Maryland State Underwriting Guidelines

Table of Contents


A01 – Rejection Criteria
A02 – Vehicle Use Definitions
A03 – Named Non-Owner Coverage – Auto policies only
A04 – Loss History
A05 – Cancellation/Nonrenewal and Changes
A06 – Point System
A07 – Temporary Moratorium

 

A01 - Rejection Criteria

The Company is responsible for underwriting all business submitted to the Company. All business submitted to the Company is subject to complete review at new business and at renewal. New and renewal business will be subject to the criteria established in this section, which are not unfairly discriminatory and are compliant with applicable law.

In order to validate the information submitted, the Company may request and utilize additional information from third parties or the customer for auditing quote, application and policy information submitted to the Company at any point during the quote and application process or the policy tenure.

The following risks are not acceptable:

  1. Named insureds or drivers who:
    a. have never been licensed, or whose driving record cannot be officially verified by the state or country of origin, unless the driver is excluded from coverage.
    b. do not have a valid U.S. license.
    c. have been convicted of insurance fraud.
    d. have had a policy terminated or voided by the Company (or one of its affiliates) for, or who have committed, fraud or misrepresentation in connection with an application for insurance or in the presentation or settlement of a claim.
    e. have had a policy terminated or voided by the Company (or one of its affiliates) because of, or who have issued, an unauthorized payment in connection with an application for insurance or a policy.
    f. have knowingly threatened bodily harm or engaged in menacing behavior towards a Company employee, partners, agents, or their families.
    g. have not provided documentation to verify their identity.
    h. have an outstanding balance on an existing or recently canceled or lapsed policy written by a licensed insurance carrier in the United States.
    i. have had a bankruptcy within the last year.

  2. Named insureds or drivers where any of the following exist:
    a. Within the last 10 years, 2 or more convictions for driving while intoxicated or impaired by the use of drugs and/or alcohol (DUIs).
    b. Within the last 3 years, a driver has been convicted of vehicular homicide or manslaughter.
    c. A driver with a currently suspended license who is unable to reinstate their license within the designated time frame.
    d. Within the last 3 years:
        (1) 2 or more major convictions; or
        (2) 3 or more principally at-fault accidents and/or lending losses.
    e. A total of 2 or more major convictions resulting from the combination of:
        (1) DUI convictions within the last 10 years, and
        (2) Other major convictions within the last 3 years.
    f. 1 or more major convictions in the last 3 years.
    g. Drivers with 3 or more points within the past 12 months.
    h. Drivers with 6 or more points within the last 3 years.
    i. Drivers with 2 or more at-fault accidents and/or lending losses within the last year.
    j. Drivers with 3 or more at-fault accidents and/or lending losses within the last 3 years.
    k. Drivers with 3 or more points with less than 3 years of licensed driving experience.
    l. Applicants who have been convicted of any of the following major violations that have occurred in the past three (3) years are not eligible:
        (1) Evading a police officer.
        (2) Failure to stop and report or identify oneself when involved in an accident, i.e., hit and run.
        (3) Homicide or assault arising out of the operation of a motor vehicle.
        (4) Manslaughter, criminal negligence, or a felony involving the use of a motor vehicle.
        (5) Operating a motor vehicle without the owner’s permission, stealing an automobile.
        (6) Transporting hazardous substances without proper license, safety devices, or cautions to do so.
        (7) Impersonating an applicant for license or registration; or procuring a license or registration through impersonation whether for himself or another.

  3. Operators that are under the minimum age for state licensing.

  4. Vehicles that do not have a permanent Maryland garaging address or have a nonresidential garaging address.

  5. Persons residing in establishments which primarily provide lodging on a short-term basis (e.g., hotels, motels, hostels, etc.)

  6. Vehicles that have a principal out of state garaging location in Michigan or Canada. "Principally garaged" is defined as residing in any location for at least six months in a year.

