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Common Policy Conditions

Actual Policy Language

Explanation

Common Policy Conditions (Form IL 00 17)

Common Policy Conditions (Form IL 00 17)

The Common Policy Conditions are usually found on a separate endorsement attached to the policy. They apply not only to this policy, but to most other ISO policy forms.

A.  Cancellation

1. The first Named Insured shown in the Declarations may cancel this policy by mailing or delivering to us advance written notice of cancellation.

2. We may cancel this policy by mailing or delivering to the first Named Insured written notice of cancellation at least:

a. 10 days before the effective date of cancellation if we cancel for nonpayment of premium; or

b. 30 days before the effective date of cancellation if we cancel for any other reason.

3. We will mail or deliver our notice to the first Named Insured's last mailing address known to us.

4. Notice of cancellation will state the effective date of cancellation. The policy period will end on that date.

5. If this policy is cancelled, we will send the first Named Insured any premium refund due. If we cancel, the refund will be pro rata. If the first Named Insured cancels, the refund may be less than pro rata. The cancellation will be effective even if we have not made or offered a refund.

6. If notice is mailed, proof of mailing will be sufficient proof of notice.

A. Cancellation or Nonrenewal

Paragraphs 2 and 5 are replaced by endorsement CA 02 43 (Texas Changes – Cancellation and Nonrenewal) to provide for the cancellation provisions required by Texas law.  In addition, the endorsement adds nonrenewal provisions in accordance with Texas law.

The first named insured is the only one authorized to request cancellation of the policy.  The insurance company can satisfy the notice requirement by addressing it only to the first named insured, at the last known mailing address.  Proof of mailing is sufficient to effect cancellation; evidence of receipt by the insured is not required.

A new policy can be canceled for any reason if notice is mailed within 60 days of policy inception (not a renewal).  The company must state the reason for cancellation on the notice.  After the policy has been in effect for 60 days, the company may cancel only for one of the 5 reasons shown, including fraud in obtaining coverage, nonpayment of premium, increase in hazard, loss of reinsurance and insolvency of the insurer.  A renewal policy may not be canceled for any reason except one of these.

The company must give at least 60 days advance notice of nonrenewal.  If notice is mailed less than 60 days prior to the expiration date, the policy is automatically extended to the 60th day and earned premium may be charged for the period of coverage extending past the expiration date; premium should be based on the expiring rates.

The Texas Department of Insurance has offered their opinion that moving from one company of a company group to another is not allowed except at the insured's request or after compliance with the nonrenewal provisions. 

B. Changes

This policy contains all the agreements between you and us concerning the insurance afforded. The first Named Insured shown in the Declarations is authorized to make changes in the terms of this policy with our consent. This policy's terms can be amended or waived only by endorsement issued by us and made a part of this policy.

B. Changes

Only the first named insured (or its authorized representative) can request changes in the policy.  Any changes must be approved by the company and made a part of the policy by endorsement. 

C. Examination of Your Books and Records

We may examine and audit your books and records as they relate to this policy at any time during the policy period and up to three years afterward. 

C. Examination of Your Books and Records

Several exposures in the Auto Dealers program are subject to premiums based on estimated exposures.  The actual exposures are then determined after expiration to compute a final premium.  The company retains the right to audit the insured's books and records for up to three years after the policy expires. 

D.  Inspections And Surveys

1. We have the right to:

a. Make inspections and surveys at any time;

b. Give you reports on the conditions we find; and

c. Recommend changes.

2. We are not obligated to make any inspections, surveys, reports or recommendations and any such actions we do undertake relate only to insurability and the premiums to be charged. We do not make safety inspections. We do not undertake to perform the duty of any person or organization to provide for the health or safety of workers or the public. And we do not warrant that conditions:

1. Are safe or healthful; or

b. Comply with laws, regulations, codes or standards.

3. Paragraphs 1. and 2. of this condition apply not only to us, but also to any rating, advisory, rate service or similar organization which makes insurance inspections, surveys, reports or recommendations.

4. Paragraph 2. of this condition does not apply to any inspections, surveys, reports or recommendations we may make relative to certification, under state or municipal statutes, ordinances or regulations, of boilers, pressure vessels or elevators.

D. Inspections

This provision establishes the right of the company to make inspections and surveys of the insured's operation, but makes it clear they have no obligation to do so.  It is also a disclaimer by the company of any responsibility for health or safety violations by an insured, even if such violations are discovered during a routine loss control inspection.  Likewise, the company assumes no responsibility for failing to detect any unsafe conditions during an inspection.

E. Premiums

The first Named Insured shown in the Declarations:

1. Is responsible for the payment of all premiums; and

2. Will be the payee for any return premiums we pay.

E. Premiums

Only the first named insured is responsible for payment of the premium.  For this reason, agents should attempt to name the least "judgment proof" person or entity as the first named insured.  Return premium checks should be made out to the first named insured as well. 

F. Transfer of Your Rights and Duties Under This Policy

Your rights and duties under this policy may not be transferred without our written consent except in the case of death of an individual named insured.
If you die, your rights and duties will be transferred to your legal representative but only while acting within the scope of duties as your legal representative. Until your legal representative is appointed, anyone having proper temporary custody of your property will have your rights and duties but only with respect to that property. 

F. Transfer of Your Rights and Duties Under This Policy

The policy cannot be transferred (also known as "assigned", or an "assignment of interest") to another insured, such as a purchaser of the business, without the consent of the insurance company. The only exception applies in the event of the death of an individual named insured on the policy. In that case, the deceased insured's legal representative has the same protection, and the same duties, afforded to the named insured.