Homeowners HO3 Program. Underwriting Guidelines and Rating Manual

Transcription

1 Homeowners HO3 Program Underwriting Guidelines and Rating Manual (877) or (386) Fax (954) Security First Insurance Company I N 10/1/2012, R 10/1/2012

2 TABLE OF CONTENTS Page Number I. Eligibility Underwriting 1.1 Ineligible Risks UW Occupancy/Use UW Roof UW Plumbing System UW Age of Home at New Business Water Damage Coverage UW Townhouse/Row house UW Unusual or Excessive Liability Exposures UW-3 II. Binding Authority 2.1 General BA Prior Insurance BA Binding Suspension Due to Catastrophes BA Previous Cancellations/n-Renewals BA Binding Authority Limits BA-2 III. General Rules 3.1 Policy Term GR Renewal Plan GR Cancellation or Reductions in Limits of Liability or Coverage GR Multiple Company Insurance GR Transfer or Assignment GR Single Building Definition GR Protection Class Information GR Construction Definitions GR Mandatory Endorsements GR-3 to Waiver of Premium GR Premium Rounding GR Annual Dwelling and Other Structures Coverage Adjustment GR-4 IV. Premium Calculation 4.1 General PC Amount of Insurance PC Age of Dwelling PC Total Renovations PC Protection Class/Construction Factors PC Building Code Effectiveness Grading PC-3 to Premium Factors n Base Rate PC Premium Factors Base Rate PC-6 to Distance to Coast Factors PC-9 to 11 Security First Insurance Company TOC-1 N 1/1/2017, R 1/1/2017

3 TABLE OF CONTENTS (continued) Page Number V. Coverage Options 5.1 Deductibles CO Windstorm or Hail Exclusion CO Water Damage Exclusion CO Limited Screened Enclosure and Carport Coverage CO Coverage B Other Structures CO Coverage C Contents CO Increased Section II Liability and Medical Payments Limits CO Personal Injury Coverage CO Ordinance or Law Coverage CO Increased Replacement Cost on Dwelling CO Personal Property Replacement Cost CO Special Personal Property CO Coverage C Increased Special Limits of Liability CO Personal Property Scheduled CO Loss Assessments Coverage CO Limited Fungi, Wet of Dry Rot, or Bacteria Increased Coverage CO Limited Water Damage CO Home Computer Coverage CO Sinkhole Coverage CO Golf Cart Physical Damage and Liability Coverage CO Dog Liability Coverage CO Water Back Up and Sump Overflow CO Additional Insured CO Additional Interest CO Identity Theft or Identity Fraud Expense and Monitoring CO Equipment Breakdown Enhancement Endorsement CO-13 VI. Payment Options 6.1 Full Pay PO Payment Plans PO-1 to Credit Card PO Additional Fees PO NSF Checks PO-2 VII. n- Territory Base Rates BR-1 VIII. Territory Base Rates BR-2 to 5 IX. Territory Definitions by Census Block Group TR-1 to 115 X. Quote Sheet QS-1 to 2 XI. Appendix A WLM Factors for Existing Construction App. A-1 to 12 XII. Appendix B WLM Factors for New Construction App. B-1 to 4 XIII. Appendix C WLM Factors for Concrete Roof Decks App. C-1 XIV. Appendix D Wind Risk UW Factors for Existing Construction App. D-1 to 24 XV. Appendix E Wind Risk UW Factors for Existing Construction App. E-1 to 8 XVI. Appendix F Wind Risk UW Factors for Concrete Roof Decks App. F-1 Security First Insurance Company TOC-2 N 9/1/2017, R 9/1/2017

4 I. ELIGIBILITY UNDERWRITING We reserve the right to deem any of the following rules as satisfied for assumed business. Any data that is not available to the company upon assumption will be applied at first renewal of the policy subsequent to the determination of the information. 1.1 INELIGIBLE RISKS Porches or decks more than 2 feet off the ground or with 3 or more steps leading to them must be protected with properly installed handrails. Homes with open foundations. Factory fabricated, transportable housing units built on a chassis (mobile or manufactured homes). te: Homes with components constructed off-site and assembled on-site which are subject to local and state building codes are acceptable. Properties located entirely over water. Risks with any prior or current Sinkhole activity on the premises whether or not it results in a loss to the dwelling. Homes of unconventional construction including but not limited to Log Homes. Homes with wood shingled roofs. Homes without permanently installed heat source or with wood burning stoves, space heater or fireplaces as primary source of heat. Properties in a state of disrepair or properties with existing damage. Risks with Knob & tube electrical wiring or fuses. Risks with aluminum electrical wiring built prior to Risks with rental exposure. te: a duplex, wherein one side is owner-occupied and the other side is rented is acceptable. Risks insured for less that 100% replacement cost. Homes used for any purpose other than residential. Vacant or unoccupied homes. Swimming pools that are not protected by a locking fence at least 4 ft high or screened enclosure. Spas that are not covered and locked. Risks with a previous property loss (whether or not paid by insurance) in the past 3 years at this or any other location - other than 1 water, fire or theft loss occurring in the past 3 years provided that the amount of loss is less than $10,000. Risks with a previous liability loss (whether or not paid by insurance) in the past 3 years at this or another location. Risks with vicious or exotic animals. Vicious animal is defined as any animal, regardless of breed, that has a negative history including but not limited to biting, snapping, or causing or attempting to cause injury to an individual or other animal. Saddle animals are permitted when there is no business use. Homes with asbestos siding or asbestos roofing material. Homes purchased from a foreclosure, short sale or currently bank owned. Applicants with prior fraud or arson convictions. Buildings under construction or undergoing major renovation. Multiple dwellings on the same parcel with any rental exposure. Applicants with open claims at property location. Security First Insurance Company UW-1 N 1/1/2017, R 1/1/2017