  7. Vehicles used for:
    a. racing;
    b. carrying persons or property for compensation or a fee, including, but not limited to: limousine; taxi; transportation network companies or other livery services (does not apply to shared expense car pools); transport services for nursery or school children, migrant workers, or hotel/motel guests; pickup or delivery of magazines, newspapers, food, or any other products; participation in a Personal Vehicle Sharing Program, where the insured is profiting from the operation;
    c. lease or rental to others by the applicant;
    d. emergency services; or
    e. business use that does not meet the acceptable use standards in the Vehicle Use Definitions Rule.

  8. Private passenger autos:
    a. equipped with altered suspensions, which are suspensions that are homemade, custom-built, or modified, and include lift kits greater than 4 inches (usually installed on off-road vehicles or street rods).
    b. dune buggies;
    c. equipped with snowplowing equipment;
    d. not registered for street use;
    e. equipped with cooking equipment or bathrooms;
    f. that have a cost new of greater than $100,000;
    g. used to transport explosives, chemicals, flammable materials, or more than 500 pounds of supplies or equipment;
    h. that have a gross vehicle weight rating (according to the manufacturer's specifications) greater than 15,000 pounds;
    i. that exceed ground to frame height limit of 23 inches for private passenger autos, 27 inches for small trucks, and 31 inches for large trucks.

  9. Low-speed vehicles that have a maximum speed less than 55 mph for Auto.

  10. Sand rails, go-carts, and Cushman 3- and 4-wheeled vehicles or similar vehicles.

  11. Motorcycles, off-road vehicles or other two-wheel vehicles.

  12. Any vehicles regularly available to non-listed drivers, to an extent that such availability evidences regular used of the vehicle by such persons.

  13. Policies where an "eligible to be rated driver" has a permanently revoked license, unless that driver is excluded from coverage.

  14. Commercial vehicle types including, without limitation, step-vans, panel vans, parcel delivery vans, or cargo cutaway vans or other vans with cabs separate from the cargo area.

  15. Policies that have vehicles garaged at two different addresses and drivers in two different households, with the following exceptions:
    a. student or military risks (e.g., spouse of insured/unmarried child of insured);
    b. named insured has two different households (e.g., one permanent home and one vacation home);
    c. drivers who live at different addresses but all vehicles are garaged at one place; or
    d. husband/wife in the process of divorce and the vehicle is still considered community property.

  16. Two or more private passenger automobile insurance policies written for the same household, with the following exceptions:
    a. children who own their own vehicle; or
    b. unrelated residents/roommates.

  17. Vehicles that are not owned or leased by the named insured or named insured's spouse.

  18. Vehicles that are owned or leased by a partnership or corporation

  19. Rental Vehicles: Policies where the only vehicle on the policy is a rental vehicle rented from a rental car agency are unacceptable.

  20. Vehicles with expired or invalid registration

  21. Vehicles currently or previously branded as Reconstructed, Irreparable, or have been deemed as a total loss by other insurance carriers. This includes vehicles with fire or flood damage.

  22. Policies with two or more vehicles listed with Business/Artisan use as defined in the Vehicle Use Definitions Rule (A02). Excludes vehicles classified as business use due only to their use by domestic employees, personal assistants, business managers and/or hired drivers.

  23. Drivers requiring proof of financial responsibility.

 

A02 - Vehicle Use Definitions

Vehicles are classified by their use:

  1. Pleasure - vehicles not used for commercial purposes or commuting to work or school;

  2. Commuting - vehicles used to drive back and forth to work or school; or

  3. Business - acceptable business use vehicles are those vehicles that are:
    a. used by sales or service representatives or for consumer-oriented direct home sales;
    b. used by real estate or insurance agents, lawyers, doctors, accountants or other professionals visiting multiple locations; 
    c. used by the insured to transport tools or other materials in a trade or business;
    d. owned by the insured and used by domestic employees; or
    e. used in a business for occasional errands.

 

A03 - Named Non-Owner Coverage - Auto policies only

Named non-owner coverage is not available.

 

A04 - Loss History

New business:

Any policy with a chargeable claim within the first 30 days of inception may be reviewed for consideration for continued coverage.

