KEMPER(R)
CONTRACTUAL LIABILITY COVERAGE PART DECLARATIONS
GENERAL LIABILITY POLICY NUMBER: 3AB 046337
1. NAMED INSURED
MECHANICAL BREAKDOWN ADMINISTRATORS, INC., A DELAWARE CORPORATION
MECHANICAL BREAKDOWN ADMINISTRATORS, INC. OF ARIZONA
2. MAILING ADDRESS
9419 E. SAN SALVADOR, SUITE 105, SCOTTSDALE, AZ 85261
3. POLICY PERIOD
FROM: 07/ 01/ 00 TO: CONTINUOUS UNTIL CANCELLED
12: 01 A. M. Standard Time At The Address Of The Named Insured
4. COVERAGE
The Insurance afforded is only with respect to Designated Contracts issued
by the Name Insured during the Policy Period stated above.
5. THE PREMIUM IS AN ADVANCE DEPOSIT PREMIUM AND IS SUBJECT TO A QUARTERLY
ADJUSTMENT.
$100,000 Deposit Premium
6. POLICY COMPOSITION
The policy also includes the following endorsements:
SC 72 00 (ED 07 98) SERVICE CONTRACT AMENDATORY ENDORSEMENT
IL 70 21 (ED. 11 95) ARIZONA CHANGES--CANCELLATION AND NONRENEWAL
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SERVICE CONTRACT REIMBURSEMENT POLICY
In consideration of the payment of the premiums, the statements included in the
Declarations and the terms and conditions of this policy, "The Company" provides
the following coverage to the "Named Insured."
A. INSURING AGREEMENT
"The Company" agrees to pay to or on behalf of the "Named Insured" all sums
which the "Named Insured" shall become legally obligated to pay under
"Designated Contracts" in accordance with the terms of this policy. "The
Company" shall not have any duty to defend the "Named Insured" in any
lawsuit or other judicial or administrative proceeding involving the "Named
Insured."
B. DEFINITIONS
"NAMED INSURED" means the individual or firm named as the "Named Insured"
in the Declarations.
"DESIGNATED CONTRACT(S)" means a "Contractual Obligation" between the
"Named Insured" and a "Contract Holder" provided that 1) the form of the
"Designated Contract" is approved in writing by "The Company"; and 2) the
proper premium is timely paid.
"CONTRACTUAL OBLIGATION" means the "Named Insured's" obligation to properly
repair or replace covered components and their parts by a "Repair Facility"
in accordance with the terms of the "Designated Contracts." No other
obligations or liabilities, which may arise from "Designated Contracts,"
are insured by this policy. The amount of a "Contractual Obligation" shall
not exceed the liability provided under the "Designated Contracts."
"CONTRACT HOLDER" means any person or legal entity that legally acquires
the rights of ownership to a "Designated Contract" from the "Named Insured"
or as a qualified transferee.
"NONPAYMENT OF PREMIUM" means failure by the "Named Insured" to pay
premiums to "The Company" and includes failure by the "Named Insured" to
implement a rate change within one hundred and eighty (180) days of written
notification of such change by "The Company" to the "Named Insured."
"THE COMPANY" means American Motorists Insurance Company.
"CONTRACT HOLDER CLAIM" means a claim by a "Contract Holder" that
constitutes a "Contractual Obligation."
"LOSS" means expenses incurred by the "Named Insured" or expenses incurred
on behalf of the "Named Insured" in the performance of a "Contractual
Obligation."
"REPAIR FACILITY" means a person or organization authorized by the "Named
Insured" to perform services under "Designated Contracts."
C. PREMIUMS
The premium stated in the Declarations is the deposit premium for coverage
under this policy. The specific premium amounts for the "Designated
Contracts" covered hereunder is scheduled as an endorsement to the policy.
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D. SETTLEMENT OF COMPANY'S LIABILITY
"The Company" agrees to pay to or on behalf of the "Named Insured" the
reasonable and customary cost of repairing or replacing components and
their parts by a "Repair Facility" covered by valid "Designated Contracts,"
subject to the terms and conditions of such "Designated Contracts" and this
policy. If the "Named Insured" fails to pay any valid claim under a
"Designated Contract" within sixty (60) days after it is reported to the
"Named Insured," the "Contract Holder" may make a direct claim against "The
Company." Bankruptcy or insolvency of the "Named Insured" or "Named
Insured's" estate shall not relieve "The Company" of any of its obligations
hereunder. In no event shall "The Company's" duty continue unless an
acceptable substitute administrator or receiver is appointed by a competent
jurisdiction to undertake the "Named Insured's" duties.
