WGIC-806 TX (01/01/2015) (rev. 12/12/14) 1

HOME STATE COUNTY MUTUAL INSURANCE COMPANY

WESTERN GENERAL AUTOMOBILE

LAREDO PHYSICAL DAMAGE & LIABILITY INSURANCE

INCLUDES LIMITED COVERAGE PROGRAM

GUIDELINES

Texas

Administered By: Western General Insurance Services

Calabasas, CA

effective 01 15 2015

WGIC-806 TX (01/01/2015) (rev. 12/12/14) 2

PHONE/FAX DIRECTORY AND MAILING INFO 3

ON-LINE 24/7; WEBSITE INFORMATION 4

MOTORCLUB MEMBERSHIP – ROADSIDE ASSISTANCE 5

PROGRAM OVERVIEW 6RULES MANUAL 7 Fees 7 Coverage Limits 7 Coverage Information 8 Additional Coverages 9 Acceptable Applications 9

RATING RULES 11 Marital Status 11 Driver / Vehicle Assignment 11 Driver / Vehicle Rating 11

DRIVER RULES 12 Unacceptable Drivers 12 Driver History Rating 12 Driving Record Point Surcharges 14 Financial Responsibility Filings 15

VEHICLE RULES 16 Prohibited Vehicles 16 Vehicle Surcharges 17

SURCHARGES 18DISCOUNTS 18

POLICY SERVICE 20 Cancellations 20 Reinstatements 20 Renewals 20 Policy Change Requests 20 Binding Rules 21

TABLE OF CONTENTS

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WGIC-806 TX (01/01/2015) (rev. 12/12/14) 4

WESTERN GENERAL ON-LINE 24/7

PRODUCER POLICY MANAGEMENT:

www.WesternGeneral.com

Our Web-based Policy Management System offers producers a multitude of options to service their customers:

Policy Changes Accepted Online Real time Quotes for all Endorsements Policy Status Inquiry Policy Reinstatements Online Cancellation Requests VIN verification and Driving Record reports reduces future follow up and service Print Dec page and ID cards Online

Billing and Payment Capabilities:

View Payment History Submit Payments from either producer or customer accounts Payments Methods: credit/debit card, checking and savings accounts Add customer EFT for future payments

Agency Reports:

Production Reports (coming soon) Cancellation Reports Bank Activity Reports (coming soon)

CUSTOMER CENTER:

www.myWesternGeneral.com

Customers may manage their account utilizing the following services:

Check status on their policy View Payment History Make a payment Reinstate a canceled policy Manage Electronic Funds Transfers (EFT)

o Enroll in EFT o Change account information

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TOWING / MOTOR CLUB MEMBERSHIP

As an option, in lieu of additional towing and labor, a Motor Club Membership may be purchased in conjunction with this insurance policy. The annual cost of $72 (spread throughout the plan) will be billed congruent with the down payment and monthly installments. The Motor Club Membership is a separate contract with the Membership service provider and is in no way part of this insurance policy. It may be canceled at any time independent of your insurance needs.

Benefits typically include the following, but are subject to change. See contract for complete details. 24-HOUR TOLL-FREE EMERGENCY ROADSIDE ASSISTANCE Towing Battery service Flat tire assistance Gasoline, Oil, Fluid and Water Delivery Service Lock-out service

ADDITIONAL BENEFITS: $50 AMBULANCE SERVICE REIMBURSEMENT $1000 CAR THEFT REWARD SECURITY CREDIT CARD REGISTRATION TRIP ROUTING / MAPPING RECREATIONAL VEHICLE RENTAL DISCOUNTS CAR RENTAL DISCOUNTS AUTOMOTIVE PARTS AND SERVICES DISCOUNTS FLOWERS AND GIFTS DISCOUNTS THEME PARK and ATTRACTIONS DISCOUNTS

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LAREDO PROGRAM OVERVIEW

FEES (fully-earned) page Policy Fee 6 and 12 Month Terms $10 monthly

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Policy Fee 3-Month Term $15 monthly

Installment Fee $5

Late Payment Fee $5

Endorsement Fee $5

Reinstatement Fee $20

NSF Fee $25

Texas Fraud Prevention Fee $2 per vehicle per year

Financial Responsibility Filing (SR-22) Fee $20

COVERAGES, LIMITS, DEDUCTIBLES, ENDORSEMENTS page Liability Bodily Injury 30,000 / 60,000

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Property Damage 25,000 Uninsured Motorist 30,000 / 60,000 Uninsured Motorist Property Damage $25,000 ($250 deductible applies)

PIP 2500

Medical Payments 500 1000 Other than Collision and Collision ((may be written without liability coverage)

500 / 500 1000 / 1000

1500 / 1500 Rental Car Reimbursement * included in policy: $20 per day for a maximum of 30 days for theft

9 additional coverages: Up to $35 per day

Special Equipment (limited to $2000 in value)* 14.4% of special equipment value annually

Towing / Motorclub Membership available for $72 annually 5

ELIGIBILITY CRITERIA page Driver Eligibility Maximums (per driver) No more than 10 points. 12

SURCHARGES page Driver License Status/Type Varies 12

Business Use 15%

18 Rebuilt Salvaged Vehicles 25%

Salvaged Vehicles 100%

Unacceptable Driver or Vehicle 100%

DISCOUNTS page Anti-Theft Discount 5% (on OTC only)

18-19

Clean Driver Discount 5% BI/PD, 15% OTC/CL

Homeowners Discount 10%

Renewal Discount 15%

Transfer Discount 15%

Multi-Vehicle Discount If applicable, a varied discount applies.