5 1.2 OCCUPANCY/USE The residence must be occupied by the owner (no roomers or boarders). o Primary occupied on a primary basis o Secondary/Seasonal occupied on an intermittent basis Properties with Home Day Care exposure are eligible for this program with evidence of commercial liability coverage and a copy of the State or County Home Day Care license. These documents must be provided each year prior to renewal. 1.3 ROOF Roof must be in good condition. Composition shingle roofs must have been replaced within 15 years. 1.4 PLUMBING SYSTEM Risks with polybutylene and/or galvanized steel pipes may only be written with the water damage exclusion. In order to be eligible for limited water damage coverage, homes with polybutylene and/or galvanized steel pipes will require an inspection including the following: o Age of pipes and remaining useful life (must be at least 2 years) o Condition of pipes (must be above average or better) o o Date of inspection (must be within the past 3 months) Inspector s license information, including license type (either a Florida general contractor or plumbing contractor) and number. 1.5 AGE OF HOME AT NEW BUSINESS WATER DAMAGE COVERAGE Homes over 40 years of age may be written with either limited water damage coverage or excluding water damage coverage. The peril of Water Damage may also be excluded from any risks, at the policyholder s discretion, resulting in a lower premium. In addition to what is automatically excluded in the policy, this endorsement will exclude discharge or overflow of water or steam from within a plumbing, heating, A/C, automatic sprinkler system or from within a household appliance; as well as water penetrating through the roof or exterior walls or windows whether or not driven by wind, unless water penetration is a direct result of damage caused by a Peril Insured Against other than water and not otherwise excluded in this policy. Security First Insurance Company UW-2 N 1/1/2017, R 1/1/2017

6 1.6 TOWNHOUSE/ROWHOUSE Each unit must be separated by parapet walls or adequate masonry firewalls. There may be a maximum of 8 units per building. 1.7 UNUSUAL OR EXCESSIVE LIABILITY EXPOSURES Risks with the following items are acceptable for coverage, however, bodily injury and property damage liability will be excluded for injuries or damage resulting from their use: Trampolines Skateboard Ramps Bicycles Ramps Swimming pool slide Swimming pool diving board Endorsement SFIV HO 09 ELE Unusual or Excessive Liability Exposure applies and is attached to all policies. Additional underwriting guidelines apply to specific endorsements or optional coverages and are contained in the Coverage Options section of this manual (Part V. Coverage Options). Security First Insurance Company UW-3 N 10/1/2012, R 10/1/2012

7 II. BINDING AUTHORITY 2.1 GENERAL Application must be maintained in Agent s office and is subject to audit at request of the company. Risk must meet the Eligibility/Underwriting guidelines. Risk must fall within our binding authority limits. Risks may be written up to 60 days future effective. 2.2 PRIOR INSURANCE Prior property insurance is required. This coverage cannot be forced placed coverage, a liability only policy or a wind only policy. There can be no more than a 30 day lapse in coverage. Newly purchased homes within the past 30 days are exempt from this requirement. Proof of prior coverage or closing documents are required. 2.3 BINDING SUSPENSION DUE TO HURRICANE, TROPICAL STORM, WILDFIRE AND OTHER CATASTROPHES applications for new business or endorsements for increased coverage may be bound, written or issued when binding is suspended. Exceptions for previously scheduled closings may be submitted to underwriting for binding approval. Agents will be notified by bulletin and via our website when binding has been suspended and when the suspension is lifted. Binding may be suspended for the following reasons: Tropical Storm,, Wildfire and Other Catastrophe. 2.4 PREVIOUS CANCELLATIONS/NON-RENEWALS Risks previously canceled for reasons other than reduction of hurricane exposure must be referred to company before binding. Security First Insurance Company BA-1 N 7/1/2015, R 8/1/2015

8 2.5 BINDING AUTHORITY LIMITS Coverage A-Dwelling HO-3 $100,000* to $1,000,000** B-Other structures 2% to 70% of Cov A C-Contents 0% to 75% of Cov A D-Loss of Use E-Personal Liability F-Medical Payments 10% of Cov A $100,000 to $500,000 $1,000 to $5,000 *$125,000 minimum Coverage A in coastal counties. ** Risks exceeding binding limits may be submitted to underwriting for approval. Please contact the underwriting department after you have fully completed an application in our processing system. Additional documentation such as an appraisal may be required. Please allow at least 10 days for the high value underwriting process. Security First Insurance Company BA-2 N 4/15/2011, R 4/15/2011

9 III. GENERAL RULES 3.1 POLICY TERM The standard policy term is one year and may be extended for successive policy periods by renewal. 3.2 RENEWAL PLAN If the company elects to offer renewal, policy may be renewed by the policyholder by paying the renewal premium prior to the expiration of the current policy. Renewal policy will be issued based on the premiums, forms and endorsements in effect at time of renewal. A new declaration page will be issued. 3.3 CANCELLATION, NON RENEWAL OR REDUCTIONS IN LIMITS OF LIABILITY OR COVERAGE Mandatory coverages may not be canceled unless the entire policy is canceled. If insurance is increased or reduced, the additional or return premium shall be computed on a pro-rata basis. The insured may cancel the policy at any time for any reason. We will refund any unearned premium pro rata. Sinkhole loss, 1 water damage loss or property losses that are a result of an act of God will not be used as a cause for cancellation or non renewal unless the insured has failed to take action reasonably necessary to prevent recurrence of damage to the insured property. 3.4 MULTIPLE COMPANY INSURANCE We will not provide coverage for a dwelling that is also covered by another insurance policy. 3.5 TRANSFER OR ASSIGNMENT transfers or assignments are permitted. Each insured and/or property will require submission of a new application. 3.6 SINGLE BUILDING DEFINITION All buildings or sections of buildings that communicate through unprotected openings shall be considered as a single building. Buildings that are separated by space shall be considered as separate buildings. Buildings or sections of buildings, which are separated by a 6-inch reinforced concrete or 8-inch masonry party wall that pierces or rises to the underside of the roof and pierces or extends to the inner side of the exterior wall, shall be considered a separate building. Accessibility between buildings with independent walls or through masonry party walls described above shall be protected by at least a Class A Fire Door installed in a masonry wall section. Security First Insurance Company GR-1 N 4/1/2013, R 4/1/2013

