the request well in advance of needed effective date to allow time for the underwriter to process.

• There is no binding authority for policy rewrites, non-renewed policies, or declined policies.

Binding Authority & Application Submission Severe Weather Binding Authority No new coverage or increase to existing coverage may be bound on any risk or exposure located in an area for which a tornado or other severe weather watch or warning has been posted. Authority to bind is reinstated after the storm and threat of damage has passed. If physical damage coverage is to be written within 48 hours after a watch or warning has been lifted, agent is required to inspect each vehicle to verify that no storm damage has occurred. The application shall note that the required inspection was performed. Material Misrepresentation of Risk Misrepresentation is insurance fraud. We expect applicants to truthfully and fully complete an application for insurance. However, Farmers Union Insurance will utilize information provided both by 3rd party vendors or acquired by additional contact with the insured to validate the accuracy of the information. If misrepresentation is discovered, we might cancel the policy or collect the additional premium due from inception. A misrepresentation may also prevent recovery under the contract if:

• The misrepresentation, omission, concealment, or incorrect statement is fraudulent or is material either to our accepting the risk or the hazard we assume; or

• If we had known the true facts we would not have issued the policy, would have charged a higher premium, or would not have issued the policy with the same coverages or coverage limit.

Completing an Application • The system will prompt you for any missing or required information. • If a quote requires additional information or must be submitted for approval, it will be

referred to an Underwriter for review. You cannot proceed with the application process until the file is released by the Underwriter.

• The system will validate prior carrier through LexisNexis; if a validation report is not obtained, you will need to keep the appropriate proof of prior insurance in your office. You may be prompted to scan or fax the proof documentation.

• The system may obtain a report from LexisNexis to determine whether there are additional drivers in the household. If the report indicates that additional drivers may reside in the household, you should add or list the driver(s) on the policy. If the driver is no longer in the household, comment the policy for underwriting to review.


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• The system will determine if there is an outstanding balance from a prior policy with QBE Farmers Union Insurance. Any outstanding balance will need to be submitted with the new business down payment.

Binding Authority & Application Submission Application Submission • Applications must be sent through Odyssey within the binding authority time-frame (7 days from

the effective date). • The system will prevent you from sending a policy with an effective date that is outside of your

binding authority (greater than 7 days in the past). • The system will prompt you to send any required support or proof documentation. If prompted,

all required supporting documentation must be scanned or faxed within 5 business days. FAX all required documentation to: 303-338-2112.

• If the above required documentation is not received within 5 business days of the upload, the policy will be reissued without the applicable credit or the policy will be canceled. Additional premium due from the removal of any credits will be spread among all future billing installments.

• The signed application and supporting documentation are to be kept in the agency and made available to us at any time for audit purposes.

Agency File Maintenance and Audits We will be performing routine audits on random policy files.

• You will be required to provide file maintenance documentation through a fax audit. • You will receive a list of required documentation that must be faxed to our office no later than the

requested time stated on the audit request. • Failure to submit the documentation will result in a failed audit. • A failed audit could result in a broader agency file audit by a company representative.

Policy Processing and Servicing

Changes • General › Farmers Union Insurance must be notified within 3 days of notification by the primary named

insured of any midterm increase or decrease in exposure (addition/deletion of drivers, vehicles, etc.) so that we may make any necessary changes to the declarations.


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› We will compute changes requiring adjustment of premium during the term of the policy in accordance with the rules and rates in effect as of the inception of the policy using the date of change on a pro-rata basis.

• Coverage Changes - Any request resulting in reduction or deletion of coverage must be signed by the primary named insured and kept in the agent’s office. Examples of changes that require the insured’s signature:

› Deleting a named insured (deleted driver’s signature is also required); › Deleting a vehicle; › Deleting any coverage, raising deductibles, or reducing limits of liability; › All applicable state rejection/selection forms (i.e. PIP, UM/UIM). Changes to BI Coverage levels

will also cause a corresponding change in Uninsured Motorist coverage level unless a new rejection/selection form is received.

