In April of this year we introduced our homeowner multivariate program.  We have experienced steady retention through its implementation.  We are introducing additional changes to our homeowner program to improve our overall results effective Dec. 1, 2011. 

 

Underwriting / Policy Rule Changes:

·         Minimum Coverage “A” Underwriting Guideline:  We modified our minimum Coverage “A” limit for new business Ultra Home Guardian policies to $300,000.  This applies to our group program. 

·         Multi-Policy Discount:  We are making the application of the Multiple Policy Discount consistent with how it is applied for Life Insurance. 

o   A Home or Personal Auto policy issued with a discount must have the supporting line of business within 31 days, or the discount will be removed back to the inception date. 

o   Our procedure for mid-term cancellations remains the same:  If a Home or Personal Auto policy is cancelled, the Multiple Policy discount will be removed at the next renewal. 

Premium Adjustment: 

·         Overall Change:  The overall rate increase is 2.4%.  The base rate changes include: 

 

o   Ultra Program:                                           12.0%

o   Protector Program:  (HO-3/8)                     3.0%

§  Applies to Group and Non-Group

 

·         Increased Hazard Surcharge:  We increased the hazard surcharge which may apply to a group policy from 100% to 500%. 

 

·         Claims Surcharge:  We increased the level of surcharges in our group and non-group programs as follows: 

 

o   2 Losses:          75%  to 125%

o   3 Losses:         125% to 200%

o   4 Losses:         200% to 500% 

 

These changes will assist us in continuing to be a strong market for your homeowner business.  We thank you for your continued loyalty and thinking of Frankenmuth Insurance on your new business accounts.