10 3.7 PROTECTION CLASS INFORMATION The Protection Class listings in the Public Protection Classification Manual apply. Use PC 10 for unclassified areas. In a classified area where two or more classifications are shown (e.g. 6/9), the classification is determined as follows: Miles to Fire Station Feet to Hydrant Class Less than 5 Less than 1,000 first PC Less than 5 More than 1,000 9 More than 5 10 Protected Subdivision Rule: A dwelling located in a qualifying restricted subdivision will receive the rating of the responding fire department if ALL OF THE FOLLOWING APPLY: The subdivision is under development with recorded plat and paved roads where dwellings are built by licensed contractors subject to building restrictions as to type and square footage. The subdivision contains at least 10 houses. The subdivision is within 5 miles travel distance of a responding fire department. The home is located within 1,000 feet of a fire hydrant, or responding fire department is equipped to transport water or pump water from swimming pools or other sources within 1,000 feet of the home. Exceptions to the Protection Class listings in the Public Protection Classification Manual will be considered upon review by underwriting. 3.8 CONSTRUCTION DEFINITIONS Frame-exterior wall of wood or other combustible construction, including wood-iron clad, stucco on wood or plaster on combustible supports, and aluminum or plastic siding over frame. Masonry Veneer-exterior walls of frame construction veneered with more than 75% brick or stone. Masonry-exterior walls constructed of masonry materials such as adobe, brick, concrete, gypsum block, hollow concrete block, stone, tile, or similar materials, and floors and roof of combustible construction. Superior Construction-exterior walls, floors, and roof constructed of masonry or other noncombustible materials. te: Mixed (Masonry/Frame)-a combination of both frame and masonry construction shall be classified as Frame when the exterior walls of frame construction (including gables) exceed 25% of total exterior wall area; otherwise classify as Masonry. Hardiplank Siding-Frame homes with Hardiplank Siding shall be classified as Frame but will be given a 5% discount. Masonry Veneer-Frame homes with MasonryVeneer shall be classified as Frame but will be given a 5% discount. Security First Insurance Company GR-2 N 6/1/2014, R 8/1/2014

11 3.9 MANDATORY ENDORSEMENTS 1. HO Homeowners 3 Special Form 2. SFIV HO3 09 SP Special Provision 3. SFIV HO Windstorm Exterior Paint or Waterproofing Exclusion-Seacoast- Florida is attached to all policies that include wind coverage in the following territories: BAY-B ESCAMBIA-B MIAMI-DADE-A PINELLAS-A BAY-D ESCAMBIA-C MIAMI-DADE-B PINELLAS-C BAY-C ESCAMBIA-D MIAMI-DADE-C ST JOHNS-A BAY-A ESCAMBIA-A MIAMI-DADE-D ST LUCIE-C BREVARD-C FLAGLER-B MIAMI-DADE-E SANTA ROSA-D BREVARD-B FLAGLER-A MONROE-A SANTA ROSA-C BREVARD-A FRANKLIN-A MONROE-B SANTA ROSA-E BROWARD-B GULF-A MONROE-C SANTA ROSA-B BROWARD-A GULF-B NASSAU-A SANTA ROSA-A BROWARD-C HERNANDO-B OKALOOSA-D SARASOTA-B BROWARD-D HERNANDO-A OKALOOSA-C SARASOTA-C BROWARD-E INDIAN RIVER-C OKALOOSA-B SARASOTA-A CHARLOTTE-B JEFFERSON-A OKALOOSA-A TAYLOR-A CHARLOTTE-C LEE-C PALM BEACH-A VOLUSIA-A CHARLOTTE-A LEE-D PALM BEACH-B WAKULLA-A CITRUS-A LEE-A PALM BEACH-E WALTON-D COLLIER-A LEE-B PALM BEACH-D WALTON-C COLLIER-B LEVY-A PALM BEACH-C WALTON-B COLLIER-C MANATEE-C PASCO-B WALTON-A COLLIER-D MANATEE-B PASCO-A DIXIE-A MANATEE-A PASCO-C DUVAL-A MARTIN-D PINELLAS-B 4. NO SECTION II LIABILITY COVERAGES FOR HOME DAY CARE BUSINESS LIMITED SECTION I PROPERTY COVERAGES FOR HOME DAY CARE BUSINESS 5. SFIV HO 09 CLP Collapse Coverage 6. SFIV HO 09 DN Deductible tification 7. SFIV HO 09 ED Existing Damage Exclusion 8. SFIV HO 09 ELE Unusual or Excessive Liability Exposures 9. SFIV HO 09 FCE Limited Fungi, Mold or Dry Rot or Bacteria Coverage Endorsement 10. SFIV HO 09 HD Deductible Endorsement 11. SFIV HO 09 OL1 Ordinance or Law Coverage 12. SFIV HO Personal Property Replacement Cost Loss Settlement 13. SFIC PRI Privacy tice 14. OIR B tice of Premium Discounts for Loss Mitigation 15. OIR B Checklist of Coverage 16. SFIV HO 09 OTL Outline of Coverage 17. SFIV HO 09 SDE Secondary/Seasonal Dwelling Endorsement when occupancy is seasonal/secondary. 18. SFIV HO 09 COV Table of Contents HO3 Security First Insurance Company GR-3 N 1/1/2017, R 2/20/2017

12 19. SFIV HO 09 WD Water Damage Exclusion (for homes over 40 years of age at new business and homes with polybutylene and/or galvanized steel plumbing pipes) 3.10 WAIVER OF PREMIUM When a policy is first issued or endorsed after the inception date, additional or return premium of less than $5 is waived. However, we will return unearned premium upon request PREMIUM ROUNDING When calculating premium, adjusted base rates and premiums for each optional coverage are rounded to the nearest whole dollar before summing ANNUAL DWELLING AND OTHER STRUCTURES COVERAGES ADJUSTMENT Dwelling and Other Structures coverage will be reviewed annually and amended for changes in replacement cost based on changes in underlying construction costs. Security First Insurance Company GR-4 N 1/1/2017, R 2/20/2017