E. EXCLUSIONS
This policy does not apply to any liability of the "Named Insured":
1. For any and all third party damages or claims other than those which
are covered by the terms of the "Designated Contracts." These damages
not covered include, but are not limited to, bodily injury, property
damages, or punitive or exemplary damages for bad faith arising out of
work performed by or on behalf of the "Named Insured" under such
"Designated Contracts."
2. For "Designated Contracts" that have not been previously approved by
"The Company" in writing or for "Designated Contracts" for which "The
Company" has not been fully paid the premium.
3. For breach of any and all expressed warranties or implied warranties
of fitness or merchantability.
4. For any and all liabilities for negligence.
5. For the fees, costs, and expenses of any product recall arising from a
deficiency in the performance or safety of the vehicle declared in the
"Designated Contracts," including the cost of parts and labor
associated with such recall.
6. For any costs which are recoverable by the "Contract Holder" from
other insurance or any other source.
7. For any and all liabilities or obligations extending to anyone other
than the "Contract Holder."
8. For any and all obligations, liabilities or claims of the "Named
Insured" arising from any fraudulent, dishonest or criminal act of the
"Named Insured" or for such acts arising from any of the "Named
Insured's" agents, directors, officers or employees or from any
"Repair Facility" whether the "Repair Facility" is authorized to
perform the repair or not.
9. For any duty to defend the "Named Insured" in any lawsuit or other
judicial or administrative proceeding involving the "Named Insured."
F. ASSIGNMENT
Assignment of interest under this policy by the "Named Insured" shall not
bind "The Company" until its consent is endorsed thereon.
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G. CONDITIONS
The "Named Insured" shall report to "The Company" within thirty (30) days
following the end of each month the number of "Designated Contracts" issued
during the previous month and remit the premium due as set forth in the
policy. In no case will a "Designated Contract" reported later than ninety
(90) days from its inception be covered by the policy. The report will be
in a form reasonably satisfactory to "The Company."
Premium - The premium for such "Designated Contracts" shall be determined
in accordance with the rates on file with "The Company." These rates shall
remain in effect until modified by "The Company" and provided that at least
one hundred and eighty (180) days prior written notice of the change shall
have been given to the "Named Insured."
In the event of cancellation of this policy by either the "Named Insured"
or "The Company," the premium paid by the "Named Insured" from the
inception through the cancellation of this policy shall be deemed to be
fully earned since "The Company's" liability shall continue beyond the
cancellation date until all "Designated Contracts" issued during the term
of this policy have expired.
Fraud and Misrepresentation - This policy shall be void if the "Named
Insured" has concealed or misrepresented any material fact or circumstance
concerning this insurance or the coverage provided under the "Designated
Contract."
Payment for Loss - Payment for "Loss" may not be required until thirty (30)
days after proof of "loss" is filed and the amount is determined as
provided in this policy.
Recoveries - After payment of "Loss" by "The Company," all amounts
recovered by "Named Insured" for which "Named Insured" has been indemnified
shall become the property of and be forwarded to "The Company" by the
"Named Insured," up to the total amount of "Loss" paid by "The Company."
Additionally, "The Company" shall have the right of subrogation for any
amount of "Loss" paid.
The "Named Insured" will be required to report claims from "Designated
Contracts" to "The Company" on a monthly basis. "The Company" and the
"Named Insured" shall agree upon the format of such a report.
This policy, including the terms, conditions, limitations, exceptions and
exclusions together with the endorsements and attached papers, if any,
constitutes the entire policy of insurance. No change in this policy shall
be valid unless in the form of an endorsement issued and forming part of
this policy and signed by an authorized representative of "The Company."
Bankruptcy or insolvency of "Named Insured," or "Named Insured's" estate,
shall not relieve "The Company" of any of its obligations hereunder,
provided that in no event shall "The Company's" duty continue unless an
acceptable substitute administrator or receiver shall be appointed by a
competent jurisdiction to undertake "Named Insured's" duties.