Policy Processing and Servicing • Deletion of Liability Election of Liability Coverage for Comprehensive Only - The company

will allow a change to delete liability coverages, if allowed by state statutes, and allow vehicles to be insured for Comprehensive coverage only if the following requirements are met:

› Minnesota state law, liability coverages may not be deleted if a vehicle has a highway title. › Vehicles cannot be one of the following types: Antiques/Classics, Farm Trucks, Motorhomes, or

Miscellaneous Vehicles. These types of vehicles already incorporate seasonal usage. › The vehicle must be inoperative or not registered. Examples of inoperative include a vehicle on

blocks or with the battery removed. › Liability coverages may not be deleted for:

› Single car risks; or › Risks for which an SR-22 filing is in effect; or › Multi-car risks where at least one vehicle does not retain liability coverage.

• Replacement Vehicle › Primary named insured is allowed 30 days to notify the Company or Agent in writing of a

replacement vehicle, if coverage desired is the same as all other vehicles on the policy. › If Comprehensive and Collision coverages are not provided on any other vehicles, any coverage

provided prior to our notification will be subject to a $500 deductible.

• Additional Vehicle › Primary named insured is allowed 30 days to notify the Company or Agent in writing of an

additional vehicle provided the Company already insures all vehicles in the household. If the company does not insure all vehicles in the household, no coverage is provided until Company is notified of the additional vehicle.

› Any coverage provided for Comprehensive and Collision coverages prior to our notification will be subject to a deductible. The deductible will be the higher of $500 or the lowest deductible of any vehicle insured with that coverage.

• Policyholders Moving to Another State › If a policyholder permanently locates to another state where QBE Farmers Union Insurance is

licensed to write business, the present policy will be non-renewed on the expiration date of the policy. If after being reviewed for underwriter acceptability it is determined that the policy


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qualifies to be rewritten, the insured will be referred to the nearest QBE Farmers Union agent for a policy rewrite.

› If a policyholder permanently locates to another state where QBE Farmers Union Insurance is not licensed to write business, the policy will be non-renewed on the expiration date of the policy.

• Premium Adjustments › Premium adjustments as a result of change activity shall be calculated pro-rata and will result in

the adjustment of remaining unbilled installments (each remaining installment adjusted equally). › All premium adjustments reflect rates and rules in force at time of the policy term inception date. › Adjustments are not made mid-term for attained driver age or the addition, deletion or aging of

chargeable violations.

Policy Processing and Servicing • Refund of Surcharged Premium If driving incident points have been assigned in accordance with

one of the following situations, the Company shall refund the insured with the increased portion of the premium generated by the point surcharge. All such refunds shall be the portion due to the surcharge for all policy periods since the inception of the surcharge.

› If points are assigned as a result of an accident and it is subsequently learned that the accident is not-at-fault.

› If points are assigned as the result of a conviction and the conviction is ultimately reversed. › If points are assigned through mistake, carelessness, misinformation or other error. › If the company has established a reserve but no claim was submitted or no lawsuit was filed and

the statute of limitations has run out.

• Renewals › Farmers Union Insurance will send a renewal offer to your customers prior to the policy

expiration. Payments must be made within 5 days of the renewal effective date to avoid receiving a lapse notice. The lapse notice will provide the customer 14 additional days to pay before their coverage lapses.

› We recognize that a large increase in renewal premium can cause significant customer disruption and dissatisfaction. Therefore, we utilize a process which caps renewal premium changes for policies that otherwise would have experienced substantial rate adjustments due to revisions in rating structure and/or product design.

› Renewal term premium increases and decreases will be capped prior to the application of adding violation/accident point surcharges or the loss of discounts/credits.

› This process will take place at every renewal until the policy is rated at the uncapped premium. › We will adjust renewal offers for any additional violations or accidents that occur before the

current policy expiration date

• Cancellations › Effective Time is 12:01 AM on the cancellation date. › Insured Request:


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› Cancellations must be in writing and must include the primary named insured’s signature. Effective date of the cancellation will be the later of the day received by us or insured’s request date whichever is later.

› Earned premium will be calculated pro-rata with the exception: Any coverage or endorsement on which an Earned Premium Clause applies will be handled under the provisions of that clause.

› Non- Payment – Any premium balance due to Farmer Union Insurance of more than $3.00 will cause the policy to be cancelled for non-payment of premium. Earned premium will be calculated pro-rata.

