Annual

Texas Private Passenger Auto – Guidelines: Empower Insurance Group

Empower Insurance Group Priority / Enhanced / Annual Savings / Bravo / Select Alinsco Insurance Company Underwriting Guidelines 04.15.17

1.

BINDING AUTHORITY 1.1.

Coverage will be bound by the Company at the latter of the exact date and time the application is signed and dated by both the applicant and agent or the recorded Empower system date and time the policy is uploaded, if all of the following are met: 1.1.1. Application is completed in its entirety including signed rejections, driver exclusions, vehicle inspections, and current photos (where applicable) and application with down payment is uploaded via our Empower system. 1.1.2. All documents required on the fax checklist are faxed to us by the end of the business day.

1.2.

All applications must have completed the electronic signature process. The insured must click, sign and complete the entire e-signature process. The insured signatures may not be completed by the agent, or agent representative. Down payment funds will be drafted from the agent’s account. Coverage is NOT bound if the insured’s down payment check is returned by their bank.

1.3.

If an application is submitted with an improper driver class, symbol, surcharge, discount, or without the required proof for a specific discount, the policy will be issued at the appropriate rate level according to the rules set forth in this manual. It is the responsibility of the producer to follow all the guidelines and requirements.

1.4.

The agent must take current photos for all vehicles on the date of the application or endorsement for Uninsured/Underinsured Motorist and Personal Injury Protection. Photos are also required for any full sized van inside and out. If photos are not received same day via our Empower software system the policy will be set for cancellation.

1.5.

Any driver with a foreign driver’s license, Matricula Consular, foreign passport, Permanent Resident Card, Voter Card or (EFIN), or Visa, must provide the ID(s) to the agent at the time of inception. Only ID(s) with a photo will be accepted. The agent must make a copy of the provided ID(s)

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and submit to Empower by fax or scan at policy inception. If not received with the paperwork on the same day the policy will NOT be bound. 1.6.

2.

All vehicles and drivers must meet the underwriting guidelines in order to be considered for coverage.

POLICY TERM/PAYMENT OPTIONS 2.1.

Annual Savings policies are issued for a twelve month term. Enhanced, Bravo and Select policies are issued for a six month term. Priority policies are issued for a one month term.

2.2.

Payment options include paid in full or an installment billing plan.

2.3.

Each payment option includes a fee per vehicle for the Texas Automobile Burglary and Theft Prevention Authority. On the Annual Savings policies the fee is $2.00 per term, on the Enhanced, Bravo and Select policies the fee is $1.00 per term and for the Priority policies the fee is $.16 per term.

2.4.

All service and billing fees charged will be the maximum allowed under rule 14 of the Texas Automobile Rules and Rating Manual.

2.5.

Payment Plans 2.5.1.

3.

Payment plan option details are made available via our website.

UNACCEPTABLE RISKS The Company reserves the right to accept, reject, request modification and make final underwriting decisions on all applications. Below is a general list of the risks not written; however, a combination of factors may cause some applications to be unacceptable even though not specifically mentioned in these guidelines. The company will accept a vehicle / driver ratio of 1 more vehicle than drivers. For example 4 cars: 3 drivers are acceptable but 4 cars: 2 drivers are not. 3.1.

DRIVERS 3.1.1.

Any operator with the following types of Driver’s License:

Driver License Type:

Priority

Enhanced

Valid US Driver’s License

Accept

Accept

Annual Savings Accept

Foreign Driver’s License

Accept

Accept

Accept

Prohibited Prohibited

Matricula

Accept

Accept

Accept


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Bravo

Select

Accept

Accept


Foreign Passport

Accept

Accept

Accept


Permanent Resident Card

Accept

Accept

Accept


Voter Card or (EFIN)

Accept

Accept

Accept


Visa

Accept

Accept

Accept


3.1.2.

Any operator who is not a resident of Texas. Empower will accept a valid out of state driver’s license.

3.1.3.

Operators with suspended drivers licenses, revoked drivers licenses or occupational driver’s license, unless filing an SR-22.

3.1.4.

Any operator under the age of 16.

3.1.5.

Any operator who lives or works in Mexico.

3.1.6.

Migratory risks, including transient and seasonal workers.

3.1.7.

