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MAX Bulletin

Bulletin for MAX Agents

Date:  September 14, 2015                                                             Bulletin No.:  15-007
State(s):  Pennsylvania
Line(s) of Business:  Farmowners

MutualAid eXchange (MAX) is adopting a number of Farmowners form changes filed on our behalf by the American Association of Insurance Services (AAIS).  These changes, described below, are effective 11/1/2015 for new and renewal business.  In addition to the form changes described below, MAX is introducing a rate factor of 0.99 to be applied to our Cosmetic Loss Exclusion forms: FO M115 (applicable to the dwelling) and IL M115 (applicable to farm buildings).
Endorsement GL 4100, Exclusions - Asbestos, excludes coverage for bodily injury, property damage, and loss, cost, or expense arising out of asbestos.
FO 1310 05 15 Amendment of Policy Terms endorsement is also being introduced. The endorsement will apply regardless of whether the GL-2 or the GL-610 applies.
The amendment of policy terms endorsement includes the following amendments:
  • The earth movement exclusions contained in FO-20 and FO 0005 are revised. The changes include a statement indicating that the exclusion applies whether the earth movement results from a natural cause, a manmade cause, or a combination thereof. In addition, its restated terms identify a number of manmade causes to which the exclusion applies (such as hydraulic fracturing), although the excluded manmade causes are not limited to those identified.
  • When forms FO-3 or FO 0005 apply, the Incidental Coverage for Collapse is revised to specify that collapse means an abrupt caving in, falling in, falling down, or giving way of a building or a part of a building. The form specifies what does and does not constitute collapse.
  • When forms FO-3 or FO 0005 apply, the form excludes coverage for loss involving collapse, rather than loss caused by collapse. The form specifically excludes loss involving an abrupt caving in falling down, or giving way, as well as impairment of structural integrity.
  • In form FO-6, the collision peril is revised to exclude damage to belts and tracks.
  • Under the GL-2 and GL-610, The Liability Coverage grant is revised to state that the company will pay, up to the limit that applies, those sums (rather than all sums) for which an insured is liable because of bodily injury or property damage caused by an occurrence to which Coverage L applies. In addition the company will provide a defense at its expense by counsel they choose. In addition, it is clarified that the company will not pay for the insured’s attorney’s fees or expenses. Endorsements HO 1302 01 15, HO 1303 01 15, HO 1304 01 15, HO 1305 01 15, and HO 1306 01 15 also introduce the following amendments:
  • In both the GL-2 and GL-610, the exclusion for BI or PD that is expected by, directed by, etc. an insured is revised to specifically state that there is no coverage for anyone who is an insured under the policy for BI or PD that is expected by, directed by, etc. any insured, regardless of the theory of relief pursued. The revised language provides that the exclusion applies even if the damage is different than what was expected, directed or intended.
  • A Coverage L and Coverage M exclusion is added for bodily injury or property damage arising out of electronic aggression.
The following optional endorsements are included in these filings:
  • FO 0362 05 15 Special Form Coverage – Farm Barns, Buildings And Structures. This form is revised to change the exclusion for collapse and modify the Coverage For Collapse to align with the changes described above.
  • FO 2001 05 15 Roof Surfacing Amendment – Actual Cash Value Terms.  This optional endorsement and rule will replace our independent form IL M107 Roof Coverage – Actual Cash Value Limitation.  As with the MAX endorsement, the FO 2001 changes the loss settlement terms that apply to the roof surfacing of buildings covered under Coverage A and B from replacement cost coverage to actual cash value coverage for loss caused by a covered peril.  A rate factor of 0.97 will be applied.
  • GL 4000 05 15 Exclusion - Raw Milk. This endorsement excludes bodily injury or property damage resulting from the production, processing, packaging, distribution, trade, or sale of raw or unpasteurized milk or milk products.
  • GL 4001 05 15 Additional Insured - Lessor of Leased Equipment – Automatic Status. The amendment to the definition of insured can automatically include all persons or organizations from whom the named insured has leased equipment and with whom the named insured has entered into a written contract or agreement specifying that such person or organization be added as an additional insured.
  • GL 4002 05 15 Additional Insured - Lessor of Leased Equipment. The amendment to the definition of insured includes the person or organization indicated but only with respect to such person’s or organization’s liability for bodily injury or property damage arising out of the maintenance, operation, or use of leased equipment.
  • GL 4003 05 15 Exclusion - Canine. This endorsement excludes bodily injury and property damage arising out of direct physical contact with described canine(s) owned by or in the care, custody, or control of an insured.
Direct Rate, Rule                                                                            Direct Underwriting
or Form Questions to:                                                                             Questions to:
Scott Gillaspie                                                                                            Chris Vardiman
Director of Compliance                                                                    Underwriting Manager                                                                                                                       
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