13 IV. PREMIUM CALCULATION 4.1 GENERAL This section provides explanation of how premiums are determined and what adjustments are applied to price each risk. Rates for optional coverages follow premium adjustments. Two base rates apply to each territory: and n. Premium adjustments apply to the Base Rate (HUR), the n Base Rate (NHR), or both Base Rates. Premium adjustments are calculated by multiplying the factors provided below by the appropriate base rate (HUR, NHR, or both) to calculate adjusted base rates. Optional coverages that result in additional premium are presented beginning on page CO-1. Additional premiums are presented as a dollar amount, or a percentage of the unadjusted base rates. 4.2 AMOUNT OF INSURANCE Cov A Factor $75, Rates (HUR) The factor for coverage amounts between $75,000 and $350,000 is determined by dividing the desired coverage amount by $75,000. For example, the factor for $125,000 equals 125/75 or For coverage amounts greater than $350,000, the factor is determined by the formula: [(((Coverage A Amount $350,000)*.85)/$350,000)*4.667]. For example, the factor for $500,000 equals [(((500, ,000)*.85)/350,000)*4.667] or n- Rates (NHR) The factor for coverage amounts between $75,000 and $350,000 is determined by dividing the desired coverage amount by $75,000. For coverage amounts greater than $350,000, the factor is determined by the formula: [(((Coverage A Amount $350,000)*.75)/$350,000)*4.667]. For example, the factor for $500,000 equals [(((500, ,000)*.75)/350,000)*4.667] or Security First Insurance Company PC-1 N 7/1/2015, R 8/1/2015

14 4.3 AGE OF DWELLING Age NHR Factor HUR Factor and older Age is determined by subtracting the year in which construction of the residence was completed from the year in which the policy is effective. Security First Insurance Company PC-2 N 7/1/2015, R 8/1/2015

15 4.4 TOTAL RENOVATIONS If acceptable documentation demonstrates that a residence has been totally* renovated, the year in which the total renovation began may be used as the date of construction. Total renovation will require totally new electrical, plumbing (above the slab), heating and A/C, roof and window systems, and must be verified by a certified inspector based on an on-site inspection. *Complete documentation should be submitted to Underwriting prior to binding. 4.5 PROTECTION CLASS/CONSTRUCTION FACTORS Apply to n Base Rate (NHR): Frame Masonry Superior Apply to Base Rate (HUR): Construction Factor Frame 1.00 Masonry.80 Superior BUILDING CODE EFFECTIVENESS GRADING The Building Code Effectiveness Grading Schedule develops a grade 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 may be eligible for special rating adjustments subject to the criteria in this section. In some communities, two Building Code Effectiveness Grades may be assigned. One grade will apply to 1 and 2 family dwellings and the other to multiple unit dwellings. The Public Protection Classification Manual will indicate the application of each grade. The Building Code Effectiveness Grades for a community, and their effective dates, are provided in the Public Protection Classification Manual published by ISO Commercial Risk Services, Inc. Security First Insurance Company PC-3 N 7/1/2015, R 8/1/2015

16 4.6 BUILDING CODE EFFECTIVENESS GRADING (cont.) Community Grading The Building Code Effectiveness Grade 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. 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. Where certificates of occupancy are not issued, reasonable evidence of year of construction will be accepted. If, due to an addition or alteration, the original building is changed to comply with the latest building code, the factor for the community applicable at the time the reconstruction is completed will apply. Communities that decline to participate in the BCEGS Program will be identified as not participating and will receive a premium surcharge, unless they qualify for Individual Grading. 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 indicates the community as not participating. 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 greater than 1, or the community is not participating in the program, exception rating procedures may apply. 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. Ungraded and nparticipating Risks Buildings that do not meet the criteria above for community or individual grading should be coded as Ungraded (99) or n-participating (98). Do not classify as 10. Grade Factor HUR NHR n-participating (98) Ungraded (99) Security First Insurance Company PC-4 N 4/1/2013, R 4/1/2013

17 4.7 PREMIUM FACTORS NON HURRICANE BASE RATE Product of applicable premium factors in this section is applied to the n Base Rate (NHR). Secured Community/Building Credit: (Seasonal/Secondary residences are not eligible for this discount) Factor A single entry leads into the sub-division or Community is protected by 24-hour security patrol hour-manned gates protect all entrances to community or passkey gates protect all entrances to the community..85 Protective Devices Fire alarm reporting to fire or central station.90 or Complete home sprinkler system.85 Complete burglar alarm reporting to police or central station.90 Endorsement HO Premises Alarm or Fire Protection System will be attached when credit applies. Miscellaneous Credit/Debits Senior discount.90 Any named insured has reached the age of 55 Hardiplank Siding discount.95 Masonry Veneer discount.95 Security First Insurance Company PC-5 N 7/1/2015, R 8/1/2015