All entertainers, athletes, celebrities or any professional individual who is nationally or locally well known to a large segment of the population.

3.1.8.

A driver that has developed more than: 7 points for Select and Bravo policies. 10 points for Annual Savings, Enhanced and Priority policies.

3.1.9.

A policy that has developed more than: 10 points for Select and Bravo 15 points for Annual Savings, Enhanced and Priority.

3.1.10. Students residing and/or attending school in a state other than Texas. 3.1.11. Any person that represents Empower Insurance including employees, agents, producers, and any person in their household and/or immediate family members (father, mother, son, daughter, uncle, aunt, cousin, grandmother, grandfather) 3.1.12. If the insured moves out of the state during the policy period. The policy will be cancelled using the pro-rate method. 3.1.13 A driver with one (1) or more Major Violations that are not chargeable with points.

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3.1.14 A driver with two (2) or more Intermediate Violations that are not chargeable with points. 3.1.15 A driver with three (3) or more Minor Violations (including Speeding violations) that are not chargeable with points.

3.2.

VEHICLES 3.2.1.

Any vehicle used for business use of any kind. Including but not limited to: mobile services, sales, wholesale or retail delivery, emergency vehicles, carpentry, HVAC, electricians and electrical contracting, plaster, drywall, masonry, tile and marble work, plumbing, floor laying, glass work, landscaping, pest control, roofing, painting, or any vehicle owned or leased by a business(sole proprietor, partnership, LLC or corporation).

3.2.2.

Any vehicle not garaged in Texas.

3.2.3.

Any vehicle with a GVW (Gross Vehicle Weight) of greater than 10,000 lbs.

3.2.4.

Vehicles with less or more than four wheels.

3.2.5.

Vehicles used for racing or speed contests.

3.2.6.

Vehicles principally constructed of fiberglass, custom crafted bodies or kit car

3.2.7.

Vehicles titled to other than the named insured or persons named on the application.

3.2.8.

Vehicles with a current value in excess of $50,000.

3.2.9.

Recreational vehicles.

3.2.10. Rare, classic, vintage type vehicles. 3.2.11. For a list of unacceptable vehicles go to www.empowerins.com/agents/prohibited.html 3.2.12. Vehicles with permanent or removable business-solicitation logos or advertising.

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3.3.

COVERAGES 3.3.1.

Liability coverage cannot be written on vehicles over 35 years old.

3.3.2.

OTC and collision coverage on vehicles over 20 years old.

3.3.3.

OTC and collision coverage cannot be written without liability.

3.3.4.

Vehicles with Uninsured/Underinsured Motorist Coverage and Personal Injury Protection must have two current photos taken at the time of request for coverage, including vehicles added midterm where Uninsured/Underinsured Motorist Coverage and Personal Injury Protection are requested.

3.3.5.

OTC and collision coverage are not available separately.

4. ENDORSEMENTS 4.1.

Endorsements must be uploaded to be effective immediately. Coverage will be bound by the Company at the latter of the exact date and time the endorsement is signed and dated by both the applicant and agent or the recorded Empower system date and time the endorsement is uploaded.

4.2.

Endorsements are required to be processed in the Empower software system. Additional signed paperwork may be required and must have completed the electronic signature process. The insured must click, sign and complete the entire e-signature process. The insured signatures may not be completed by the agent, or agent representative. Faxed and/or mailed endorsements are not acceptable. If the agent does not process the endorsement in the Empower software system, the agent assumes the risk as the endorsement has not been properly processed.

4.3.

An Unacceptable Risk Surcharge will be assessed on the liability, OTC, and collision coverage if, during the policy term an unacceptable vehicle or driver is added to the policy.

4.4.

If an insured vehicle’s principle garaging address or primary area of operation is moved outside of Texas, or if the insured moves their residence outside the state of Texas during the term of the policy, the policy will receive an Unacceptable Risk Surcharge.

4.5.

Endorsements will not be processed without proper documentation and any additional premium.

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5. RENEWALS 5.1.

Renewal offers will be sent prior to expiration and non-renewal notices will be sent 30 days prior to the policy anniversary. To be renewed with no lapse in coverage, premium payment must be received or uploaded BEFORE the expiration date.

5.2.

