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MASSACHUSETTS PROPERTY INSURANCE UNDERWRITING ASSOCIATION MASSACHUSETTS PROPERTY INSURANCE
UNDERWRITING ASSOCIATION
Underwriting Division
Two Center Plaza
Boston, Massachusetts 02108-1904
(617) 723-3800, MA Only (800) 392-6108, FAX (617) 557-5678
Did you check your smoke detectors today!
October 31, 2007
To: All Massachusetts Producers
RE: Homeowners Program
Revision to the Minimum Windstorm or Hail Deductible Requirement Rule
Effective Date: December 15, 2007
The Massachusetts Property Insurance Underwriting Association has received approval from the
Massachusetts Division of Insurance to revise the current Minimum Windstorm or Hail Deductible
Requirement Rule which is applicable to all Homeowners HO 02, 03 and 05 policies.
Enclosed are Homeowners Policy Program MPIUA Exception Pages (MPIUA-HO-EXC-1) thru
(MPIUA-HO-EXC-3) and our Quick Reference Sheet, which detail the revised rule.
The revised rule amends the Minimum Percentage Windstorm or Hail Deductible in Barnstable,
Dukes and Nantucket Counties as follows: In Barnstable County, for risks located within � mile from the coast, the current
Minimum Percentage Windstorm or Hail Deductible of 1% applicable when the
Coverage A Limit is up to $199,000 has been revised to 2%. For risks located more
than a � mile from the coast, the current Minimum Percentage Windstorm or Hail
Deductible of 1% applicable when the Coverage A Limit is up to $499,000 has been
revised to 2%. (See Rule 406.D.3. Table A) In Dukes and Nantucket Counties the current Minimum Windstorm or Hail Deductible of
2% applicable when the Coverage A limit is $200,000 to $599,000 has been revised to
a Minimum Windstorm or Hail Deductible of 5%. (See Rule 406.D.3. Table A)
The revised rule also provides that the applicable Minimum Windstorm or Hail Deductible as shown
in Rule 406.D.3. (Table A and Table B) may be removed or reduced as shown in Rule 406.D.5.
(Table C) if the insured has taken all or some of the required mitigation measures as shown in Rule
406.D.7. If the Windstorm or Hail Deductible is removed or reduced due to mitigation steps taken
by the insured, the deductible factor used in the calculation of the policy premium will be based on
the original Minimum Windstorm or Hail Deductible applicable as shown in Rule 406.D.3. Thus,
mitigation efforts in addition to eliminating or reducing the Windstorm Or Hail Deductible also
provide premium relief. Examples 1 and 2 on MPIUA Exception Page MPIUA-HO-EXC-2 provide
details on premium computation when the Minimum Windstorm or Hail Deductible is removed or
reduced. To assist producers in determining if a coastal address is located within a mandatory percentage
deductible area, the Association provides the ability to determine the distance to the coast through
its website located at www.mpiua.com. This functionality, along with instructions for its use, can be
viewed on the Producer Home Page which is accessed through the Producer Login link and
requires a user name and password. Producers must utilize this system, as the Association's
Customer Service Department will not provide information regarding proximity to the coast for
specific locations.
These changes will be effective for all new and renewal policies with an inception date of
December 15, 2007 or later. If you have any questions regarding this letter, please contact the
Association's Customer Service Department.
Very truly yours,
James H. Pappas
Vice President Underwriting
JHP:pd
Enclosures
Letters to Agents-MA/Wind/Hail Deductible/HO Eff 12.07 MASSACHUSETTS (20)
HOMEOWNERS POLICY PROGRAM MANUAL
MPIUA EXCEPTION PAGE
ADDITIONAL EXCEPTIONS (S) TO GENERAL RULES
406. DEDUCTIBLES
The following is added to paragraph
C.3.b
.
Higher Fixed-
Dollar Deductibles:
Deductible amount of $500 is also available with the
following deductible factors:
$500 Windstorm or Hail Deductible
Coverage A Limit
All
Other
Perils
$60,000
$100,000
Ded.
Up to
to
to
$200,001
Amount $59,999
99,999
200,000
and over
$ 100
1.06
1.07
1.08
1.08
$ 250
.98
.98
.99
.99
The following paragraph is added:
D. Minimum Windstorm or Hail Deductible
Requirement -
All Forms Except HO 00 04 and HO 00 06
1. For a reduced premium, a minimum Windstorm
or Hail deductible applies to all policies provided
that the dollar amount of the minimum deductible
according to this rule exceeds the amount of the
deductible applicable to All Other Section I
perils.
This minimum deductible varies by
Coverage A limit and distance of the property
from the coast as shown in Table A and Table B.
The Named Insured may select a higher fixed-
dollar deductible or a percentage deductible
with a dollar amount that exceeds the
applicable
Minimum Windstorm or Hail
Deductible amount.
2. To compute the premium for this provision, use
the Coverage A limit and location of the risk to
determine the applicable Minimum Windstorm or
Hail Deductible and then follow the instructions
given in C.3.a. (5) and C.3. a. (6) for a
percentage deductible and in C.3.b. (4) and
C.3.b. (5) for a higher fixed-dollar deductible
.