* Individual vehicle’s coverage MUST include OTC/Coll in order to purchase this coverage.

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RULES MANUAL

Policy Fee 6 and 12 month term: $10 monthly 3-month term: $15 monthly

Financial Responsibility Filing Fee

$20

Installment Plan Fee $5 Late Payment Fee $5 Endorsement Fee $5 Reinstatement Fee $20: applies when an insured elects to

reinstate coverage after a lapseNSF Fee $25: if any premium payment is dishonored by

the Financial Institution

Automobile Burglary and Theft Prevention Authority Fee (ABTPA)

$2.00 annual charge per vehicle

FEES

All fees are fully earned.

LIABILITY LIMITSBodily Injury 30,000 / 60,000

Property Damage 25,000PIP 2,500MED $500

$1,000UM/UIM-BI 30,000 / 60,000UM/UIM-PD * 25,000COLLISION and 500 / 500OTHER THAN COLLISION 1000 / 1000DEDUCTIBLES 1500 / 1500

COVERAGES

* The deductible for UM/UIM PD, when issued without OTC/Coll coverage, is $250.

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COVERAGE INFORMATION Coverage under this policy deviates from the Standard Texas policy as follows:

“LAREDO STANDARD” POLICY COVERAGE INFORMATION: PD.HSCM.2006 PHYSICAL DAMAGE ENDORSEMENT: The Company will pay the cost to restore your covered auto to its pre-loss condition. YCA.HSCM.2013 NEWLY ACQUIRED AUTOMOBILE ENDORSEMENT: Coverage for a newly acquired auto will have the broadest coverage we now provide for any auto shown in the Declarations. Coverage will begin on the date you become owner (you must ask us to add the newly acquired auto within 20 days if it is in addition to the autos shown in the Declarations). The newly acquired auto will have the same coverage, including the applicable deductible that applied to the auto it replaces, if you notify us within 20 days after you become the owner of the newly acquired auto. If the policy does not have physical damage (Part D) coverage, then it will only have it if you notify us within 20 days after you become the owner of the newly acquired auto. DF.HSCM.2006 DELIVERY OF PERSONS AND PROPERTY FOR A FEE ENDORSEMENT: This endorsement provides that there is never coverage while the automobile is being used for the delivery of goods or persons for compensation or a fee. AT.HSCM.2006 AUTOMATIC TERMINATION ENDORSEMENT: If someone other than you or a family member who is listed in the Declarations becomes the owner of the auto, coverage for that auto will automatically terminate. CIRP.HSCM.2010 CRIMINAL OR INTENTIONAL ACTS – RENTED PROPERTY AND NON-OWNED AUTO ENDORSEMENT: No coverage is provided for any person or your covered auto for damages related to: intent to injure person or property; a willful or intentional act by or at the direction of you, a family member or anyone with your express or implied permission. Commission of a felony also voids policy coverage. PUN.HSCM.2008 PUNITIVE DAMAGES EXCLUSION: This endorsement eliminates coverage for punitive or exemplary damages from the policy. CL.HSCM.2006 CONTRACTUAL LIABILITY EXCLUSION ENDORSEMENT: Liabilities assumed solely on the basis of contractual agreements that may involve an auto liability policy are excluded. OOS.HSCM.2006 OUT OF STATE COVERAGE ENDORSEMENT: This endorsement provides that compulsory insurance laws for non-residents in other states or provinces will be honored as to liability coverage, but not as to first party coverages, such as no-fault, that may be required by the other state or province. ST.HSCM.2006 STORAGE ENDORSEMENT: This endorsement includes a requirement that provides for authorization for the company to move a damaged vehicle to a storage facility of its choice at its expense. MF.HSCM.2010 MISREPRESENTATION OR FRAUD ENDORSEMENT: This endorsement provides notice that no coverage will be provided and that the policy may be voided where there has been fraud or material misrepresentation of facts during the course of establishing the insurance contract, amending the insurance contract or during the pursuit of a claim. RP.HSCM.2006 RENTED PROPERTY AND NON-OWNED AUTO ENDORSEMENT: There is no liability coverage for any person for damage to property, including a rented or borrowed vehicle that is rented to, used by, or in the care or custody of that person. This exclusion does not apply to a rented residence or private garage. Damage to a non-owned auto that is in your care and custody may be covered under Part D. of the policy as excess to any other insurance, subject to a deductible. If you rent an auto you should notify the rental company of this change to your policy, as there may be optional coverage that you can purchase from such company. WGIC-942 UNLISTED DRIVER ENDORSEMENT: If a covered collision loss occurs while your covered auto is being driven by a resident of your household other than you or a person listed on the Declarations page as a covered driver, the deductible applicable to that loss shall be $2,500. There shall be no Collision coverage if a covered collision loss occurs while your covered auto is being driven by anyone not a resident of your household and not listed on the Declarations, regardless of whether you have given permission to such individual to drive your covered auto.

