What it does
IL 00 03 adds a short provision to the listed coverage parts. The premium in the Declarations was computed using rates in effect when the policy was issued. On each renewal, continuation, or anniversary of the effective date, the insurer will compute the premium using its rates and rules then in effect.
Where it applies
The 09 08 edition lists the Capital Assets Program, Commercial Automobile, Commercial General Liability, Commercial Inland Marine, Commercial Property, Crime and Fidelity, Employment-Related Practices Liability, Equipment Breakdown, Farm, Liquor Liability, Medical Professional Liability, Owners and Contractors Protective, Pollution Liability, Products/Completed Operations and Railroad Protective coverage parts.
Why it matters
- On policies written for more than one year, or continuous until cancelled, the endorsement lets the insurer apply new rates at each anniversary rather than locking in the original rates.
- It supports rate changes on renewal without a new policy being issued.
Quoting and selling notes
- Tell clients on three-year or continuous policies that the premium can change at each anniversary even though the policy term has not ended.
- For a guaranteed rate over a multi-year term, the carrier must agree to a rate guarantee in writing. This endorsement says the opposite.