› Company – All Company cancellations will be calculated on a pro-rat basis. › Duplicate/Replacement Coverage

› The effective cancellation date will be the inception date of the duplicate policy. › Proof of duplicate coverage must be submitted with the request or we will be unable to honor

the requested cancellation date. Acceptable proof is a copy of the declarations page of the current carrier showing coverage(s) and effective date.

Policy Processing and Servicing • Installment Payment › If an insured’s payment is returned from the bank due to non-sufficient funds, an NSF fee will be

assessed. › If our bank returns a payment check or upload due to non-sufficient fund in an agency’s account,

an NSF fee will be assessed to the agency’s commission statement for each NSF transaction. › Installment payments received or postmarked

› After the billing due date but before the cancel date will be accepted and the policy will remain in force.

› After the date of cancellation will result in lapse in coverage..

• Reinstatement of Cancelled Policies › Reinstatements of policies with a lapse in coverage are not allowed. If an exception is made and

policy reinstatement is allowed, a reinstatement fee will apply. › Policies that lapse require a new application and down payment.

• Checks not honored by bank › If an agent receives an insured check returned unpaid from the agent’s bank, the agent should

contact Billing Services. The returned check will be processed as an NSF transaction on the insured’s policy. The company will credit the agent’s bank account for the amount of the returned check plus $10.00. The returned check should be sent to Billing Services for filing..

› If any check is returned as dishonored by the bank, a cancellation notice will be issued and the applicant/insured will be billed an NSF fee. To keep coverage in force, replacement of the dishonored check including any NSF Fee, by certified funds(i.e., money order, cashier check) must be received prior to the cancellation date specified on the notice. If payment is not timely and the policy cancels, the insured must re-apply for a new policy. The down payment and any outstanding previous balance for the new policy must by certified funds (i.e., money order, cashier check).

› If a second unpaid check is received, notification will be sent to underwriting to either send cancellation without a reinstatement offer or non-renew the policy.


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• Collections If there is a balance due the Company after cancellation or lapse of a policy, the amount due will be billed. Two reminder letters will be sent to the insured at 25 day intervals. If payment is not received 75 days after the amount due is billed and the amount due is more than $50,000, it will be turn over for collection.

Canadian Financial Responsibility Laws • The Financial Responsibility Requirements of the Canadian Provinces and Territories affect

tourists from the United States. The following is a summary of the requirements:

Province Limits Needed to Satisfy Requirements

Alberta $200,000 Inclusive

British Columbia $200,000 Inclusive

Manitoba $200,000 Inclusive

New Brunswick $200,000 Inclusive

Newfoundland $200,000 Inclusive

Nova Scotia $200,000 Inclusive

Ontario $200,000 Inclusive

Prince Edward Island $200,000 Inclusive

Quebec $50,000 Inclusive (Property Damage only because of No Fault

Saskatchewan $200,000 Inclusive

Northwest Territories $200,000 Inclusive

Yukon $200,000 Inclusive • Upon request the Agent or Home Office can issue a standard Canadian Non-Resident Inter-

Province Motor Vehicle Liability Insurance Card, which is accepted as evidence of insurance by the Canadian authorities.

› If the insured is going to be in Canada for less than 3 weeks no change in policy limits will be necessary.


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› If the insured will be in Canada over 3 weeks or makes frequent trips into Canada, then his policy limits must be adjusted to meet the minimum requirements if they do not already do so.

› To satisfy limit requirements of $200,000 inclusive, the Bodily Injury and Property Damage Liability individual limits must be at least 50/100/100.

› The Provinces of Alberta, British Columbia, Manitoba and Ontario specifically exempt United States visitors from their laws requiring evidence of Financial Responsibility. No Canadian Non-Resident Inter-Province Motor Vehicle Liability Insurance Card is required if these are the only Provinces to be visited. When the insured is in doubt, issue card.

• A supply may be ordered from the Home Office. Be certain, however, that the insurance is in force for the entire period of travel in Canada. Keep a record of all cards you issue. In case of a claim originating in Canada, the Company claims representative will contact you to verify if a card was issued.

Documents

Minnesota Automobile Personal Lines Automobile Manual Rule Manual-MN.pdf · Toll Free: (800) 347.1961 Personal Lines and Farm Lines : 8:00am to 5:00pm MT, Mon-Fri