18 4.8 PREMIUM FACTORS-HURRICANE BASE RATE Windstorm Adjustment Factor When a policy covers the peril of Windstorm or Hail, the risk is adjusted by the Final Windstorm Adjustment Factor (calculation below), and may be eligible for a premium credit up to a maximum of 90%, including BCEG credit, if one or more loss mitigation features or construction techniques exist. Supporting documentation that substantiates the existence of loss mitigation features is required in order to receive a Final Windstorm Adjustment Factor which results in a premium credit. te that when the windstorm protective devices credit applies form HO Windstorm Protective Devices will be attached. For homes built prior to 2002, certification by a registered or licensed design professional is required for the Roof Covering, Roof Deck Attachment and Roof Wall Connection. Homes in the HVHZ will require proof of opening protection. Sale and/or installation documentation is required for all Opening Protection. Please note that Terrain assignments are made on an individual policy basis by Applied Research Associates, Inc. according to surface roughness present on the policies. Generally, the Terrains can be defined as Terrain A B C Description treed suburban/urban exposures suburban exposures open exposures Windstorm Adjustment Factor Calculation Step 1 Look Up WLM and Wind Risk UW Factors Existing Construction Factors (Homes built prior to 2002 without Concrete Roof Decks) Obtain Wind Loss Mitigation Factor from Appendix A. Obtain Wind Risk Underwriting Factor from Appendix D. New Construction Factors (Homes built in 2002 or newer without Concrete Roof Decks) Obtain Wind Loss Mitigation Factor from Appendix B. Obtain Wind Risk Underwriting Factor from Appendix E. Concrete Roof Deck Factors (Homes with Concrete Roof Decks) Obtain Wind Loss Mitigation Factor from Appendix C. Obtain Wind Risk Underwriting Factor from Appendix F. Windstorm Adjustment Factor Calculation Step 2 Initial Windstorm Adjustment Factor Initial Windstorm Adjustment Factor = Wind Loss Mitigation Factor x Wind Risk Underwriting Factor Windstorm Adjustment Factor Calculation Step 3 Opening Protection Interpolation If the insured provides documentation of Basic levels of opening protection an adjustment to the Initial Windstorm Adjustment Factors is made. Basic levels of opening protection correspond to a Missile Level B (4.5 lb 2 x 4 missile at 40 ft/sec) in ASTM E The Protection Interpolated Windstorm Adjustment Factor (R OP) is calculated as: If the risk has Basic Level Opening Protection, then R OP = RH + (RN - RH) * S Security First Insurance Company PC-6 N 6/1/2014, R 8/1/2014

19 Where RH is the Initial Windstorm Adjustment Factor for the risk assuming hurricane level opening protection and RN is the Initial Windstorm Adjustment Factor for the risk assuming no opening protection. S is the interpolation factor from the table below: Opening Protection Terrain A B C Basic Otherwise, ROP = Initial Windstorm Adjustment Factor Windstorm Adjustment Factor Calculation Step 4 Roof Cover Age Interpolation roof cover age (N) is determined as the difference between the year the roof cover was installed and the current year. The loss relativity for an roof cover is adjusted according to the following steps: 1. If the roof cover is 5 years or less in age no adjustment to the loss relativity is applied. 2. If the roof cover material is a bituminous-based product (shingles, membrane, built-up roof) or a wood-based product, the age factor is based on a 15 year period (A) to transition from the to a non- roof cover. 3. If the roof cover material is cement, clay, slate, metal or any other non-bituminous or wood-based material, the age factor is based on a 20 year period (A) to transition from an to a non- roof cover. 4. The secondary factor to transition from an to a non- roof cover is computed as follows: i. Interpolate the loss relativity from the to the non- roof cover using the equations: Δ = Rnon- R R = R + Δ*(N-5)/(A-5), 5 < N A ii. Where Δ = age effect, R and Rnon- denote the Step 3 Protection Interpolated Windstorm Adjustment Factor with and non- roof covers, N = roof cover age in years, and A = to non- transition period (A = 20 for tile, cement, slate, metal and A = 15 for all other materials). iii. For N 5, R = R. iv. For N A, R = Rnon- The Δ value must be determined by calculating two Protection Interpolated Windstorm Adjustment Factors. As an example, consider the Protection Interpolated Windstorm Adjustment Factor for an existing construction risk, Mitigation Zone 2, Terrain C, with non-tile roof cover for a one story, gable, clips, no opening protection, B Deck,, low slope house, which has a non- roof cover Protection Interpolated Windstorm Adjustment Factor of and an roof cover Protection Interpolated Windstorm Adjustment Factor of If the roof cover is 5 years or less in age, the relativity remains As the -roof reaches 10 years in age, the relativity is calculated by R = ( )*(10-5)/(15-5) = At 15 years, R = If N > A, then R = Rnon-. Security First Insurance Company PC-7 N 6/1/2014, R 8/1/2014

20 Windstorm Adjustment Factor Calculation Step 5 Additional Secondary Factors Vinyl Siding(does not apply to Concrete Roof Deck risks) 1.02 Soffits Terrain Wood Other/Unknown A B C These factors should be applied to the Initial Windstorm Adjustment Factor adjusted for Opening Protection in Step 3 and Roof Cover age in Step 4 (if applicable) according to the following formula: R = R x K^(1 R/Rmax) R = updated relativity due to secondary factors, K = aggregate product of Vinyl Siding and Soffit factors, and R = Initial Windstorm Adjustment Factor adjusted for Opening Protection in Step 3 and Roof Cover age in Step 4 (if applicable) and Rmax = maximum relativity. The Rmax is assigned according to the following table: Mit Zone Terrain Rmax 1 or 7 A B C or 6 A B C or 5 A B C A B C The resulting factor is the FINAL Windstorm Adjustment Factor. Application of Windstorm Adjustment Factor The Final Windstorm Adjustment Factor applies to all wind premium. The factor applies to the entire calculated hurricane premium. Five percent of the non-hurricane premium is for nonhurricane wind coverage. Therefore, the Final Windstorm Adjustment Factor applies to five percent of the non-hurricane premium. The n- Windstorm Adjustment Factor is calculated as follows: n-hurr Windstorm Adjustment Factor = * Final Windstorm Adjustment Factor Example: If the Final Windstorm Adjustment Factor calculated above is , the factor is * = 0.97 Security First Insurance Company PC-8 N 6/1/2014, R 8/1/2014

21 Hip Roof If the roof slopes down to meet all walls (like a pyramid), it is considered a Hip Roof. Hip Roof must be verified by photographic documentation. Security First Insurance Company PC-9 N 6/1/2014, R 8/1/2014