Minimum Windstorm Or Hail Deductible By Coverage A
Limit And Distance Of The Property From The Coast
Table A
Cov A
Entire
Barnstable County
Rest of State
Amt In
Dukes &
With in
More than With in
More than
(000)
Nantucket � mile
� mile
� mile
� mile
Counties
of Coast from Coast of Coast from Coast
Up to 99
2%
2%
2%
1%
S
100 199
2%
2%
2%
1%
E
200 299
5%
2%
2%
1%
E
300 399
5%
2%
2%
1%
400 499
5%
2 %
2%
1%
T
500 599
5%
2%
2%
2%
A
600 699
5%
5%
2%
2%
B
700 799
5%
5%
2%
2%
L
800 899
5%
5%
2%
2%
E
900 999
5%
5%
2%
2%
1000
5%
5%
2%
2%
B
Table B
All
Coverage A Limit
Other
Perils
$60,000
$125,000
$250,000
Ded.
Up to
to
to
to
$600,000
Amount $59,999
124,999
249,999
599,999
and Over
$ 100
NONE
$500
$1000
$2000
$5000
$ 250
NONE
$500
$1000
$2000
$5000
$ 500
NONE
NONE
$1000
$2000
$5000
$1000
NONE
NONE
NONE
$2000
$5000
$2500
NONE
NONE
NONE
NONE
$5000
The Minimum Windstorm or Hail Deductible as shown in
Table A and B may be removed or reduced as shown in
Table C below if the Insured has taken all or some of the
required measures (See D.7.) to protect their home from wind
damage.
MPIUA-HO-EXC-1
4
th
Edition Effective 07 01 07
Massachusetts Property Insurance Underwriting Association
3.
4
. MASSACHUSETTS (20)
HOMEOWNERS POLICY PROGRAM MANUAL
MPIUA EXCEPTION PAGE
5. Requirements for Removal or Reduction of Minimum
Windstorm or Hail Deductible
Table C
(1)
(2)
(3)
Windstorm or Hail
Deductible
Revised
Requirement
Windstorm or Hail
Mitigation
As Per Rule
Deductible
Steps Taken
(406.D.3.)
Requirement
All (D.7.i-v)
Any
All Perils Deductible
Roof & Foundation
5%
1%
(D.7.v)
2%
All Perils Deductible
1%
All Perils Deductible
5,000
1,000
2,000
All Perils Deductible
1,000
All Perils Deductible
Roof Only
5%
2%
(D.7.v)
2%
1%
1%
All Perils Deductible
5,000
1,000
2,000
500
1,000
All Perils Deductible
All Windows &
5%
2%
All Glass Doors
2%
1%
(D.7.i-iii)
1%
All Perils Deductible
5,000
1,000
2,000
500
1,000
All Perils Deductible
6. If the Windstorm or Hail Deductible is removed or
reduced as per column (3), for premium computation use
the Windstorm or Hail Deductible Factor corresponding to
the applicable Minimum Windstorm or Hail Deductible
shown in column (2).
Example (1): Consider a home in Dukes County
with Coverage A Amount of $250,000 and All Perils
Deductible of $500. According to the Rule 406. D. 3.
Table A, a Minimum Windstorm or Hail Deductible of
5% will apply to the policy. To compute the premium
for this provision i.e. All Perils Deductible of $500
and Windstorm or Hail Deductible of 5% with
Coverage A Amount of $250,000 multiply the Base
Premium with the Deductible Factor of .89 (i.e. a
credit of 11%) according to the Rule 406. C.3.a. (6).
See Table 406.C.3.a.(6)#3.
Suppose the insured has taken the required
mitigation
steps
for
Roof
&
Foundation
connections (D.7.v.) only. Then the Windstorm or
Hail Deductible of 5% is reduced to 1% as per
Column (3) of Rule 406. D. 5. Table C. For
premium computation, in lieu of using Deductible
Factor of .93 (i.e. a credit of 7%) corresponding to
All Perils Deductible of $500 and Windstorm or
Hail Deductible of 1%, see Table 406.C.3.a.(6)#1,
use the Deductible Factor of .89 (i.e. a credit of
11%) corresponding to the All Perils Deductible of
$500 and Windstorm or Hail Deductible of 5% as
provided in Rule 406. D. (6).
Example (2): Consider a home in Barnstable
County with a Coverage A Amount of $250,000
and All Perils Deductible of $500. According to the
Rule 406. D. 3. Table A, a Minimum Windstorm or
Hail Deductible of 2% will apply to the policy. To
compute the premium for this provision i.e. All
Perils Deductible of $500 and Windstorm or Hail
Deductible of 2% with Coverage A Amount of
$250,000 multiply the Base Premium with the
Deductible Factor of .91 (i.e. a credit of 9%)
according to the Rule 406. C.3.a. (6). See Table
406.C.3.a.(6)#2.
Suppose the insured has taken the required
mitigation
steps
for
Roof
&
Foundation
connections (D.7.v.) only. Then the Windstorm or
Hail Deductible of 2% is removed and the policy is
then subject to All Perils Deductible of $500 as per
Column (3) of Rule 406. D. 5. Table C. For
premium computation, in lieu of using Deductible
Factor of .96 (i.e. a credit of 4%) corresponding to
All Perils Deductible of $500 with Coverage A
Amount of $250,000, see Table 406.C.1, use the
Deductible Factor of .