Current through August 26, 2024
(1) PURPOSE. In accordance with s.
625.34,
Stats., this rule is to accomplish the purpose and enforce the provisions of
ch. 625, Stats., in relation to automobile physical damage insurance for
substandard risks.
(2)SCOPE. This
rule applies to any automobile physical damage insurance policy procured or
delivered by a finance company.
(3)DEFINITIONS.
(a) "Substandard risk" means an applicant for
insurance who presents a greater exposure to loss than that contemplated by
commonly used rate classifications as evidenced by one or more of the following
conditions:
1. Record of traffic
accidents.
2. Record of traffic law
violations.
3. Undesirable
occupational circumstances.
4.
Undesirable moral characteristics.
(b) "Substandard risk rate" means a rate or
premium charge that reflects the greater than normal exposure to loss which is
assumed by an insurer writing insurance for a substandard risk.
(4)RATES FOR SUBSTANDARD RISKS.
(a) Any increased rate charged for
substandard risks shall not be excessive, inadequate, or unfairly
discriminatory.
(b) It shall be
unfairly discriminatory to charge a rate or premium that does not reasonably
measure the variation between risks and each risk's exposure to loss.
(c) Classification rates filed for
substandard risks may not exceed 150% of the rate level generally in use for
normal risks unless the filing also provides for the modification of
classification rates in accordance with a schedule which establishes standards
for measuring variation in hazards or expense provisions or both.
(5)INSURANCE COVERAGE.
(a) The automobile physical damage insurance
afforded shall be substantially that customarily in use for normal
business.
(b) The applicant shall
not be required to purchase more coverage than is customarily necessary to
protect the interests of the mortgagee. The issuance of a policy shall not be
made contingent on the acceptance by the applicant of unwanted or excessively
broad coverages.
(c) Single
interest coverage may be issued only when double interest coverage is not
obtainable. The applicant must be given the opportunity to procure insurance,
and if he or she can procure same within 25 days there shall be no charge for
the single interest coverage.
(6)POLICY FORMS. The purchaser must be
furnished with a complete policy form clearly setting forth the nature and
extent of all coverages and premiums charged therefor.
(7)RATING STATEMENT. No policy written on the
basis of a sub-standard risk rate schedule shall be issued unless it contains a
statement printed in bold-faced type, preferably in a contrasting color,
reading substantially as follows: This policy has been rated in accordance with
a special rating schedule filed with the commissioner of insurance providing
for higher premium charges than those generally applicable for average risks.
If the coverage or premium is not satisfactory, you may secure your own
insurance.