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ADDITIONAL COVERAGES AVAILABLE SPECIAL EQUIPMENT

We will insure a TOTAL AGGREGATE MAXIMUM VALUE of $2000. Premium will be charged at 14.4% annually of the total value of the special equipment. Receipts for special equipment must be maintained in producer’s file. Items not listed below do not qualify for special equipment coverage. All of the following types of special equipment must be declared on the application in order for the coverage to be valid:

1. Customized interior 2. Customized paint, or decoration 3. Customized lights, chrome plating, and spoilers 4. Non-factory installed wheels, including mag wheels 5. Non-factory installed tires 6. Non-factory installed tape deck and/or AM/FM radio 7. Non-factory installed amplifier and/or equalizer 8. Non-factory installed compact disc players 9. Non-factory installed speakers 10. Non-factory DVD players, or video monitors

There is no automatic coverage for Special Equipment listed above unless declared on the application or added by endorsement and accepted by the company. Qualifying Special Equipment coverage can be added mid-term once the special equipment is declared and a premium has been received by the company. Total maximum value is $2,000. Physical damage deductibles apply.

Targa tops and T-tops will have a charge of $60 annually for each item. Coverage for targa tops and T-tops cannot be excluded and a premium must be charged.

The lowest allowable deductible for Special Equipment coverage is $500/500.

TRANSPORTATION EXPENSE REIMBURSEMENT Included for all vehicles with Other than Collision coverage the company will reimburse up to $20 per day, with a maximum amount of $600 (30 days) only in the event of theft of the insured vehicle (refer to policy for complete coverage details.) Note: if an option, below, is chosen, all vehicles with other than collision/collision coverages will receive the same endorsement. Rental Reimbursement Coverage Endorsement may be added: If any of the following additional coverage options are chosen (endorsement #523c), all vehicles with Other than Collision and Collision coverages must include the same additional coverage:

Option 1: Up to $20 per day reimbursement, with a maximum amount of $400 (20 days) in the event of collision of the insured vehicle AND up to $20 per day reimbursement, with a maximum amount of $600 (30 days) in the event of theft of the insured vehicle ($5 additional premium per month per vehicle with Other than Collision and Collision coverage).

Option 2: Up to $35 per day reimbursement, with a maximum amount of $1050 (30 days) in the event of theft

and a maximum of $700 (20 days) in the event of collision of the insured vehicle ($8 additional premium per month per vehicle with Other than Collision and Collision coverage).

ACCEPTABLE APPLICATIONS Applications must be completed in their entirety. Final decisions with respect to acceptance of risk, underwriting, rating, etc., are reserved by the company.

All insured vehicles must be garaged at the same location (exceptions: students away at school and active military personnel).

Producer is responsible to have insured sign and/or initial all appropriate areas of the application, endorsement disclosures, endorsement exclusions, waivers, and any other applicable document. Producer must maintain the original signed documents and all supporting documentation (including copies of driver licenses, VIN verification documentation, signed exclusions, signed waivers, signed disclosures, proof of non-fault/non-injury, photos of all vehicles with damage and all vehicles more than 20 years old, etc.) in their file for a minimum of five years after policy termination or until any open claim associated with a particular policy file is closed (whichever is later). The Producer will reimburse the general agent or carrier for any claims which must be paid because of the producer’s failure to retain the necessary signed or initialed documents.

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Producer must produce original applications and documentation for company’s claim review or audit upon request.

The company will not bind coverage without dated signatures from the applicant and producer prior to submission. Both the named insured and producer warrants that the information on the application is true and correct to the best of their knowledge. (See Binding Procedures on page 20 for more details.)

LIST OF REQUIRED INFORMATION 1. Correct driver name, license number and state of issue for all drivers. MVRs and CLUE Reports may be

ordered on all drivers to determine eligibility and proper surcharge points. Appropriate charges will be made for incidents found on third party reports but not included on the application.

2. The following persons must be listed on the application as drivers or excluded from coverage: a. Household members 14 years old and older b. Registered owners c. Spouses

3. Correct year of vehicle and complete vehicle ID numbers for all vehicles. 4. Correct limits and coverages. 5. Exact dates for all accidents and violations. 6. Signed waivers, exclusions, and disclosures. 7. Payment plan and proper gross premium. 8. Loss payees and additional insureds. 9. Employment information, including type of occupation, is mandatory on all applications that include coverage

for business use. 10. Financial Responsibility Filings (SR-22 filings) are available for named insureds and named operators.