The twelve month, six month or one month renewal can be paid in full or in an installment billing plan, both of which includes a fee per vehicle for the Texas Automobile Burglary and Theft Prevention Authority.

5.3.

If a renewal payment is received or uploaded within 30 days after the expiration date, the policy will be renewed with a lapse in coverage and will be subject to the rates in effect at time coverage is afforded. After 30 days, a new application is required.

6. CANCELLATIONS 6.1.

All cancellation requests by the insured must be in writing and signed by the named insured. The effective date of the cancellation may not be earlier than the date the cancellation request is received by Empower unless duplicate coverage has been verified.

6.2.

Flat cancellations are not permitted after inception of the policy, except for insufficient funds on the initial down payment and the renewal payment.

6.3.

If cancellation is requested due to duplicate coverage, a copy of the declaration page from the replacement insurance carrier indicating the effective date is required.

6.4.

All other cancellation premiums will be calculated on a pro-rata basis.

7. REINSTATEMENTS 7.1.

Reinstatement eligibility is available thru the Empower software system and the Empower required “No Loss” form must be completed thru the electronic signature process. The insured must click, sign and complete the entire e-signature process. The insured signatures may not be completed by the agent, or agent representative. If the policy is not eligible for reinstatement the system will inform you, and you may call Empower Underwriting for further details.

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7.2.

Cancellations for non-payment will be considered for reinstatement only if the amount past due is paid and the Empower required “No Loss” form is completed thru the electronic signature process.

7.3.

A new application must be submitted to re-start coverage on any denied reinstatement request.

7.4.

Policies that are cancelled for a lack of information or underwriting reasons may only be considered for reinstatement if the information or underwriting reason for cancellation is remedied and any past due amounts are paid.

8. SR22’S 8.1.

Empower Insurance is not responsible for any delays or lack of processing of the SR22 and/or reinstatement of a driver’s license.

8.2.

The Agent should make the insured aware that it is the applicant’s responsibility to make sure the filing fees are sent to the Texas Department of Public Safety directly and that the license is reinstated.

8.3.

It is the agent’s responsibility to advise their insured not to drive until the Texas Department of Public Safety has notified them that their driver’s license has been reinstated.

8.4.

A $25.00 fee will be charged for the SR22.

8.5.

An SR22 filing can only be made in the state of Texas.

8.6.

NO SR22A FILINGS ARE ALLOWED.

9. NAMED DRIVER EXCLUSIONS 9.1.

The named driver exclusion (515A) form must be completed thru the electronic signature process during the binding process for new business and/or when processing an endorsement if applicable. The insured must click, sign and complete the entire e-signature process. The insured signatures may not be completed by the agent, or agent representative.

9.2.

The exclusion must be completed for any family member, person to whom the vehicle is regularly available, or any resident of the household who is over 13 years old and is not listed as a driver on the policy.

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9.3.

Driver exclusion is permitted on a spouse if the named insured provides valid proof of marriage. If proof is not provided, the named insured will be rated as single. We recognize common law marriage with proof such as a joint checking account, common title to vehicles or residence, or submission of the Empower Certificate of Common Law Form.

10. DISCOUNTS All discounts given on a specific vehicle or policy will be applied to the liability, OTC, and collision coverage only, except as noted below. If the proof of eligibility for a specific discount is received after the policy is issued, the discount will be applied on a pro-rata basis. 10.1. PRIOR INSURANCE DISCOUNT A prior insurance discount will be applied, if the insured is able to provide verifiable proof of a minimum of six months continuous coverage, from a company other than Empower Insurance, immediately preceding this policy with no more than 30 days lapse in coverage. The following documentation is acceptable for proof of prior coverage: 1. Declarations Page 2. Renewal offer or Non-Renewal offer 3. Company generated ID Card 11. Letter of Experience on prior carrier letterhead 10.2. MULTI-CAR DISCOUNT A multi-car discount will be applied to like coverages on policies with more than one vehicle. 10.3. PREFERRED DRIVER DISCOUNT A preferred driver discount will be provided to any driver over the age of 24 that has been claims-free and accident-free for the preceding 36 month period. 10.4. FULL DISCLOSURE DISCOUNT All applicants proclaiming full and complete disclosure on the application will be awarded a full disclosure discount. This includes full and complete disclosure of all information on the application including, but not limited to driving experience, claims history, prior insurance, and listing or excluding all household/family members. -804.15.17


