Atlantic Mutual Reducing Deductibles to Reward Claim-Free Homeowners and Drivers

July 22, 2004

Atlantic Mutual Insurance Co.announced that it will reduce home and auto insurance policy deductibles by 10 percent for many customers each year they are claim-free╦ťproviding long-term savings.

“So many of our customers take good care of their homes and cars, and this innovative feature rewards them for being good personal risk managers,” noted Dan Olmsted, the company’s president.

Atlantic Mutual homeowners policyholders with a $2,500 deductible or more receive a 10 percent credit in their “deductible reserve” for every year they are loss-free. Auto insurance policyholders with a $1,000 deductible or more also qualify for the 10 percent credit.

When customers do have a claim, the amount they have built up in their “deductible reserve” effectively reduces the out-of-pocket deductible they must pay.

Here is an example of how the feature works:

— An Atlantic Mutual homeowners insurance customer chooses a $2,500 deductible for his/her $750,000 home. (The policy premium is $470 less than if the customer chooses a $500 deductible, generating immediate savings.)

— Each year the customer is claim-free, 10 percent of the deductible amount is credited to his/her “deductible reserve” in effect, reducing the deductible by $250 each year.

— Suppose the customer made a claim in the fifth year. The “reserve” (growing by $250 each year for four years) would reduce the deductible from the initial amount of $2,500 to $1,500. After 10 claim-free years, the deductible would be $0.

Since insurance industry statistics show that homeowners, on average, file a claim on a covered loss only once every 11 years, there is a good chance that their deductible will be practically eliminated.

The 10 percent deductible reserve is available in most states where Atlantic Mutual operates except New York. Consumers can contact any Atlantic Mutual agent for information.

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