Producers have authority to issue filings in Texas only. SR22(a) filings may not be written. 11. If the following information is not supplied by the Applicant or available from the Applicant’s driving record, the

company will, at its discretion, cancel the policy or charge unverifiable license surcharge points and use the following rating factors: a. Date of Birth – 18 years of age b. Gender – Male c. Marital Status – Single

GENERAL INFORMATION 1. Policy terms may be written for three (3), six (6), or twelve (12) months. 2. Persons under 18 years of age may not be the applicant/named insured. 3. We will write up to 8 vehicles and 6 drivers per policy. 4. Stated amount policies are not available. 5. Physical Damage only or Liability only policies are acceptable. Limits of liability must be the same on all

vehicles. 6. UM limits may not exceed liability coverage limits. 7. Final decisions with respect to acceptance of risk, underwriting, rating, etc. are reserved by the MGA or

company. 8. ISO symbols will be used for rating purposes. 9. Lienholder’s Physical Damage deductible is the same as the insured’s deductible as listed on the declarations

page. 10. The deductible for UM PD is 250/250. 11. Pay plans include the full-pay option and various installment bill plans, including a monthly pay option. Please

contact our Marketing department or refer to your automated rater for details. 12. The Company may cancel or rescind the policy in accordance with state insurance or contract laws, or collect

the additional premium due from inception should misrepresentation be discovered. 13. Company and/or MGA reserves the right to suspend binding (including reinstatements), adding, or increasing

Physical Damage coverage whenever the National Weather Service issues or has issued a hurricane, tornado, flood, or hailstorm watch or warning covering a specific area.

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RATING RULES MARITAL STATUS DETERMINATION: All drivers listed as “married” on the application or added by endorsement will be rated at the “single” rate until and unless their spouse has been either listed as a driver or excluded from coverage.

“Married” means the driver is legally married or separated (spouse must live in the same household and be listed as a driver or excluded from coverage).

“Married” does not include: ▪ divorced, or

▪ widowed

Producer must retain proof of marital status in File. Proof of marriage is subject to verification. Acceptable proof of marriage is a Certificate of Marriage, or in the case of Common Law Marriage, a Declaration of Marriage or proof of all of the following:

The couple agrees to be married; and The couple lives together as husband and wife; and The couple tells other people that they are married.

DRIVER / VEHICLE ASSIGNMENTS: The rate is determined by assigning the highest rated operator to the highest rated vehicle, second highest rated driver to the second highest rated vehicle, etc. If there are more vehicles than drivers, rate the driver class for excess vehicles using the excess vehicle (EV) factor and use the lowest factors for all other driver-related characteristics. The Clean Driver Discount will apply to excess vehicles if all drivers on the policy qualify for the discount. Additional rates will not be generated for drivers in excess of the number of vehicles. DRIVER / VEHICLE RATING MATRIX: A discounted factor can only apply when all vehicles are insured under this program and garaged at the same location (Note: the factor also applies to a student attending school in Texas, or to military personnel stationed in Texas). Factors are determined by the number of drivers and vehicles on the policy, as well as assigned driver marital status and gender. All excess vehicles will be rated using the multi-vehicle rating factor for Excess Vehicles. VEHICLE SYMBOL DETERMINATION: This program uses ISO symbols to determine rate. If a vehicle’s symbol is not yet available, we will use ISO’s conversion methods to determine symbol.

VEHICLE AGE DETERMINATION: For all policies written on or prior to September 30th of a given year, the Current Vehicle Year is the same year of the effective date year of the policy. If the effective date is after September 30th, but on or before December 31 of the same year, the Current Vehicle Year is the effective date year plus one. All model years newer than current year will get the Current year rate.

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DRIVER RULES UNACCEPTABLE DRIVERS The following drivers are unacceptable for this program. UNACCEPTABLE DRIVERS INSURED ON THE POLICY WILL BE SURCHARGED AN ADDITIONAL 100% ON ALL COVERAGE PREMIUMS. 1. Any person under the Texas minimum legal driving age requirement. 2. Any person with a currently revoked driver license. 3. All persons without a Foreign Driver license or Matricula Consular Card that cannot provide the company with

a verifiable US driver license (exception: persons with a verifiable Texas ID) 4. Drivers convicted of insurance fraud. 5. Drivers convicted of felony/manslaughter involving a motor vehicle. 6. Drivers convicted of a felony. 7. Drivers who do not primarily reside in Texas (except military personnel who garage the vehicle in Texas). 8. Drivers 70 years of age and over. 9. Drivers rated with more than 10 points in the last 36 months. Note: This 10 point limit includes all violation

point surcharges, below. 10. Drivers with more than 2 at-fault accidents, including accidents involving pedestrians. 11. Drivers with more than one (1) DUI or Major Conviction, or a combination of DUI and Major Conviction within

the last 10 years. 12. Drivers under the age of 25 with a major violation or alcohol/drug-related violation. 13. A total of three or more at-fault accidents, all operators combined. DRIVING HISTORY RATING VIOLATION POINTS RULES: 1. To determine eligibility and properly surcharge points, we may order an MVR and C.L.U.E. Report for every

listed driver. Please encourage the applicant to fully disclose all driving records to avoid the need for premium adjustments or cancellations. Appropriate charges will be made for incidents not included on the application.

2. Rate each driver with his or her own points. Do not combine driver’s points. 3. Listed drivers under the age of 16 years old must have a valid license or learner’s permit. They will be rated at

the 16 year old rate and surcharged as an Unacceptable Driver (see above). 4. We count all driving record point surcharges for the past 36 months. We use violation date(s) on driving record

for chargeability. Note: The word “violation” includes a plea of guilty, forfeiture of bond, or Failure to Appear (F.T.A.).

5. For multiple point charges arising out of one occurrence, use only the highest charge involved. Exception: If At-Fault Accident and DUI/DWI occur at the same time, we will charge for both.