10.5. IN AGENCY RENEWAL DISCOUNT An in agency renewal discount will be applied, if the agent provides verifiable proof of at least six months continuous coverage, from a company other than Empower Insurance, immediately preceding this policy. The application and the prior insurance must originate from the same retail agency. There may be no lapse in coverage in order for the discount to be applied. 10.6. EFT DISCOUNT (Electronic Funds Transfer) A discount is provided for insureds that have their monthly premium deducted from a: checking, savings, or credit card account. EFT can be set up for the insured at any time during the policy period and the discount prorated. To receive the EFT discount, the agent must complete the online EFT form that will approve the transaction, and the applicant must sign the Empower EFT Form and submit it to Empower Insurance by fax or mail. Unapproved transactions can be submitted for review with a signed EFT form and a copy of a voided check mailed or faxed to Empower Insurance. The EFT discount is excluded from the maximum discount calculation. 10.7. HOMEOWNER DISCOUNT 10.6.1. A homeowner discount will be provided if the named insured owns his/her home. A copy of a homeowner’s declaration page or a tax statement with named insured as owner is acceptable. 10.6.2. A home can be described as a house, condominium, duplex, town home, or mobile home in which the named insured resides. 10.8. ADVANCE QUOTE DISCOUNT A discount is provided for insureds that have their policy quoted and issued prior to the date the policy is effective. To qualify for this discount the insured must qualify for the Prior Insurance Discount and have no lapse in coverage. This discount applies to all coverages except Towing and Labor, and Rental Reimbursement.

10.9

PAID IN FULL DISCOUNT A Paid-in-Full Discount will be applied to policies with a policy term of 6 months or greater that have had their entire policy term premium paid in full by the named insured on or before the beginning of that policy term’s -904.15.17


inception date. This discount cannot be combined with the EFT Discount. This discount is excluded from the maximum discount calculation.

11. DRIVER SURCHARGES Points will be based on the number of incidents on each operator. Include all violations, convictions, or accidents resulting from the use of any vehicle during the preceding 36 months. Incidents will be assigned by the rating software to the appropriate category. The maximum points allowed are: 7 points for a driver, 10 points for a policy on Bravo and Select policies. The maximum points allowed are: 10 points for a driver, 15 points for a policy on Annual Savings, Enhanced and Priority policies. All moving violations that result from a single incident will be charged. When When NOT Chargeable Chargeable With Points With Points

Violations / Points Table Major Violations – 1st Major Violations – 2nd & subsequent Driving While Intoxicated – 1st Driving While Intoxicated – 2nd & subsequent At Fault Accidents – 1st At Fault Accidents – 2nd At Fault Accidents – 3rd & subsequent Intermediate Violations – 1st Intermediate Violations – 2nd Intermediate Violations – 3rd & subsequent Minor Violations & Speeding – 1st Minor Violations & Speeding – 2nd Minor Violations & Speeding – 3rd & subsequent Unverifiable Driving Record

11.1

6 Ineligible

Ineligible Ineligible

6 Ineligible

N/A N/A

3 4 Ineligible

N/A N/A N/A

3 4 Ineligible

0 Ineligible Ineligible

N/A N/A N/A

0 0 Ineligible

5

N/A

INEXPERIENCED OPERATOR SURCHARGE Surcharge will apply to any driver over 19 years of age with less than 36 months driving experience.

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12. DRIVER ASSIGNMENT Policy rate is determined by assigning the highest rated driver to the highest rated vehicle and the second highest rated driver to the second highest rated vehicle, etc.

13. COVERAGES 13.1. LIABILITY Basic Bodily Injury/Property Damage coverage is offered at limits of BI ____________ 30,000/60,000

PD _______ 25,000

13.2. OTC / COLLISION – Not Available for Priority Policies. 13.2.1. In determining the premium for OTC and collision coverage, standard industry symbols (ISO) are used. A complete vehicle identification number (VIN) must be included on the application.

13.2.2. An Unacceptable Risk Surcharge will be applied to OTC and Collision premiums if OTC and collision coverage is requested on a vehicle with a current value in excess of $50,000.

