State Rating Bureau Issues
Clarifications
(March 2006)
In response to questions posed by MAIA, the State
Rating Bureau has issued a clarification of the assignment of
drivers to vehicles when there is only one vehicle on the policy
and more than one driver of the vehicle as well as a clarification
regarding the application of SDIP discounts and surcharges as
they apply to private passenger vehicles and motorcycles.
Single Vehicle Policy Assignments
The 2006 AIB manual rule 28 governs the assignment
of drivers to rating classifications and vehicles for private
passenger autos. This rule provides that when there is more than
one operator listed on the policy, drivers with the highest combined
operator classification and SDIP points will be assigned to the
auto with the highest base premium. Each remaining operator listed
on the policy will be assigned in the order of the highest combined
operator classification and SDIP point to the remaining autos
with the highest base premium until all operators are assigned
to an auto.
The two exceptions to this rule are inexperienced
principal operators and principal operators over the age of 65.
These operators, based on rule 28, will be assigned to the vehicle
they principally operate. The Division believes this assignment
rule is appropriate whenever there is more than one vehicle on
the policy. However, the current rule does not properly capture
risk on single vehicle policies when the principal operator is
over the age of 65 and there are other listed operators on the
vehicle who have not attained the age of 65, or have less than
6 years of driving experience. In the case of a single vehicle
policy with more than one insured operator, an operator over
the age of 65 will be the driver rated on the vehicle (driver
class 15) only when both of the following conditions are met:
- The vehicle is owned or jointly owned by an
operator over the age of 65, and
- All operators of the vehicle have at least six
years of driving experience.
-OR-
- An operator over the age of 65 is the listed
operator with the highest combined operator classification
and SDIP points.
Example: You have a class 15, code 99 who is principal
operator of a 2006 Saab and a class 26 with 2 points listed as
an occasional operator. The policy would be rated as class 26
with 2 points because there is only one vehicle in the household,
and all listed operators have not been licensed six years.
Application of SDIP Discounts and Surcharges
to Private Passenger Vehicles and Motorcycles
The following language in Rule 44 was originally
interpreted to mean that surcharges on motorcycle policies would
be charged at the same surcharge percentage as on auto policies
(15% for experienced auto operators even though they were rated
as inexperienced motorcycle operators): “The Safe Driver
Insurance Plan points or discounts assigned to an operator on
a private passenger automobile insurance policy, if available,
shall also be applied to the motorcycle policy.”
In response to a request from MAIA, on March 21,
2006, the State Rating Bureau issued a letter to the Automobile
Insurers Bureau clarifying Rules 28 and 44 in the following manner:
“The 2006 AIB manual rules 28 and 44 govern
the assignment of drivers to rating classifications and vehicles
for private passenger autos and motorcycles. Driver rating
classification assignments for each vehicle type are based
on the number of years an operator has been licensed to operate
a vehicle of that type. Operators are assigned to an experienced
driver rate classification if they have been licensed for more
than six years for a given vehicle type; otherwise, they are
assigned to an inexperienced driver rate classification. As
a result, it is possible for a single operator to qualify for
an experienced rate for one vehicle type, and an inexperienced
rate for the other vehicle type.
“2006 AIB manual rule 56 specifies the
discounts and surcharges that apply to operators based on their
driver classification assignment. The SDIP discount or surcharge
that applies to any vehicle type corresponds to the operator’s
driver rate classification for that vehicle type. For example,
suppose an operator has been licensed 10 years to drive an
automobile and 2 years to drive a motorcycle. This driver has
had one minor accident (3 points) in the past 6 years. In this
instance, the operator would be rated as an experienced driver
on the automobile with a surcharge adjustment of 45% (3 x 15%).
For the motorcycle, the operator would be rated as an inexperienced
operator with a surcharge adjustment of 22.5% (3 x 7.5%).
“The Merit Rating Board provides either
the number of surchargeable points a driver has accumulated
over the past five years or a discount code. When the driving
record is comprised of a point value, the number of points
applied to rating the motorcycle and the auto will be the same.
The rate value of those points will be based on the driver
classification for each vehicle type as determined by the company
(i.e. 7.5% or 15%). When the driving record indicates that
the driver is eligible for the excellent driver or excellent
driver plus discount, and the years licensed on one of the
vehicle types is less than 5 years, the SDIP rating for the
vehicle for which the operator has been licensed less than
5 years will be 0 points. When the driving record indicates
that the driver is eligible for the excellent driver plus discount,
and the years licensed on one of the vehicle types is less
than 6 years (but at least 5), the SDIP rating for the vehicle
for which the operator has been licensed less than 6 years
will be the excellent driver discount.
“In any instance where an operator is rated
as an inexperienced operator, the excellent driver plus discount
will not apply to that rating. This doesn’t preclude
the operator from receiving these discounts when the operator’s
driving experience and accident and violation history satisfy
the requirements on another vehicle type.”
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