6. There will be no points charged for minor moving violations incurred by the insured/driver (whose job is the operation of the motor vehicle for compensation) during the hours of employment. The insured must submit a written declaration, under penalty of perjury, that the insured was operating a motor vehicle for compensation during the hours of employment at the time the conviction(s) was incurred.

7. A policy will not be re-rated or reclassified for point charges that are added or expire during the policy term. DRIVER LICENSE SURCHARGES Rated drivers without a Valid US license are subject to the following surcharges and will be ineligible for the Safe Driver Discount:

1. Drivers with a Suspended driver license will incur a 50% surcharge. 2. Drivers with a Learner’s permit will incur a 50% surcharge. 3. Drivers with a Foreign License or Matricula Consular will be surcharged 5% on liability and 50% on physical

damage. 4. Drivers without a Texas License but can provide a verifiable Texas ID card will be surcharged 50%.

AT-FAULT and CHARGEABLE ACCIDENTS 1. An accident is considered chargeable if the driver’s actions or omissions were at least 50% of the proximate

cause of the accident, and in accidents not resulting in injury or death, if the total loss or damage to one party caused by the accident exceeded $750.

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2. Accidents will not be considered chargeable if the named insured/driver demonstrates: a. Their auto was lawfully parked (not including parked vehicles which roll from a parked position). b. The vehicle was struck in the rear by another vehicle and the driver was not convicted of a moving violation

in connection with the accident. c. The accident is one in which judgment or reimbursement is obtained from other party, providing the

Company makes no liability payment on behalf of the insured. d. The driver was not convicted of a moving traffic violation and the operator of another vehicle involved in the

accident was convicted of a moving traffic violation. e. The driver’s vehicle was damaged as a result of contact with a vehicle operated by a “hit and run” driver

operator of another vehicle and the accident was reported to legal authorities within 24 hours. f. The accident resulted from contact with an animal, bird, or falling object. g. The driver was responding to a call of duty as a paid or volunteer member of any police, fire, or first aid

squad or any law enforcement agency while performing any other governmental function in a public emergency.

h. The accident was a solo vehicle accident that was principally caused by a hazardous condition of which a driver, in the exercise of reasonable care, would not have noticed.

i. All disclosed accidents should be reported as either “at-fault” or “not at-fault”. All non-disclosed or unreported accidents will be considered “at-fault”.

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DRIVING RECORD POINT SURCHARGES

License-Related 1st Add'l. Minor Moving Violations ** 1st Add'l. Failure to Display Driver License 2 3 Change Lanes When Unsafe 1 2 Driving While License Suspended 4 3 Disregard Flashing Red Signal 1 2 Driving While License Expired 2 3 Disregard No Passing Zone 1 2

Possess Deceptive Driver License 2 3 Disregard Traffic Control Device 1 2

Possess More Than 1 Drivers License 2 3 Drove on Sidewalk 1 2 Unlawful Display of Driver License 2 3 Drove on Wrong Side of Road 1 2 Use of Illegal Driver License 2 3 Drove Wrong Way 1 2

Violate Driver License Restriction 2 3 Failure to Control Speed / Vehicle 1 2

Accidents / Accident-Related 1st Add'l. Failure to Stop for a School Bus 1 2

At-Fault Accident 2 6 Failure to Yield Emergency 1 2 Accident with Pedestrian 2 6 Failure to Yield Right of Way 1 2

Non-Fault Accident 0 0 Illegal Backing, Passing or Turning 1 2

Alcohol / Drug Related Violations 1st Add'l. Ran Red Light 1 2 Consuming Alcohol While Driving 4 6* Ran Stop Sign 1 2 DWI / DUID 4 6* Speeding 1 2 Open Container 4 6* Turning Across Divided Section 1 2

Possession of a Controlled Substance 4 6* Turning Left / Right From Wrong Lane 1 2

Refusal of Breath Test 4 6* Turning When Unsafe 1 2 Other Major Violations 1st Add'l. Unsafe Speed 1 2 Assault with Auto 5 6* Wrong Side of Road 1 2

Fleeing from Police 5 6* Hands-Free / Mobile Device Violation 1 2

Hit and Run 5 6* All Other Moving Violations 1 2 Involuntary Manslaughter 5 6* Miscellaneous Violations Each Leaving Scene of an Accident 5 6* Defective Brakes 1 Murder with a Motor Vehicle 5 6* All Other Defective Equipment 0 Negligent Collision 5 6* Disobey Police Order 1 Negligent Homicide 5 6* No Seat Belt 0

Racing 5 6* Child Passenger Safety Seat Offense 1

Reckless, Negligent Driving 5 6*

Overheight / Overlength Vehicle 1

Intermediate Violations 1st Add'l. Parking on Roadway 1 Careless Driving 3 6 Unsafe Start, Unsafe Park, etc. 1

Excessive Acceleration 3 6 No Motor Vehicle Liability Insurance 1

Inattentive Driving 1 * Unacceptable risk in this program. ** Each additional Minor Moving Violation (same type or not) will be charged 2 points.

