Wheaton, Ill., June 11, 2008—Insurers writing homeowners coverage will soon have access to a standardized rating plan that provides premium credits and debits based on an insured's claims payment history and tenure with the insurer.

The new experience rating procedure will be filed countrywide later this month by the American Association of Insurance Services (AAIS), a national advisory organization that develops policy forms and rating information used by more than 600 property/casualty insurers throughout the U.S.

The procedure is included in a countrywide filing of revised state manual pages for the AAIS Homeowners Program. In addition to the experience rating, the revised manual includes expanded fire protection definitions, revised base loss costs (where indicated), and revised territorial definitions where warranted. Details on these revisions will be provided by bulletin to insurers affiliated with AAIS for use of its Homeowners Program.

The experience rating plan allows an insurer to apply two separate premium modifications:

• A premium credit or debit that reflects the policyholder's claims payment history and tenure with the company.
  
  For purposes of determining the number of claim payments, the plan considers payments totaling $500 or more over a three-year period for certain perils described in the plan. Tenure is the consecutive time that the policyholder has had homeowners or equivalent coverage with the company or group.
   

• A claim-free premium credit for qualifying policyholders.
  
  A policy is considered claim-free if all insured adults had homeowners or equivalent coverage in place over the previous three years and no claims of any kind were paid under it.

The manual specifies that the information required to determine an insured's claims payment history and tenure with the company can be obtained from a signed application, a loss or claims history database, and/or a company's internal records.