What Do We Write? Farmers has elected to pursue three major groups of vehicles that may contain acceptable risks. They are: • Vehicles used in the Select Industry Groups • Vehicles Not in Select Industry Groups • Selected Motor Carriers For-Hire
What Do We Write? • Vehicles in our Select Industry groups usually require the least amount of effort to solicit and qualify. They are insured under the Commercial Auto Coverage Part of the Commercial Package Policy.
Retail/Service Restaurants Commercial Real Estate Artisan Contractors Habitational Wholesale/Distribution Automotive Trades Farmers Will Accept Business in Each of the Select Industry Groups
Non-Select Industry Risks • Businesses not included in one of the Select Industry groups may have vehicles eligible for our monoline commercial policy. If they have commercial vehicles and meet current underwriting rules, the vehicles may be eligible for a monoline Business Auto Policy. To be eligible, however, all eligible vehicles must be insured on the policy or within the Farmers Group.
Motor Carriers for Hire • Operations consisting of fleets of 5 or more trucks or truck tractors with trailers that are engaged in hauling goods (including household goods), materials or commodities of others for-hire, as a common carrier or as a contract carrier , may be eligible on a monoline Commercial Auto Policy. These operations are limited to use within an air mile radius of 500 miles from the place of garaging.
Motor Carriers for Hire • Operations consisting of fewer than 5 power units may be eligible if operating under a long term, exclusive lease to another motor carrier insured by the Farmers Insurance Group, or if operations are confined to delivery of goods or services from retail stores to customers within a 200 mile radius.
Panel Delivery Walk In Pickup Truck Van Type Flat Rack Truck We Want More of These
We Do Not Want These • Farmers is not a market for : • Dump trucks • Flammable delivery trucks • Crane Services • Bus or Livery services
Submit for Approval Rules • Risks which have had their insurance coverage canceled or non-renewed within the past three years. Submission must include information on the reasons for cancellation or non-renewal.
Submit for Approval Rules • Risks with drivers that exceed the standards of the MVR evaluation program • Sports Cars or High Performance Vehicles. A list of these vehicles is found in the Personal Lines Manual
Ineligible Equipment • Wheeled or tracked equipment, whether used on or off road, such as: • Cranes • Loaders • Equipment used for: • road construction • geophysical exploration
Ineligible Equipment • High capacity compressors • Generators • Pumps • Lighting equipment
Submit for Approval • Trucks or vans hauling employees or workers as passengers unless operations are also covered by Workers’ Compensation Insurance.
Submit for Approval • Trucks exceeding 45,000 lbs. GVW or Tractor - trailers exceeding 45,000 lbs. GCW regardless of radius of operation.
GVW- GCW Defined • GVW denotes Gross Vehicle Weight which is the maximum loaded weight for which the vehicle is designed, as specified by the manufacturer. GCW denotes Gross Combination Weight which is the maximum loaded weight for the combination of a truck-tractor and trailer or semi trailer for which the truck tractor is designed, as specified by the manufacturer
Submit for Approval • Trucks exceeding 10,000 lbs. GVW operating regularly or frequently in excess of 200 miles radius from the garaging address. • Passenger cars, vans, or pickups with an actual cash value or purchase price exceeding $90,000. • All Motor Carriers For-Hire
Mileage Radius Defined • The Radius is measured on a straight line from the street address of a vehicle’s principal garaging to the farthest point of regular operations. Road mileage from point A to point B may be 223 miles, but the distance on a straight line (Radius) may only be 180 miles.
Acceptable Radius of Operations • All must be used within an air mile radius of 500 miles from their place of garaging. (Radius Classes Local, Intermediate, and Extended Intermediate)
Special Classes of Vehicles • Passenger cars, station wagons and vans may be placed on Commercial policies only when used in the business of the named insured, and rated as Commercial Auto “Private Passenger.” • Pleasure use vehicles, including pickup trucks, not used in business, even if owned and registered to a corporate named insured, should be submitted to the appropriate Personal Lines Company.
Special Classes of Vehicles • Motor Homes not leased or rented to others and used for business purposes may be written on Business Auto or Truckers Coverage Forms, subject to the passenger car, station wagon and van rule. Submit all others to Personal Lines.
Special Classes of Vehicles • Farm Trucks hauling produce from field to warehouse or field to customer, if 10,000 lbs GVW and under, may be submitted to Personal Lines.
Special Classes of Vehicles • Courtesy Vans are eligible only if: • Owned by a business insured by Farmers in one of the Selected Industry Groups and used to transport the insured’s customers on a random basis. All other commercial vehicles owned by the insured must also be included on the policy. • Extreme underwriting caution is exercised to ascertain that exposures are controlled.
Motor Vehicle Record (MVR) Program • The following MVR Evaluation and MVR Point Program must be applied to any drivers of passenger cars or trucks written on a Business Auto Policy in the Selected Industry Groups. It is also used for motor carrier for-hire Truckers Coverage and monoline commercial vehicles on policies for eligible risks not included in the Selected Industry Groups. State or other local laws govern where applicable.
Acceptable Drivers • All drivers who meet the standards of the MVR Point Program are acceptable provided they have the following qualifications: • Minimum of 3 years experience operating the type of equipment insured. • Must be 23 years of age or older if driving over-the-road equipment of 45,000 lbs. GCW or more, unless the youthful driver can demonstrate completion of a certified Truck Driving School and meet the 3 year experience qualification.