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FINANCIAL RESPONSIBILITY FILINGS (SR FILINGS) 1. Filing will be made for drivers in the State of Texas only. 2. Producers have authority to electronically issue financial responsibility filings for our insureds on behalf of the

company. Named insured and named operators filings only. 3. A copy of the filing must accompany the application. 4. The producer will reimburse the company for any claims paid as a result of a filing made for a person for

whom coverage was not properly bound with the company. 5. All vehicles owned by the insured must be insured by this company to make that individual eligible for a filing. 6. $20 filing fee per filing. 7. SR22(a) filings will not be issued.

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VEHICLE RULES

ELIGIBILITY Private passenger automobiles, pickups and vans owned by or leased to the insured and garaged in Texas for commuting and pleasure use are acceptable. There is no coverage when a vehicle is being used for commercial use. If Commercial use is discovered by the company, the policy may be rescinded. Commercial use means uses relating to or connected with any artisan, business, or trade, or the exchange, buying, or selling of goods or services. Salvaged vehicles are acceptable and all lines of coverage will be surcharged.

PROHIBITED VEHICLES The following vehicles are ineligible for any line of coverage, whether at new business, as an additional vehicle, or as a replacement vehicle because they are not private passenger-type vehicles insurable under a private passenger policy. Applications and endorsement requests which include the following vehicles will be rejected.

1. Ambulances, Police, Fire or any Emergency or law enforcement vehicle(s). 2. Catering Trucks, Flat beds or stake beds. 3. Specially built vehicles, including: kit cars, dune buggies, Baja bugs. 4. House cars. 5. Replica cars. 6. Show cars. 7. Motor homes or travel trailers. 8. Farm vehicles. 9. Vehicles with more or less than 4 wheels. 10. Commercial vehicles. 11. Any public or private livery transportation (example: limousines, taxis, buses, church vans or van pools).

UNACCEPTABLE VEHICLES The following vehicles are unacceptable. Applications which include the following vehicles will be rejected. Should these vehicles be added by endorsement during the policy period, the BI, PD, Med Pay, PIP, OTC and COLLISION premiums for the following vehicles will be incur a 100% unacceptable vehicle surcharge.

1. Vehicles not registered in Texas within 30 days of residency, except for qualifying military personnel. 2. Vehicles registered to any business or corporation. 3. Vehicles carrying explosives or flammables. 4. Antiques, Classics, Limited edition (low production) or Exotic. 5. Vehicles more than 40 years old for any coverage. 6. Vehicles more than 20 years old for physical damage coverage. 7. All vehicles with an Actual Cash Value (not including tax & License) in excess of $65,000. 8. Vehicles with model year 2010 and prior with Collision ISO symbol higher than 22. 9. Vehicles with model year 2011 and later with Collision ISO symbol higher than 53. 10. All Vehicles performance rated “P” or “S” by ISO 11. Vehicles NOT manufactured for sale or distribution in the US (Gray market vehicles). 12. Custom, rebuilt, altered and or modified vehicles (structurally or mechanically) including vehicles with lift

kits. 13. Corvettes or other vehicles with fiberglass or composite bodies. 14. Vehicles with load capacity of one ton or more. 15. Vehicles used for:

a. Racing, off road or speed contests. b. Mail, parcel post, floral, retail food or beverage delivery, messenger or courier service, process

servers or any type of delivery. c. News dealers, including newspaper delivery and distribution. d. Short term rentals. e. Vehicles used for driver training or any form of driving instructions, or used for transportation of

school children, or in conjunction with a business that provides services for babysitting, daycare, nursery school or school children transport.

f. Snowplowing for hire. 16. Pickups and vans with the following characteristics:

a. Owned by a business or self-employed individual (including a farmer or rancher). b. Used regularly in the occupation, business or profession of the insured. c. Adapted for business purposes, including ladder racks, lumber racks or any equipment usual to

business purposes. (Note: Vehicles used for driving to and from job sites or hauling personal tools

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are not considered as used in the occupation, business or profession of the insured, unless the insured is self-employed.)

17. Restored vehicles. 18. Vehicles with pre-existing damage that presents a safety hazard. 19. Vehicles that are illegal to operate. 20. Van conversions. 21. Vehicles with more or less than 4 wheels/tires. 22. Foreign sport vehicles. 23. Vehicles made by the following manufacturers: Alfa Romeo, AM General, Aro, Aston Martin, Avanti,

Bentley, Bertone, Bricklin, Daewoo, Delorean, Ferrari, Fiat (except 500 models), ACE, Hummer, Laforza, Lamborghini, Lancia, Land Rover, Lotus, Maserati, Peugot, Pininfarina, Porsche, Rolls Royce, Tesla, Triumph, TVR

24. The following vehicle make and models: Acura NSX, Chevrolet Camaro V8 models, Chevrolet Camaro Z28 and I-ROC, Chevrolet Corvette, Chrysler and Plymouth Prowler, Dodge Viper and Viper Shelby, Ford Mustang V8, GT, Cobra, Shelby, Saleen, and Boss models, Ford Think, Mazda Speed6

VEHICLE SURCHARGES The following vehicles will be surcharged on all lines of coverage:

1. ISO Performance Indicators S, P, H, 2, 3 and 4 (model years 1994 and newer) 2. Turbo-charged / Super-charged 3. Convertibles

Note: if a vehicle qualifies for more than one vehicle surcharge, only the highest will be applied.

