PL - IA 01/01/2013 Rates and Manuals - Western National Insurance ...
PL - IA 01/01/2013 Rates and Manuals - Western National Insurance ...
PL - IA 01/01/2013 Rates and Manuals - Western National Insurance ...
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<strong>Western</strong> <strong>National</strong> Mutual <strong>Insurance</strong> CompanyIOWA HOMEOWNER RULES4.2 Modified Loss Settlement Terms – Coverages A <strong>and</strong> B – Forms 2 <strong>and</strong> 3St<strong>and</strong>ard Homeowner Program ONLY4.2.1 Repair CostAt the option of the company, the loss settlement provisions that apply to buildingscovered under Coverages A <strong>and</strong> B can be converted from replacement cost coverage torepair cost coverage. Repair cost is the cost to repair or replace the building to acondition <strong>and</strong> appearance similar to that which existed at the time of loss, utilizingcommonly used materials that are readily available in the local area.Step 1 Establish the Coverage A limit.Step 2 Determine the percentage of the repair cost that the Coverage A limitrepresents. (Example: If the estimated cost to repair or replace the residencewith commonly used <strong>and</strong> readily available materials is $100,000 <strong>and</strong> theCoverage A limit shown on the declarations is $50,000, the Coverage A limitrepresents 50% of the repair cost)Step 3 Using the rating information shown in this manual, select the appropriatemodifier for the percentage determined in Step 2. (Example: 50% = 1.21modifier)Step 4 Use the basic policy rating information shown in this manual to determine thepremium for the amount determined in Step 1. (Example: Determine thepremium for $50,000)Step 5 Multiply the result of Step 4 by the appropriate modifier selected in Step 3.(Example: Multiply the premium from Step 4 by 1.21 <strong>and</strong> round to the nearestdollar)Attach Endorsement ML-255.4.2.2 Modified Replacement CostAt the option of the company, coverage for partial losses can be provided on areplacement cost basis when the limit on the residence is less than 80% of itsreplacement value.Step 1 Establish the Coverage A limit.Step 2 Determine the percentage of the replacement value that the Coverage A limitrepresents. (Example: If the replacement value of the residence is $100,000<strong>and</strong> the Coverage A limit shown on the declarations is $50,000, the CoverageA limit represents 50% of the replacement value)Step 3 Using the rating information shown in this manual, select the appropriatemodifier for the percentage determined in Step 2. (Example: 50% = 1.24modifier)Step 4 Use the basic policy rating information shown in this manual to determine thepremium for the amount determined in Step 1. (Example: Determine thepremium for $50,000)Step 5 Multiply the result of Step 4 by the appropriate modifier selected in Step 3.(Example: Multiply the premium from Step 4 by 1.24 <strong>and</strong> round to the nearestdollar)Attach Endorsement ML-256 <strong>and</strong> make an entry to show the percentage that applies.7-1-2<strong>01</strong>0 <strong>IA</strong> - Rules - 11 General RulesIncludes copyrighted material with permission of American Association of <strong>Insurance</strong> Services