Acceptable Drivers (Continued) • Must be at least 21 years of age or older when driving equipment other than stated above. • Commercial Drivers License (CDL), when required by law
Unacceptable Drivers- Named Driver Exclusion • All risks with drivers who do not meet the qualifications or the MVR Point Program to be described in the following pages, are SFA. When requested in states where permitted, and at the underwriter’s discretion, the service center may prepare a Driver Exclusion Endorsement E1280A).
The MVR Point Program • This program is established to determine acceptable vehicle risks. It is based on driver points assigned for negligent accidents and violations, including those incurred during personal use (in states where permitted).
The MVR Point Program - Major Violations • Drivers charged with any of the following Major Violations within the last five years are unacceptable and cannot be bound: • Accident involving a fatality. • Driving with a suspended or revoked drivers license. • Failure to stop or report an accident. • Driving under the influence of liquor or drugs. • Homicide or assault from operation of a vehicle. • Reckless driving, speed contest or eluding an officer.
The MVR Point Program - Minor Violations • A Minor Violation is any moving traffic violation other than a Major Violation listed above. Each driver is assigned one (1) point for each Minor Violation incurred during the past 3 years.
The MVR Point Program - Negligent Accidents • Negligent Accidents are vehicle accidents in which the insured driver was at fault. All accidents are considered at fault, except those occurring under the following circumstances (at the Underwriter’s discretion, a copy of the police report may be requested):
The MVR Point Program - Negligent Accidents • No point will be charged if- • Insured driver’s vehicle was struck while legally parked. • Insured driver’s vehicle was struck by another vehicle while legally stopped for traffic and the insured was not convicted of a moving traffic violation. • The person responsible for the accident reimbursed the insured or the insured’s driver for the accident, or there is a judgment against the responsible person • The other party received a citation and the insured driver did not. • Collision with a bird or animal.
The MVR Point Program - Assigning Points • Assign two (2) points for each negligent accident occurring during the past 3 years involving bodily injury • Assign two (2) points for each negligent accident occurring during the past 3 years in which the combined property damage for all parties involved in the accident was more than $1,000, and no bodily injury was reported.
The MVR Point Program - Assigning Points • Do not assign points for a negligent accident involving less than $1,000 of combined property damage when no bodily injury was reported. However, if the driver is cited for a Minor Violation in connection with such an accident, charge one (1) point for the violation.
The MVR Point Program - Equipment Citations • Though not included in the point total, attention should be paid to the number and severity of equipment-related citations. Excessive citations are an indication of an inadequate fleet maintenance program. Of particular concern are safety-related equipment citations which may increase the likelihood of loss such as:
The MVR Point Program - Equipment Citations • Worn or defective brakes • Worn or defective tires • Cracked rims or frames • Defective lights • Over-weight loads • Unsafe or unsecured loads
The MVR Point Program - Table • The MVR Point Program Table found in the auto business guide must be used for all risks with 10 or more drivers including the named insured. The Program applies to all traffic violations and accidents including those incurred during personal use.
The MVR Point Program - Table • For those risks with fewer than 10 drivers, use the MVR Point program Table as a guideline for eligibility, but the underwriter can apply discretionary underwriting judgement to determine acceptability if the risk is submitted with full information for approval (SFA).
Classification of Vehicles • Commercial Vehicles are rated according to the classification assigned. Because the rate depends upon this classification, it is extremely important to understand the classification process.
Classification of Vehicles • Primary Classification is Based on Four Features • Whether the vehicle(s) are part of a fleet • The GVW (Gross Vehicle Weight) or GCW (Combined Vehicle Weight) • Nature of business use • Mileage radius
Primary Classification • The Primary Classification is obtained from the Classification Codes and Rating Factors accessed through help screens in the CLS rating sequence.
Secondary Classification • A Secondary classification is obtained in the same manner as the Primary classification and is based on degree of hazard.
Vehicle Size/ Weight • Light Truck. A light truck has a GVW of 10,000 pounds or less. A ½-ton or ¾-ton pickup would be in this size class. • Medium Truck. A medium truck has a GVW of 10,001 lbs. to 20,000 lbs. Crawler type (runs on treads instead of wheels) trucks are also in this class. A 1-ton or 1½-ton vehicle would be in this truck size class.
Vehicle Size/ Weight • Heavy Truck. A heavy truck has a GVW of 20,001 lbs. To 45,000 lbs. A 2-ton or 3-ton vehicle would be in the heavy truck size class. • Extra-Heavy Truck. An extra-heavy truck has a GVW over 45,000 lbs. A 4 ton or larger vehicle would be in the extra-heavy size class
Vehicle Size/ Weight • Truck-tractors (Motorized vehicle without a body for carrying commodities or materials, equipped with a fifth wheel device for semi-trailers. Heavy truck-tractors have a GCW of 45,000 lbs or less; extra-heavy truck-tractors have a GCW over 45,000 lbs.
Vehicle Size/ Weight • Semi-trailer. Semi-trailers are equipped with a fifth wheel coupling device for use with a truck-tractor, with a load capacity over 2,000 lbs (includes converter gears commonly referred to as dollys or bogies, used to convert containers into semi-trailers).
Determination of the Primary Classification • To determine the first three digits of the Classification Code you must consider the nature of the business use. Business use is broken down into three categories: • Service • Retail • Commercial
Determination of the Primary Classification • These three categories apply to all vehicles except: • Extra heavy truck-tractors • Semi-trailers • Trailers • Service or utility trailers (0 - 2000 lbs load capacity)
Service Use Defined • Vehicles used to transport the insured’s personnel, tools, equipment and incidental supplies to and from job locations are classified as “Service” use. These vehicles are usually found at a job site the majority of the workday.