NU Online News Service, Dec. 29, 3:01 p.m. EST
The American Association of Insurance Services (AAIS) has developed a countrywide filing of a new earthquake rating plan under its homeowners program.
The AAIS said the plan provides state-specific loss cost base amounts and rating factors that vary by zone to reflect a risk's location and type of construction, as well as the policy form, deductible, and amount of insurance.
To produce the plan, AAIS said its actuarial staff "built upon modeled data to develop loss costs and rating factors that will allow most carriers to price earthquake exposure more precisely than in the past," which could make earthquake coverage more attractive to homeowners.
"This new rating plan includes features not found in other standardized programs," said Greg Jaynes, AAIS chief actuary in a statement. "Among other things, we have developed premium credits for frame construction, which is generally more flexible than masonry construction and, therefore, more resistant to earthquake damage. These frame factors vary by earthquake zone for greater accuracy. We've also introduced rating factors for the age of a structure and the number of stories, as well as premium credits for certain loss mitigation features on older homes."
The earthquake plan is available for use by any homeowners insurer, including those not affiliated with AAIS for use of its homeowners program.
AAIS describes itself as a national advisory organization that develops policy forms and rating information used by more than 600 property and casualty insurers throughout the United States.
Additional information is available by contacting Rick Maka at [email protected].
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