22 4.9 DISTANCE TO COAST FACTORS For policies covering the peril of Windstorm or Hail, a Distance to Coast (DTC) factor is applied to the Territory Base Rate to reflect the distance of the risk from the coast. Determine the DTC factor using the following tables and rule: Distance to Coast Factor Calculation Step 1 Assign DTC Grouping Based on the location of the risk, determine the applicable DTC Grouping. County Hurr Terr DTC Grouping County Hurr Terr DTC Grouping Alachua 001-A West Coast Escambia 033-D Panhandle Baker 003-A West Coast Escambia 033-E Panhandle Bay 005-A Panhandle Flagler 035-A East Coast Bay 005-B Panhandle Flagler 035-B East Coast Bay 005-C Panhandle Franklin 037-A Panhandle Bay 005-D Panhandle Gadsden 039-A West Coast Bradford 007-A West Coast Gilchrist 041-A West Coast Brevard 009-A East Coast Glades 043-A West Coast Brevard 009-B East Coast Glades 043-B West Coast Brevard 009-C East Coast Gulf 045-A Panhandle Broward 011-A South East Gulf 045-B Panhandle Broward 011-B South East Hamilton 047-A West Coast Broward 011-C South East Hardee 049-A West Coast Broward 011-D South East Hendry 051-A West Coast Broward 011-E South East Hernando 053-A West Coast Calhoun 013-A Panhandle Hernando 053-B West Coast Charlotte 015-A West Coast Highlands 055-A West Coast Charlotte 015-B West Coast Highlands 055-B West Coast Charlotte 015-C West Coast Hillsborough 057-A West Coast Citrus 017-A West Coast Hillsborough 057-B West Coast Clay 019-A East Coast Hillsborough 057-C West Coast Collier 021-A West Coast Hillsborough 057-D West Coast Collier 021-B West Coast Holmes 059-A Panhandle Collier 021-C West Coast Indian River 061-A East Coast Collier 021-D West Coast Indian River 061-B East Coast Columbia 023-A West Coast Indian River 061-C East Coast DeSoto 027-A West Coast Jackson 063-A Panhandle Dixie 029-A West Coast Jefferson 065-A West Coast Duval 031-A East Coast Lafayette 067-A West Coast Escambia 033-A Panhandle Lake 069-A West Coast Escambia 033-B Panhandle Lee 071-A West Coast Escambia 033-C Panhandle Lee 071-B West Coast Security First Insurance Company PC-9 N 7/1/2015, R 8/1/2015

23 County Hurr Terr DTC Grouping County Hurr Terr DTC Grouping Lee 071-C West Coast Palm Beach 099-F South East Lee 071-D West Coast Pasco 101-A West Coast Leon 073-A West Coast Pasco 101-B West Coast Levy 075-A West Coast Pasco 101-C West Coast Liberty 077-A Panhandle Pinellas 103-A West Coast Madison 079-A West Coast Pinellas 103-B West Coast Manatee 081-A West Coast Pinellas 103-C West Coast Manatee 081-B West Coast Pinellas 103-D West Coast Manatee 081-C West Coast Polk 105-A West Coast Marion 083-A West Coast Polk 105-B West Coast Martin 085-A East Coast Putnam 107-A East Coast Martin 085-B East Coast St. Johns 109-A East Coast Martin 085-C East Coast St. Lucie 111-A East Coast Martin 085-D East Coast St. Lucie 111-B East Coast Miami-Dade 086-A South East St. Lucie 111-C East Coast Miami-Dade 086-B South East Santa Rosa 113-A Panhandle Miami-Dade 086-C South East Santa Rosa 113-B Panhandle Miami-Dade 086-D South East Santa Rosa 113-C Panhandle Miami-Dade 086-E South East Santa Rosa 113-D Panhandle Monroe 087-A South East Santa Rosa 113-E Panhandle Monroe 087-B South East Sarasota 115-A West Coast Monroe 087-C South East Sarasota 115-B West Coast Nassau 089-A East Coast Sarasota 115-C West Coast Okaloosa 091-A Panhandle Seminole 117-A East Coast Okaloosa 091-B Panhandle Sumter 119-A West Coast Okaloosa 091-C Panhandle Suwannee 121-A West Coast Okaloosa 091-D Panhandle Taylor 123-A West Coast Okeechobee 093-A East Coast Union 125-A West Coast Okeechobee 093-B East Coast Volusia 127-A East Coast Orange 095-A East Coast Volusia 127-B East Coast Osceola 097-A East Coast Wakulla 129-A West Coast Osceola 097-B East Coast Walton 131-A Panhandle Palm Beach 099-A South East Walton 131-B Panhandle Palm Beach 099-B South East Walton 131-C Panhandle Palm Beach 099-C South East Walton 131-D Panhandle Palm Beach 099-D South East Washington 133-A Panhandle Palm Beach 099-E South East Security First Insurance Company PC-10 N 7/1/2015, R 8/1/2015

24 Distance to Coast Factor Calculation Step 2 Round Distance to Coast Determine the distance to coast in feet and round to the nearest 100. Distance to Coast Factor Calculation Step 3 Look Up Distance to Coast Factor Based on the rounded DTC from Step 2, the DTC factor will be determined by one of the following possibilities: If rounded DTC is less than 500 feet, the DTC factor is the same as that for 500 feet. If rounded DTC is greater than 5,000 feet, the DTC factor is If rounded DTC is listed in the table, then the factor is read directly. If rounded DTC is between values in the table, then the factor is determined by linear interpolation. DTC (in feet) East Coast Southeast West Coast Panhandle , , , , , , , , , , Security First Insurance Company PC-11 N 7/1/2015, R 8/1/2015

