The American Association of Insurance Services (AAIS) has begun filing Homeowners and Farmowners manual supplements that will provide an expanded series of premium credit and surcharge factors related to the age of a home and its utility systems.
AAIS is the only advisory organization to provide such factors, which companies typically have to develop on their own.
The revised manual supplement will expand on AAIS’s existing “new home factors” by adding:
*A premium surcharge factor for homes older than 40 years;
*A provision exempting an older home from the surcharge if its heating and cooling systems have been updated or replaced in the previous 10 years, and if a circuit breaker or fuse panel has also been replaced within the past 10 years; and
*A provision making an older home eligible for a premium discount if its plumbing, electrical, heating, and cooling systems have all been updated or replaced within the previous 15 years.
For the purposes of selecting a premium credit factor, the earliest year any of the systems were updated is considered the age of the home.
“We’re expanding on the concept of ‘new home credits’ to allow companies to provide both credits and debits for the age of a home,” Jeff Holoway, AAIS manager of pricing for personal lines, commented. “At the same time, we provide a way for the owners of older homes to qualify for credits, if they replace certain systems.”
Since the age of home factors are provide in a manual supplement rather than incorporated into the Homeowners manuals, companies can easily choose whether to adopt them or use their own factors, Holoway added.
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