WGIC-806 TX (01/01/2015) (rev. 12/12/14) 18

SURCHARGES The following surcharges will be applied to Bodily Injury, Property Damage, Uninsured/Underinsured Motorist, PIP, Medical Payments, Other than Collision and Collision coverage premiums in addition to any other surcharge. BUSINESS USE: A 15% surcharge will be applied for any vehicle classified for business use. The only acceptable Business Use occupations in this program are: marketing representative, real estate agent, outside sales, outside buyer. A vehicle is considered used for business if any of its mileage is associated with those occupations. No coverage will apply for damages sustained while vehicles are used as an artisan, contractor, or in another commercial venture. UNACCEPTABLE DRIVER AND UNACCEPTABLE VEHICLE: A 100% surcharge will be applied to all lines of coverage when an unacceptable driver or unacceptable vehicle is insured on the policy. VEHICLE TITLE: A 100% surcharge will be applied if the vehicle has a salvaged title or declared a total loss by an insurance company. All such “pink titled” vehicles will receive this surcharge. A 25% surcharge will be applied if a previously “salvaged” vehicle has been repaired and reclassified as a “rebuilt salvage” vehicle by the DMV. All such “blue titled” vehicles will receive this surcharge. These surcharges are applied in addition to any other vehicle-type surcharge.

DISCOUNTS Discounts apply to bodily injury, property damage, Other than Collision and Collision coverage premiums, unless otherwise indicated. For point charges, please refer to Driver Point Surcharges on page 13. ANTI-THEFT DEVICE DISCOUNT: A 5% discount will be applied to the Other than Collision coverage premium if the vehicle to be insured is equipped with a factory installed alarm system or vehicle locating device. The Vehicle Identification Numbers (VINs) must specifically identify the existence of the device in order to qualify for the discount. CLEAN DRIVER DISCOUNT: A driver qualifies for a 5% discount on Bodily Injury and Property Damage coverage and a 15% discount on Other Than Collision and Collision coverage if they have reached their 25th birthday, and in the past three years:

1. Have held (and currently hold) a verifiable and valid Texas license without any suspensions, revocations, interruptions or convictions of Failure to Appear, and

2. Have had no chargeable accidents, no chargeable violations, and are free of surcharge points. Each rated driver is eligible to receive the discount whether other drivers on the policy qualify or not. This discount applies to Bodily Injury and Property Damage, Other than Collision and Collision coverages only. HOMEOWNER DISCOUNT: To qualify for the 10% Homeowner discount, proof of current homeownership of a family home, condominium, or townhome must be submitted to the company matching the garaging address of the insured vehicle/s. Mobile homes and Motor Homes do not qualify for this discount. To qualify:

The applicant or spouse must be the owner of the Texas residence (if the homeowner is the applicant’s spouse and is excluded from coverage, proof of marriage may be required); and

All drivers must be free of major violations for the previous three years; and No driver may exceed 3 driver surcharge points; and Owner must have valid Texas driver license. All other drivers must hold a valid U.S. driver license or

valid learner's permit. Acceptable proof:

Homeowner insurance declarations page Loan/mortgage document Property tax record Deed

WGIC-806 TX (01/01/2015) (rev. 12/12/14) 19

RENEWAL DISCOUNT: 1) A 15% discount applies to renewals of coverage (6 or 12 month terms). Quarterly term policy holders will

qualify for the discount at the 6 month anniversary of their coverage. 2) To be eligible for this discount all operators must:

a) Be free of “chargeable accidents” (as that term is defined in this Manual) in the past 12 months, and b) Have a valid US or Foreign driver license or Matricula Consular identification card.

3) A policy cannot receive the Renewal Discount if it is already receiving the Transfer Discount. TRANSFER DISCOUNT: 1) To be eligible for this discount:

a) Named Insured must provide the Company with proof of continuous private passenger Liability insurance for the preceding 6 months (not to exceed 30 day lapse). Acceptable proof is any of the following showing 6 months continuous coverage:

(1) Renewal offer. (2) Declarations page. (3) Insurance company-issued ID card. Note: non-company-issued ID cards or binders are not

acceptable. (4) Letter of experience on letterhead from a U.S. insurer.

b) All operators must (1) have had no “chargeable accidents” (as the term is defined in this manual) in the past 12 months,

and (2) Have a valid US or Foreign driver license or Matricula Consular identification card.

2) A 15% discount applies if there is no lapse, or a lapse does not exceed 30 days between the expiration/termination of the previous policy until inception of the Western General policy.

3) Upon renewal of coverage, the policy will continue to receive the Transfer Discount as long as all qualifications are met.

4) Policies receiving the Transfer Discount are not eligible to receive the Renewal Discount.

MULTI-VEHICLE DISCOUNT: The Multi-Vehicle discount applies to two or more private passenger automobiles when they are insured with Home State County Mutual and garaged at the same location. Exceptions: student attending school in Texas or a member of the U.S. military stationed in Texas. Discount factors are determined by the number of drivers and vehicles on the policy, as well as assigned driver marital status and gender.