25 V. COVERAGE OPTIONS 5.1 DEDUCTIBLES All policies are subject to a deductible that applies to loss from all Section I perils. The deductible applies on a calendar year basis subject to endorsement form SFI HO 09 HD. In the event of the first windstorm loss caused by a single hurricane occurrence during a calendar year, we will pay only that part of the total of all loss payable under Section I Property Coverages that exceeds the calendar year hurricane deductible. With respect to a windstorm loss caused by the second, and each subsequent, hurricane occurrence during the same calendar year, we will pay only that part of the total of all loss payable under Section I Property Coverages that exceeds the greater of the remaining dollar amount of the calendar year hurricane deductible; or the deductible that applies to fire that is in effect at the time of the loss. For all perils except hurricane (apply to NHR) Amount Factor $ , , , For losses due to Deductible $500 2% Cov A 5% Cov A 10% Cov A $75, , $100, , >$200, Deductibles may be increased at any time during the policy period. Deductibles may only be decreased at the time of renewal. 5.2 WINDSTORM OR HAIL EXCLUSION HO The perils of Windstorm and Hail may be excluded in areas where coverage is available from Citizens Property. Further, we will require this endorsement in some territories based on capacity. In addition, windstorm coverage can be excluded if all named insureds, mortgagees and other insurable interests complete and sign the Option to Exclude Windstorm/Hail Coverage form (SFI FL HO3 EWC). The original form must be sent to the company and a copy provided to the insured. When wind and hail are excluded, apply the following premium factors: NHR: 0.95 HUR: 0.00 Security First Insurance Company CO-1 N 1/1/2017, R 1/1/2017

26 5.3 WATER DAMAGE EXCLUSION ENDORSEMENT SFIV HO3 09 WD Water damage will be excluded for the following risks: Homes over 40 years of age Homes with polybutylene and/or galvanized steel plumbing pipes The peril of Water Damage may also be excluded from any risks, at the policyholder s discretion, resulting in a lower premium. In addition to what is automatically excluded in the policy, this endorsement will exclude discharge or overflow of water or steam from within a plumbing, heating, A/C, automatic sprinkler system or from within a household appliance; as well as water penetrating through the roof or exterior walls or windows whether or not driven by wind unless water penetration is a direct result of damage caused by a Peril Insured Against other than water and not otherwise excluded in this policy. When water damage is excluded, apply the following factors: NHR: 0.90 HUR: LIMITED SCREENED ENCLOSURE AND CARPORT COVERAGE - SFIV HO 09 WSE Provides coverage for loss caused by hurricane to aluminum framing for screened enclosures and carports permanently attached to the dwelling on a replacement cost basis. This endorsement does not provide coverage for screen material or costs associated with removing or replacing screens. This endorsement does not increase the limit of liability for Coverage A. This coverage is available in increments of $5,000 up to a maximum of $75,000. Additional Premium= (Selected Limit / $50,000) X 0.32 X HUR Base X DTC Factor X Lesser of(amount of Insurance Factor, 4.0) 5.5 COVERAGE B OTHER STRUCTURES - HO Insured may select desired coverage limit for other structures located on the residence premises. Other structures may not be rented to others, or used by non related persons for residence purposes. Minimum coverage equal to 2% of coverage A is included in the basic policy. The following additional coverages are available (apply to NHR and HUR): % of Cov Factor A 5% % % % 1.14 If additional coverage B is required beyond the maximum available, 20% of Coverage A blanket limit, specific Other Structures may be added to this policy using endorsement HO te that specific coverage on Other Structures cannot be added unless the 20% blanket coverage has been selected. Sum of coverage provided by blanket and specific coverage B cannot exceed 70% of Coverage A Additional Premium: NHR - $1.33 per $1,000, HUR - $2.67 per $1,000 Security First Insurance Company CO-2 N 1/1/2017, R 1/1/2017

27 5.6 COVERAGE C- CONTENTS Insured must select desired coverage limit for personal property. Coverage C is available in 5% (of Coverage A) increments from a minimum 25% to maximum 75%, or may be excluded entirely. Base rates include contents coverage equal to 50% of Coverage A. % of Cov A Factor HUR NHR 0% % % % Factors for amounts between 50% and 25% or 75% are proportional. te: If the named insured(s) chooses to exclude contents coverage entirely, form SFI 09 CE Option to Exclude Contents Coverage or the Option to Exclude Contents Coverage section of the application must be completed and signed by all named insureds. The original form or signed application must be sent to the company and a copy provided to the insured. 5.7 INCREASED SECTION II LIABILITY AND MEDICAL PAYMENTS LIMITS All policies provide basic limits of $100,000 per occurrence for Coverage E, and $1,000 per person for Coverage F. Additional premium for increased limits in Broward, Dade, Indian River, Martin, Palm Beach and St. Lucie: Coverage E-Liability Coverage F-Medical Payments Limit Additional Premium Limit Additional Premium Option 1 $200,000 $20 $2,500 $6 Option 2 300, , Option 3 500, , Additional premium for increased limits in all other counties not listed above: Coverage E-Liability Coverage F-Medical Payments Limit Additional Premium Limit Additional Premium Option 1 $200,000 $10 $2,500 $6 Option 2 300, , Option 3 500, , PERSONAL INJURY COVERAGE - HO Provides liability coverage for personal injury to others for offenses such as false arrest, detention or imprisonment, libel, slander, defamation of character, invasion of privacy, and wrongful eviction or wrongful entry. Additional premium: $15 Security First Insurance Company CO-3 N 7/1/2015, R 8/1/2015