Renewal business:

Any policy with a chargeable claim may be reviewed for consideration for renewal.

 

A05 - Cancellation/Nonrenewal and Changes

A. Cancellations
All cancellations at the request of the insured or cancellations by the company shall be processed on a pro rata basis.

B. Changes
1. All changes requiring adjustments of premium shall be computed on a pro rata basis of the rate in effect when the coverage was issued.
2. If a vehicle is added or if a form of coverage is added for a policy written for less than one year, premium for the additional insurance shall be pro rata based on rates in effect at the time the change is made.

 

A06 - Point System

In determining the violation point count, the following shall apply:

ACCIDENTS & VIOLATION POINTS
  Points
Violation / Accident Description 1st Each Additional Type
All traffic related alcohol convictions 2 2 MAJOR
All traffic related convictions for drugs or narcotics 2 2 MAJOR
Hit and run/Leaving the scene 2 2 MAJOR
Reckless driving 2 2 MAJOR
Manslaughter / Vehicular Homicide 2 2 MAJOR
Felony Involving Auto 2 2 MAJOR
Fleeing / Evading a police officer 2 2 MAJOR
Speed over 100 miles per hour 2 2 MAJOR
Driving to the wrong side of a highway barrier 2 2 MAJOR
Speed Contest - Exhibition of speed 2 2 MAJOR
Illegal transportation of explosives 2 2 MAJOR
Driving on a suspended or revoked license 2 2 MAJOR
Minor with a BAC of .05 or higher 2 2 MAJOR
Refuse Sobriety Test 1 1 MAJOR
Open Container 1 1 MAJOR
Aggressive Driving 1 1 MAJOR
Speeding with injury to person or damage to property 1 1 MAJOR
Speeding by 20 mph or more (but less than 100 mph) 1 1 MAJOR
Overtaking and passing a school bus unlawfully 1 1 MINOR
Failure to use a child restraint 1 1 MINOR
All other violations not listed 1 1 MINOR
At fault accident 1 1 MINOR

 

A07 - Temporary Moratorium

Binding Authority Restrictions: A temporary moratorium may be activated, and no coverage or deductibles may be bound or changed in advance of approaching storms or weather events predicted to impact part of the State or the entire State. No additional coverages or deductible changes will be honored if a moratorium is in effect at the time of binding subject to sections A and B below.

A. Activation
a. A temporary moratorium may not become effective until triggered by at least one of the following events or emergencies:

  1. The National Weather Services issues a hurricane or tropical storm watch, warning, or advisory for part of the State or the entire State;
  2. The Governor or other governmental entity declares a state of emergency for part of the State or the entire State;
  3. The announcement of an evacuation, whether mandatory or voluntary, for part of the State or the entire State;
  4. The imposition of a special curfew for part of the State or the entire State; or

b. The temporary moratorium shall be limited to parts of the State:

  1. For which the National Weather Service has issued a hurricane or tropical storm watch, warning, or advisory;
  2. That are included within a government-declared state of emergency;
  3. That are under an evacuation order, whether mandatory or voluntary; or
  4. That are under a special curfew;

B. Exceptions
a. Third-party liability insurance purchased in connection with the purchase of a new or used motor vehicle by the insured;

b. 
The purchase of additional coverages, endorsements, or limits for an existing policy during its renewal period when the change becomes effective on the renewal date of the policy.


C. Deactivation
a. A temporary moratorium will be de-activated no more than 24 hours after the termination of the last hurricane or tropical storm watch, warning, or advisory issued by the National Weather Service.

b. Except as otherwise provided, a temporary moratorium that is activated based on a declaration of a State of Emergency by the Governor or other governmental entity for part of the State or the entire State ends at the expiration of the State of Emergency.

c.
Except as otherwise provided, a temporary moratorium that is activated based on the announcement of an evacuation, whether mandatory or voluntary, for part of the State or the entire State ends at the expiration of the evacuation period.

d. Except as otherwise provided, a temporary moratorium that is activated based on the imposition of a special curfew for part of the State or the entire State ends at the expiration of the special curfew.