13.3. UNINSURED/UNDERINSURED MOTORIST 13.3.1. Uninsured/Underinsured Motorist Bodily Injury coverage is written at limits of: Basic Uninsured/Underinsured Motorist Bodily Injury/Property Damage coverage is offered at limits of: UM/UIM BI UM/UIM PD ____________ __________ 30,000/60,000 25,000 A $250 deductible applies to the UMPD/UIMPD limit. 13.3.2. UM/UIM may be rejected in its entirety or the insured may elect to reject only the UMPD/UIMPD portion of the coverage. If the - 11 04.15.17


insured elects to reject all or part of the coverage, a rejection must be signed by the named insured or the coverage will be added to the policy and the applicable premium will be charged. 13.3.3. If UM/UIMBI an UMPD/UIMPD are selected on one vehicle, all other vehicles on a multi-car policy must have the coverage. 13.3.4 All vehicles that have UM/UIMBI must have two current photos taken the day of the application and submitted with the application or endorsement. Do not include UM/UIMBI on any vehicle until photos are completed. 13.4.

PERSONAL INJURY PROTECTION 13.4.1 Personal Injury Protection is available at a $2,500.00 limit. If the insured elects to reject the coverage, a rejection must be signed or the coverage will be added to the policy and the applicable premium will be charged. If Personal Injury Protection is selected on one vehicle, all other vehicles on a multi-car policy must have the coverage. 13.4.2 All vehicles that have PIP must have two current photos taken the day of the application and submitted with the application or endorsement. Do not include PIP on any vehicle until photos are completed.

13.5.

MEDICAL PAYMENTS Medical Payments may only be written with a limit of $500.00. If medical payments coverage is written on one vehicle, all vehicles on a multi-car policy must have the coverage. Medical Payments coverage cannot be written if Personal Injury Protection coverage has been selected.

13.6.

TOWING AND LABOR Towing and Labor is an optional coverage with an additional premium charge. Towing and labor coverage can only be written on a vehicle that has OTC and collision coverage. Coverage is a subject to maximum of $75 per disablement.

13.7.

RENTAL REIMBURSEMENT Rental Reimbursement is an optional coverage with an additional premium charge. Rental reimbursement coverage can only be written on a vehicle - 12 04.15.17


that has OTC and collision coverage. There is a maximum of $30/day coverage with a $900 maximum per occurrence. 13.8

MEXICO COVERAGE Mexico coverage pursuant to endorsement 551 - is included only on Priority policies. In some cases the coverage under this policy may NOT be recognized by Mexican authorities and the company many not be allowed to implement this coverage in Mexico. You should ask the insured to consider purchasing auto coverage from a licensed Mexican Insurance Company before driving in Mexico. This coverage does not apply to trips into Mexico that exceed 25 miles from the boundary of the United States of America.

14.

VEHICLE SURCHARGES 14.1. SPECIAL RISK VEHICLES - certain special risk vehicles will receive a surcharge on liability, OTC, and or collision premiums.

15.

SEVERE WEATHER PROCEDURES All submissions for new business and endorsements on existing policies that have an effect of increasing the company’s exposure are suspended from the time the National Weather Service issues a “watch” or “warning” related to any type of weather event. This suspension is applicable within 100 miles of the “watch” or “warning” area. Normal submission activity will be reinstated 24 hours after the “watch” and/or “warning” is lifted by the National Weather Service. It is the agent’s responsibility to be aware of all “watch” and “warning” issuance in their region. Empower does not have the responsibility to advise agents on weather events.

16.

UNDERWRITING QUALIFYING QUESTIONS Empower asks the following questions of an applicant prior to binding a policy. The applicant’s answers determine whether they are, or are not an acceptable risk for this program:

Acceptable

Not Acceptable

ARE ALL HOUSEHOLD MEMBERS ATTENDING SCHOOL LISTED OR EXCLUDED?

Yes

No

ARE ALL HOUSEHOLD MEMBERS OVER 13 LISTED OR EXCLUDED?

Yes

No

Underwriting Questions

DO YOU OWN YOUR OWN HOME?