WGIC-806 TX (01/01/2015) (rev. 12/12/14) 20

POLICY SERVICE: INSTALLMENT PLANS An applicant has the option of selecting Pay in Full or selecting an Installment Plan. If an applicant selects Installment Plan, an installment fee and monthly policy fee will be incurred for each scheduled installment. Prepayment of multiple installments in one payment does not change the Installment Plan to a Paid in Full plan nor does it reduce the fees incurred for scheduled payments. If an installment payment is made after its due date, a $5 late fee will apply. CANCELLATIONS: 1. Policies will be canceled on a pro-rata basis. 2. No flat cancellations will be permitted after the inception date of the policy, unless approved by company. 3. Policies not accepted by the insured due to an uprate, and returned to us postmarked within 15 days of the

date of issuance will be cancelled at the quoted premium. 4. An insured signed request or lost policy release is required for all cancellations. 5. Once a check is returned, the company will notify the insured that coverage terminated on the last day for

which premium was paid. The insured must then pay the original amount due, the $25 NSF check fee, and the $20 reinstatement fee in order to have the policy reinstated.

6. The company may cancel the policy within the first 60 days for underwriting reasons. 7. The policy fee and installment plan fee are fully-earned as billed and due upon policy cancellation. REINSTATEMENTS: 1. Policies cancelled for underwriting reasons or failure to comply with requests for necessary underwriting

information will not be reinstated without prior underwriting approval. 2. A reinstatement fee of $20 will be charged. RENEWALS: 1. If the company is unable to renew a policy, a non-renewal notice will be sent directly to the insured at least 30

days prior to expiration. POLICY CHANGE REQUESTS: 1. All policy change requests should be submitted through the company’s on-line system. Website policy

change requests may not require a down payment prior to processing the request. 2. Endorsements are subject to a $5 endorsement fee. 3. If you are unable to process via the on-line system due to technical issues, call Producer Services for

assistance. 4. Verify eligibility before adding drivers and vehicles to the policy. 5. All policy change requests require the insured’s signature, including all applicable waivers and disclosures. 6. Suspension of coverage is not permitted. 7. Notification of all newly acquired automobiles (replacement or additional vehicles) must be made within 20

days to the company. If received beyond the 20th day from the day of acquisition, the policy change will be effective the day received by the company. Coverages, deductibles and limits of liability applicable to the newly acquired automobile will be: a. If the newly acquired automobile replaces a motor vehicle listed in the policy declarations, the coverages

will be those provided for the replaced vehicle. b. If the newly acquired automobile is an additional vehicle and the company insures all automobiles in the

household, then the coverages will be those provided on the listed vehicle that has the broadest coverage, until the company has been notified in writing and proper premium is charged.

c. If the newly acquired automobile is an additional vehicle and the company does not insure all automobiles in the household No Coverage will be provided until the insured or producer has notified us in writing and proper premium has been charged.

WGIC-806 TX (01/01/2015) (rev. 12/12/14) 21

BINDING RULES: 1. Producer’s Responsibility:

a. Coverage will be bound when a qualifying application is transmitted to the Company with a sufficient down payment as dictated by the pay plan selected.

b. Agent must utilize the company’s on-line transmittal system and select the method for remitting premium. You may select one of the following methods:

(1) Agency draft. The company will electronically deduct from the Agent’s designated trust account. (2) Premium payment via the applicant’s electronic check, debit or credit card. If the applicant

desires to have regularly scheduled payments made electronically, please submit a completed and signed company approved EFT Authorization Form.

c. The time and date of binding must be no earlier than the time and date the signed, qualifying, completed application is received by the agent and sufficient premium is paid for coverage.

d. All vehicles must be inspected by the agent prior to binding physical damage coverage. 2. Producers do not have authority to:

a. Quote or bind coverage or accept an application for insurance coverage based on information the agent knows is false or inaccurate.

b. Bind a risk not eligible or unacceptable according to the company’s underwriting guidelines. c. Bind Coverages or Coverage limits not specified in the underwriting guidelines. d. Allow anyone other than the applicant or spouse to endorse, sign on behalf of, or effect coverage under a

policy. e. Authorize sub-producers or producers not appointed by the company to bind coverage on behalf of the

company. 3. In the event the Agent is unable to provide an application through the Company’s approved on-line transmittal

system, the Agent may submit the application by one of the following methods: a. Fax Binding:

(1) The signed application and premium sweep authorization must be faxed to the company no later than 72 hours from the effective date of coverage listed on the application.

(2) If the application and sweep authorization are faxed after the 72 hours from the effective date listed on the application, then coverage will commence no sooner than the day the fax transmittal is received by the company.

b. Mail Binding: (1) The original signed application and premium must be postmarked no later than 72 hours from the

effective date of coverage listed on the application. (2) If the application and premium are postmarked after the 72 hours from the effective date listed on

the application, then coverage will commence no sooner than the day after the postmark date on the envelope containing the application.

c. Mail without a Postmark, Courier, Express, or Overnight Mail: (1) The company must receive the application and premium no later than three (3) business days

from the date listed on the application. (2) If the application is received by mail without a postmark, through a courier service, express, or

overnight mail more than three (3) business days after the effective date listed on the application, then coverage will commence no sooner than the date the company receives the application.

The company reserves the right to reject, rescind, or cancel incomplete applications, applications received without sufficient monetary consideration, fraudulent applications, or those containing material misrepresentations.

THANK YOU FOR CHOOSING