iowa FAIR Plan - FAIR Plan of iowa

UNDERWRITING RULES & GUIDELINES

NEW BUSINESS UNDERWRITING RULES & GUIDELINES -- GENERAL
These rules and guidelines apply to Dwelling, Homeowners, Farm, and Commercial properties.

There are more reasons than can be listed here that properties might be ineligible for coverage under the Iowa FAIR Plan ("the Plan") programs. However, since the Plan was created to write as many "distressed" properties as possible, the Plan’s underwriters generally try to provide coverage for as many submitted properties as they can. We realize that properties submitted for coverage will not be in the same physical condition as properties that are eligible for coverage in the standard insurance market. That doesn’t mean, however, that every property will be eligible for coverage in the Plan. In some situations underwriters will still have to decline to write risks that have certain characteristics. Potential applicants should contact their agents with regard to questions regarding possible eligibility for coverage under the Plan’s programs. Agents who have questions that cannot be answered by reviewing the following information should contact the Plan for further details and/or information.

Risks that have characteristics as listed below will almost certainly be considered as ineligible for coverage. For the most part these should be considered as "rules" that are very seldom broken. Only in the most unusual of circumstances would a risk with any of these characteristics be considered.

The property is vacant or unoccupied and/or a substantial portion of the building is unoccupied and open to trespass. (Note: An exception may be made for property in rehabilitation or reconstruction if it is determined that adequate progress toward completion of the rehabilitation or reconstruction within one year has been shown. Should an exception be made monthly reports showing such progress must be completed and submitted to the Plan to continue coverage. )
The property is not owner occupied and, where required, does not have a rental certificate as issued by the local housing authority. (Note: An exception may be made if at the time of application for insurance the applicant provides a copy of an application for a rental certificate.)
The property is classified as "Manufacturing" by the Insurance Services Office (ISO).
The property is in foreclosure.
The property has been damaged by fire and the damage has not been repaired and/or there are still unpaid claims from a prior fire.
The property is being used or has been used for any illegal activities.
The property has been condemned or "tagged" by local housing authorities.
The property is a mobile home that has a woodburning stove. (Note: An exception may be made if the woodburning stove was factory installed.)
The property has a "homemade" woodburning stove.
The property is a garage/outbuilding with a woodburning stove, unless the garage/outbuilding is at least 25 feet from the main dwelling. (Note: Although the Plan may provide coverage for the main dwelling, coverage will be excluded for the garage/outbuilding.)
The property has been materially misrepresented in any way by any applicant on any application or statement to the Plan. (Note: If the Plan relies on such representations in its underwriting process and it is discovered either before or after a loss that there has been material misrepresentation on a policy issued by the Plan coverage for that loss may be considered void.)

Beyond the list of "rules" shown above, there are other characteristics that in any given situation may also preclude coverage being provided by the Plan. The following list of underwriting "guidelines" provides additional information with regard to what the Plan’s underwriters will review when considering applications for new business. These guidelines include but are not limited to:

The property has grossly inadequate and/or defective heating, wiring, or plumbing.
The property is in exceptionally poor physical condition and/or has exceptionally poor housekeeping.
The property has characteristics of ownership, condition, occupancy or maintenance that are in violation of law or public policy and that result in substantial increased exposure to loss.
The property has physical conditions which result in an outstanding order to vacate, has an outstanding demolition order, has outstanding code violations, or has been declared unsafe in accordance with the applicable law.
The property has physical conditions as confirmed by inspection or investigation which would have been grounds for declination of the risk by the Plan had the conditions been known to the Plan at the time of initial acceptance.
The property is a rental property in which at least 65 percent of the rental units in the building are unoccupied, and the insured has not received prior approval of a rehabilitation program from the Plan.
The property has been abandoned for 90 days or more.
The property may be in jeopardy of arson because there is good cause to believe, based on reliable information, that the building will be burned for the purpose of collecting the insurance on the property. The removal of normally permanent items from the building shall be considered under this paragraph when the insured can provide no reasonable explanation for such removal.
The property has a named insured, loss payee, or any other person having a financial interest in the property who has been convicted of the crime of arson or a crime involving a purpose to defraud an insurance company. The fact that appeal has been entered shall not negate the use of this paragraph.
The property has been subject to more than two losses, each loss amounting to at least $500 or one percent of the insurance in force, whichever is greater, in the immediately preceding 12-month period, or more than three such losses in the immediately preceding 24-month period, provided that the cause of such losses is due to the conditions which are the responsibility of the property owner or due to the actions of any person who would be defined as an insured under the policy.
The property has had a problem with frequency of thefts, in which there have been more than two thefts, each loss amounting to at least $500, in a 12-month period.
The property has had previous loss history or matters of public record concerning the applicant or any person who would be defined as an insured under the policy.
The property may not be eligible for vandalism and malicious mischief coverage if the property has been subject to two vandalism or malicious mischief losses, each loss amounting to at least $500, in the immediately preceding 12-month period, or three or more such losses in the immediately preceding 24-month period.

ADDITIONAL UNDERWRITING GUIDELINES -- HOMEOWNERS

PROPERTY: These underwriting standards apply specifically to the property section of the Homeowners program. Property insurance will not be provided for risks with the following loss history:

The property has had an excessive number of theft losses or has had a single large theft loss
The property has had two vandalism or malicious mischief losses, each loss amounting to at least $500, in the immediately preceding 12-month period, or the property has had three or more such losses in the immediately preceding 24-month period. Should one of these situations occur the Plan may cancel the Homeowners policy and may consider writing a Dwelling policy that excludes vandalism and malicious mischief coverage.

LIABILITY: These underwriting standards apply specifically to the liability section of the Homeowners program. Liability insurance will not be provided for risks with any of the following deficiencies, as disclosed by the application or inspection, until they have been corrected.

The property has had an excessive number of liability losses or has had a single large liability loss.
The property has broken, cracked, uneven or otherwise faulty steps, porches, decks, sidewalks, patios and/or similar areas.
The property has downspouts or drains which discharge onto sidewalks and/or driveways.
The property has unsafe conditions, including but not limited to, inadequate lighting of stairways and hallways.
The property has animals that may be considered dangerous or vicious or animals that have caused a liability claim. Examples of breeds of dogs that may fit this description include, but are not necessarily limited to: Pit Bull, Chow Chow, Rottweiler, Akita, Bullmastiff, Greyhound, Briard, Malamute, Boxer, Persa Canario, Husky, Australian Cattle Dog, Dalmation, Mastiff, Old English Sheep Dog, Belgian Shepherd, Malinois, Great Dane, Border Collie, Doberman,, German Shepherd, Shar-Pei, and Great Pyrenese.
The property has an unfenced swimming pool or private pond.
The property has no handrails or unsafe handrails.
The property has junk cars, empty refrigerators, trampolines or other potentially dangerous objects in the yard which are an attraction to children.
The property has a business operating at the insured location, unless the applicant has in force a business liability policy with limits of at least $100,000 per occurrence providing premises liability coverage. The Plan reserves the right to require a copy of such policy.
The property has three or more horses or other riding animals, unless the applicant has in force a liability policy with limits of at least $100,000 per occurrence providing coverage for the ownership and use of the horses or other riding animals. The Plan reserves the right to require a copy of such policy.

ADDITIONAL UNDERWRITING GUIDELINES -- FARM

All farm buildings must be in use and must be in good condition.
Coverage is not available for farm machinery or equipment.
Coverage is not available for animals.
Farm liability coverage is not available.