Yes/No

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HAVE YOU FULLY DISCLOSED ALL INFORMATION PERTAINING TO CLAIMS, VIOLATIONS, VEHICLES AND DRIVERS OVER THE LAST 3 YEARS? ARE ALL VEHICLES GARAGED AND DO ALL DRIVERS RESIDE AT THIS ADDRESS? ARE ALL VEHICLES REGISTERED TO PERSONS LISTED ON THE APPLICATION?

Yes

No

Yes

No

Yes

No

No Yes/No - No Coverage

Yes

DOES ANY VEHICLE HAVE MORE THAN FOUR WHEELS (DUALLIES)?

No

Yes

IS ANY VEHICLE AN ANTIQUE OR CLASSIC?

No

Yes

HAS ANY DRIVER HAD A VEHICLE STOLEN IN THE LAST 5 YEARS? DOES ANY DRIVER, NOT APPLYING FOR AN SR-22, HAVE A SUSPENDED, REVOKED, EXPIRED, DENIED OR OCCUPATIONAL DRIVERS LICENSE?

No

Yes

No

Yes

ARE ANY VEHICLES USED FOR BUSINESS USE OF ANY KIND? DOES ANY VEHICLE HAVE ADDITIONAL OR NON FACTORY INSTALLED EQUIPMENT? PLEASE NOTE WE DO NOT COVER CUSTOM EQUIPMENT.

17.

AMEN DATORY POLICY ENDORSEMENTS 17.1.1.

This program utilizes amendatory endorsements approved by the Texas Department of Insurance that contain more limited coverage than the Texas Standard Personal Automobile Policy, as allowed by the Texas Legislature on June 11, 2003. The amendatory endorsements utilized are.

Amendatory Endorsement: AIC.PhysDam.001

Priority

Enhanced

-

X

Annual Savings -

AIC.AuthDriv.003

-

-

AIC.Storage.004

-

AIC.DelFee.005

Bravo

Select

-

-

X

-

-

X

X

X

-

X

X

-

-

-

AIC.ContLiab.006

X

X

X

-

-

AIC.AutoTerm.007

X

X

X

-

-

AIC.CP.013

-

-

X

-

-

AIC.OutOfState.016

X

X

X

-

-

AIC.RentProp-NOAuto.019

X

X

X

-

-

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AIC.PhysDam.001 – PHYSICAL DAMAGE ENDORSEMENT The parties agree to the following amendment to the policy: The Limit of Liability provision contained in Part D – Coverage for Damage to Your Auto of this policy is deleted and replaced by the following: PART D – COVERAGE FOR DAMAGE TO YOUR AUTO LIMIT OF LIABILITY Our limit of liability for loss will be the lesser of the following: 1. Actual cash value of the stolen or damaged property, at the time of the loss. An adjustment for depreciation and physical condition will be made in determining the actual cash value in the event of a total loss; 2. the amount necessary to restore (through repair and/or replacement) the property to its pre-loss condition with other property of like kind and quality; 3. the amount you paid for the vehicle in the event of a total loss; or 4. the amount stated in the Declarations of this policy. All claims submitted under Part D – Coverage for Damage to Your Auto will be subject to any applicable deductible shown in the Declarations and reduced by any salvage value if you retain the salvage. Custom or additional equipment is not covered under Part D – Coverage for Damage to Your Auto unless you have reported the value to us prior to the loss and paid a premium for the custom or additional equipment as shown in the Declarations Page. Diminution in Value is not covered under Part D – Coverage for Damage to Your Auto. If a repair or replacement results in better than like kind or quality, we will not pay for the amount of the betterment. At the mutual agreement of you and us, we will not apply the applicable deductible for a glass loss if the glass is repaired rather than replaced. The following Definitions are added as applied to this endorsement: DEFINITIONS 1. “Loss” means sudden, direct and accidental damage. 2. “Total Loss” means a loss which, in our judgment, is not economically repairable, and includes actual loss or disappearance of your auto. 3. “Custom or additional equipment” means any equipment which was not installed at the factory. 4. “Diminution in Value” means the reduction in market or resale value that results from a loss after the necessary repairs are made to the vehicle. 5. “Betterment” means an improvement that results in greater value than before the loss occurred.