28 5.9 ORDINANCE OR LAW COVERAGE Provides coverage for increases in cost of reconstruction, repair, or demolition of property that result from local laws or ordinances regulating such. As of 7/1/2015 new business policies and 8/1/2015 renewal policies (except those currently excluding the coverage) will automatically include the 25% of the Coverage A limit as provided by endorsement SFIV HO 09 OL1 and there will be no option to remove coverage. Coverage may be increased to 50% of the Coverage A limit by the addition of endorsement SFIV HO 09 OL2. Additional Premium: 25% Limit (5% of NH Base X Amt of Ins Factor X PC Factor X Age Fac X n-hurr Windstorm Adjustment Factor) + (5% of HUR Base X Amt of Ins Fac X Const Fac X Year Built Fac X Hurr Age Fac X Final Windstorm Adjustment Factor X DTC Factor) Additional Premium: 50% Limit (11% of NH Base X Amt of Ins Factor X PC Factor X Age Fac X n-hurr Windstorm Adjustment Factor) + (11% of HUR Base X Amt of Ins Fac X Const Fac X Year Built Fac X Hurr Age Fac X Final Windstorm Adjustment Factor X DTC Factor) * For Years Built 2002 and newer, the Year Built Factor =.50 in the hurricane calculation, otherwise, the Year Built Factor = This applies to the calculations of OL, IRC, PPRC, and SPPC INCREASED REPLACEMENT COST ON DWELLING SFIV HO 09 IRC This endorsement is intended to cover additional costs of construction that are incurred due to increases in the cost of construction that occur during the policy period. Increased construction cost is normally the result of increased demand relative to supply of labor and materials that can occur subsequent to a catastrophic loss that impacts a substantial number of properties in a region. Additional coverage provided by this endorsement is limited to a maximum of 20% of Coverage A. This endorsement does not cover increased construction costs attributable to laws or ordinances governing construction. Additional Premium: (5% of NH Base X Amt of Ins Factor X PC Factor X Age Fac) + (5% of HUR Base X Amt of Ins Factor X Const Factor X Year Built Fac X Hurr Age Fac X DTC Factor) Security First Insurance Company CO-4 N 1/1/2017, R 1/1/2017

29 5.11 PERSONAL PROPERTY REPLACEMENT COST COVERAGE - SFIV HO Provides for settlement of losses for contents coverage (Coverage C) on a replacement cost basis. As of 7/1/2015 new business policies and 8/1/2015 renewal policies (except those currently excluding coverage) will automatically include this coverage. Additional Premium: (10% of NH Base X Amt of Ins Factor X PC Factor X Age Fac X Cov-C Contents Fac X n-hurr Windstorm Adjustment Factor) + (10% of HUR Base X Amt of Ins Fac X Const Fac X Year Built Fac X Hurr Age Fac X Cov-C Contents Fac X Final Windstorm Adjustment Factor X DTC Factor) 5.12 SPECIAL PERSONAL PROPERTY COVERAGE HO Modifies loss settlement from named to open perils for contents. Additional Premium: (10% of NH Base X Amt of Ins Factor X PC Factor X Age Fac)+ (10% of HUR Base X Amt of Ins Fac X Const Factor X Year Built Fac X Hurr Age Fac X DTC Factor) 5.13 COVERAGE C INCREASED SPECIAL LIMITS OF LIABILITY HO 04 65) The special limits of liability in the policy for jewelry, watches, furs ($1,000) and silverware, goldware, pewterware ($2,500) may be increased as follows: Jewelry, Watches and Furs: The special limit of liability of $1,000 may be increased to a maximum of $5,000, but not to exceed $1,000 for any one article. The additional premium shall be $18 for each $1,000 of increased coverage. Silverware, Goldware and Pewterware: The special limit of liability of $2,500 may be increased to a maximum of $10,000. The additional premium shall be $6.50 for each $1,000 of increased coverage. This coverage is available for primary occupancy only. Endorsement HO Coverage C Increased Special Limits of Liability will be attached if policy includes endorsement HO Special Personal Property Coverage. Security First Insurance Company CO-5 N 7/1/2015, R 8/1/2015

30 5.14 PERSONAL PROPERTY-SCHEDULED SFIV HO 09 SPP Additional risks coverage may be purchased for the following classes of property. Property Rate per $100 Antiques.90 Bicycles 9.35 Cameras & Projection Equipment (non professional) 1.52 Coins 1.80 Fine Arts: breakage Breakage Furs.40 Golfer s Equipment 1.40 Guns: Collectible Fired Jewelry 2.00 Miscellaneous Personal Property 1.00 Musical Instruments (non professional).60 Other Sports Equipment 2.00 Silverware.45 Stamps.80 Underwriting Guidelines: Appraisals or bills of sale with photos included - less than 3 years old must accompany single items worth $2,500 or more, (copy is acceptable). Schedules which total over $35,000 or include individual items worth more than $10,000 should be submitted for approval prior to binding. This coverage is available for primary occupancy only LOSS ASSESSMENT COVERAGE (Increased limits) HO Provides increased coverage for assessments relating to the residence premises. The basic policy includes $1,000 coverage. Security First Insurance Company CO-6 N 6/1/2013, R 6/1/2013

31 5.16 LIMITED FUNGI, WET OR DRY ROT, OR BACTERIA INCREASED COVERAGE SFIV HO 09 FCE The basic policy includes $10,000 coverage for Fungi (Mold), Wet or Dry Rot or Bacteria. Coverage can be increased, at renewal, as shown below. Additional Premium: Optional Increased Limit Premium $25,000 Each covered loss/$50,000 Policy Aggregate $60 $50,000 Each covered loss/$50,000 Policy Aggregate $90 Any request for the $50,000 limit will be on a NON-BINDING basis. An interior inspection may be required to detect the presence of moisture, fungi, mold, wet/dry rot or bacteria within the dwelling. Unacceptable levels or failure to allow the inspection will result in policy cancellation LIMITED WATER DAMAGE COVERAGE SFIVHO 09 LWD Under certain conditions, homes are written with the Water Damage Exclusion. For an additional premium, the policy may be endorsed to provide coverage for sudden and accidental discharge or overflow of water or steam from within a plumbing, heating, A/C, automatic sprinkler system or from within a household appliance. The limit of liability for all covered property under this option is $10,000. Additional Premium: NHR: 8% surcharge (1.08 factor) This coverage is not available for risks with polybutylene and/or galvanized steel pipes without and accepted inspection HOME COMPUTER COVERAGE SFIV HO 09 HC Provides coverage for computers and related equipment against additional risks of physical loss subject to certain exclusions. In addition, this endorsement permits business use of a personal computer. This coverage is available to a maximum limit of $20,000. Additional premium: $6 for each $1,000 Security First Insurance Company CO-7 N 10/1/2012, R 10/1/2012