AIC.AuthDriv.003 – AUTHORIZED DRIVER ENDORSEMENT The parties agree to the following amendment to the policy: Part D – Coverage for Damage to Your Auto of this policy is amended by adding the following language as Part C to the Insuring Agreement provision:

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PART D – COVERAGE FOR DAMAGE TO YOUR AUTO INSURING AGREEMENT C. For coverage to exist under Part D – Coverage for Damage to Your Auto, your covered auto must be operated by or in the control of an authorized driver at the time of the loss. As used in this Part, “authorized driver” shall mean: a. you; or b. any other person listed in the Declarations or added by endorsement during the policy term prior to loss. As used in this Part, “control” shall mean the direct and immediate pre-loss care and custody of your covered auto.

IMPORTANT NOTICE NAMED DRIVER POLICY WARNING (Texas Ins. Code §1952.0545) WARNING: A NAMED DRIVER POLICY DOES NOT PROVIDE COVERAGE FOR INDIVIDUALS RESIDING IN THE INSURED’S HOUSEHOLD THAT ARE NOT NAMED ON THE POLICY

AIC.Storage.004 – STORAGE ENDORSEMENT The parties agree to the following amendment to the policy: The following general duty is added to Part E – Duties after an Accident or Loss: PART E – DUTIES AFTER AN ACCIDENT OR LOSS GENERAL DUTIES Anyone seeking coverage under this policy must authorize us to move the damaged vehicle to a storage facility of our choice at our expense.

AIC.DelFee.005 – DELIVERY OF PERSONS AND PROPERTY FOR A FEE ENDORSEMENT The parties agree to the following amendment to the policy: Exclusion A.5 of Part A Liability Coverage of this policy is deleted and replaced by the following: PART A – LIABILITY COVERAGE EXCLUSIONS A. We do not provide Liability Coverage for any person: 5. For that person’s liability arising out of the ownership or operation of a vehicle while it is: a. being used to carry persons for a fee; this does not apply to a share-the-expense car pool.

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b. being used to carry property for a fee or any compensation, including but not limited to delivery of goods, either on a wholesale or retail basis, such as food, publications, money, or flowers. c. rented or leased to another or available in any way for public hire; this does not apply if you or any family member lends your covered auto to another in exchange for reimbursement of operating expenses only. Exclusion 1 of Part D – Coverage for Damage to Your Auto of this policy is deleted and replaced by the following: PART D – COVERAGE FOR DAMAGE TO YOUR AUTO EXCLUSIONS We will not pay for: 1. Loss to your covered auto while it is: a. being used to carry persons for a fee; this does not apply to a share-the-expense car pool. b. being used to carry property for a fee or any compensation, including but not limited to delivery of goods, either on a wholesale or retail basis, such as food, publications, money, or flowers. c. rented or leased to another or available in any way for public hire; this does not apply if you or any family member lends your covered auto to another in exchange for reimbursement of operating expenses only.

AIC.ContLiab.006 – CONTRACTUAL LIABILITY EXCLUSION ENDORSEMENT The parties agree to the following amendment to the policy: The following exclusion is added to Part A – Liability Coverage: PART A – LIABILITY COVERAGE EXCLUSIONS We do not provide Liability Coverage for any person for bodily injury or property damage assumed by or imposed on a covered person under any agreement, contract or bailment.

AIC.AutoTerm.007 – AUTOMATIC TERMINATION ENDORSEMENT The parties agree to the following amendment to the policy: Part F – General Provisions is revised by adding the following language to C. Automatic Termination: PART F – GENERAL PROVISIONS TERMINATION C. Automatic Termination 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. The termination will correspond with the time that possession or title is conveyed to the new owner.

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AIC.CrimeIntent.008 – CRIMINAL OR INTENTIONAL ACTS ENDORSEMENT The parties agree to the following amendments to the policy: The following Exclusion Provision is added to Part F – General Provisions: PART F – GENERAL PROVISIONS GENERAL EXCLUSIONS A. We do not provide any coverage for any person for bodily injury or property damage caused by or sustained: 1. In an incident caused by or at the direction of that person with the intent to injure person or property. 2. While in the commission of a felony. 3. While attempting to elude arrest by a law enforcement official. B. We will not pay for loss to your covered auto for damages sustained: 1. Due to or caused by a willful or intentional act by or at the direction of you, a family member or anyone with your express or implied permission. 2. While in the commission of a felony. 3. While attempting to elude arrest by a law enforcement official. Exclusions B.2. and B.3. of this section apply only while your covered auto is being used by you, a family member, or anyone with your express or implied permission.

AIC.CP.013 - COVERED PERSON ENDORSEMENT The parties agree to the following amendment to the policy: In Part A - Liability Coverage, Insuring Agreement B. “Covered person” is deleted and replaced by the following: PART A - LIABILITY COVERAGE INSURING AGREEMENT B. “Covered person” as used in this Part means: 1. You, for the ownership, maintenance or use of any auto or trailer. 2. Any family member or resident of your household who is listed in the Declarations or added by endorsement during the policy term prior to loss for the ownership, maintenance or use of any auto or trailer. 3. A person who is not a family member or resident of your household but is using your covered auto with your express or implied permission. As used in this Part, “resident” shall mean any person living in your household other than you or a family member. In Part A - Liability Coverage, Exclusions, the following is added as Exclusion D: PART A - LIABILITY COVERAGE EXCLUSIONS D. None of the liability coverages afforded by this policy shall apply while any person who is not a covered person is operating your covered auto or any other vehicle.

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IMPORTANT NOTICE NAMED DRIVER POLICY WARNING (Texas Ins. Code §1952.0545) WARNING: A NAMED DRIVER POLICY DOES NOT PROVIDE COVERAGE FOR INDIVIDUALS RESIDING IN THE INSURED’S HOUSEHOLD THAT ARE NOT NAMED ON THE POLICY

AIC.OutOfState.016 - RESTRICTED OUT OF STATE COVERAGE ENDORSEMENT The parties agree to the following amendments to the policy: Part A - Liability Coverage of this policy is amended by deleting and replacing Part A of the Out of State Coverage Provision with the following: PART A - LIABILITY COVERAGE OUT OF STATE COVERAGE If an auto accident to which this policy applies occurs in any state or province other than the one in which your covered auto is principally garaged, we will interpret your policy for that accident as follows: A. If the state or province has: 1.

A financial responsibility or similar law specifying limits of liability for bodily injury or property damage higher than the limit shown in the Declarations, your policy will provide the higher specified limit.

2.

A compulsory insurance or similar law requiring a nonresident to maintain insurance whenever the nonresident uses a vehicle in that state or province, your policy will provide at least the required minimum amounts for bodily injury or property damage as specified by the state or province.

Part B1 - Medical Payments Coverage, Part B2 - Personal Injury Protection and Part C - Uninsured/Underinsured Motorists Coverage of this policy are amended by adding the following to each part: PART B1 - MEDICAL PAYMENTS COVERAGE PART B2 - PERSONAL INJURY PROTECTION PART C - UNINSURED/UNDERINSURED MOTORISTS COVERAGE OUT OF STATE COVERAGE This coverage shall not be modified by the law of the state where the covered person sustains injury or damage caused by an auto accident.

AIC.RentProp-NOAuto.019 - RESTRICTED RENTED PROPERTY AND NONOWNED AUTO ENDORSEMENT The parties agree to the following amendment to the policy: Exclusion A.3 of Part A - Liability Coverage of this policy is deleted and replaced by the following: PART A - LIABILITY COVERAGE EXCLUSIONS

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A. We do not provide Liability Coverage for any person: 3.I. For damage to property: a. rented to; b. used by; or c. in the care, custody or control of that person. 3.II. This exclusion (A.3.I.) does not apply to damage to a rented residence or rented private garage caused by your covered auto. This exclusion does, however, apply to any and all damage to any vehicle you rent, use, or borrow, regardless of cause or fault.

17.1.2.

18.

The agent must explain the policy features and limitation disclosure to the consumer and have the applicant sign the “Policy Features and Limitations Disclosure” that prints with the application. The “policy Features and Limitations Disclosure” appears as follows:

CLAIMS All claims should be reported directly to the company as soon as possible by telephone to 1-877-437-5007. The agent is not to discuss any claims related item with the insured or the claimant. If an agent chooses to discuss the loss, the agent assumes responsibility for payment of the loss. The agent is not licensed to manage claims and is not a representative of the Empower MGA claims department. The agent has no authority to discuss, review, coach, advise, or determine coverage.

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Annual

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