Territory - This policy covers the "Named Insured" for "Designated
Contracts" issued in the United States and Canada.
H. CANCELLATION OR CHANGE
"The Company" has the right to modify the rates attached to and made a part
of this policy. "The Company" must provide the "Named Insured" one hundred
and eighty (180) days written notice of a rate change. Such rate change
will apply only to "Designated Contracts" sold on or after the effective
date of the rate change.
"The Company" shall have the right to cancel this policy after fifteen (15)
days written notice for nonpayment of premium or for a false statement
knowingly made by the "Named Insured" on the application for insurance by
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mailing via certified mail, return receipt requested, to the "Named
Insured," at the address shown in the Declarations section of this policy,
written notice when such cancellation shall be effective.
"The Company" shall have the right to cancel this policy after one hundred
and eighty (180) days written notice. Written notice of such cancellation
shall be made via certified mail, return receipt requested. The "Named
Insured" has the right to cancel this policy by mailing to "The Company" or
its authorized agent immediate written notice of its intent to do so. The
"Named Insured's" cancellation shall be effective on the date stated in the
written notice but not less than one hundred and eighty (180) days
following receipt by "The Company" unless mutual agreement is reached by
the parties for an earlier date. Delivery of such written notice, either by
the "Named Insured" or "The Company," shall be equivalent to mailing.
All premiums shall be fully earned by "The Company," regardless of whether
termination is effected by the "Named Insured" or "The Company," subject to
the provisions of Section C.
I. EFFECT OF CANCELLATION
In the event of cancellation of this policy, "The Company" shall remain
liable for all of its duties and obligations pertaining to active
"Designated Contracts," including, without limitation, the payment of
claims to the "Named Insured," as previously described hereunder, with
respect to any "Designated Contracts" issued by the "Named Insured" prior
to the effective date of cancellation, as long as all policy requirements
are met by the "Named Insured."
Cancellation shall not relieve the "Named Insured" of any of its duties or
obligations under this policy, or its "Designated Contracts," with respect
to any "Designated Contracts" issued by the "Named Insured" prior to the
effective date of termination.
J. INSPECTION AND AUDIT RIGHTS
"The Company" and the "Named Insured" shall have the right to inspect and
examine the other's premises, books and other records (insofar as they
relate to the insurance provided by this policy), at any time during the
policy period or any extension thereof, and within five (5) years after the
final termination of this policy, and to verify any statements made or
submitted by or on behalf of the other.
K. ACTION AGAINST THE COMPANY
No action shall lie against "The Company" unless, as a condition precedent
thereto, there shall have been full compliance with all of the terms of
this policy, nor until the amount of the "Named Insured's" obligation to
pay shall have been finally determined either by judgment against the
"Named Insured" after actual trial or by arbitration or written agreement
of the "Named Insured," the claimant and "The Company."
Any person or organization or the legal representative thereof who has
secured such judgment or arbitration award or written agreement shall
thereafter be entitled to recover under this policy to the extent of the
insurance afforded by this policy. No person or organization shall have any
right under this policy to join "The Company" as a party to any action
against the "Named Insured" to determine the "Named Insured's" liability,
nor shall "The Company" be impleaded by the "Named Insured," or its legal
representative.
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L. AMENDMENTS
Notice to any agent or knowledge possessed by any agent or by any other
person shall not effect a waiver or amendment in any part of this policy or
stop "The Company" or the "Named Insured" from asserting any right under
the terms of this policy.
M. THE NAMED INSURED'S DUTIES IN THE EVENT OF CLAIM
In the event of an occurrence likely to give rise to a claim hereunder, the
"Named Insured" shall send to "The Company" written notice containing
particulars sufficient to identify the "Named Insured," the "Contract
Holder" and also reasonably obtainable information with respect to the
claim as soon as practicable, but in no event later than (30) days after
notification of claim or loss is received by the "Named Insured." The
"Named Insured" and "The Company" shall agree upon the format of reporting.
If any suit is brought against the "Named Insured" related to the terms of
the "Designated Contract," then "The Company" shall remain informed of
developments, and copies of every demand, notice, and summons received by
the "Named Insured" shall be forwarded to "The Company." This shall in no
way be construed as a commitment to bear those costs that are excluded by
Section E. EXCLUSIONS.
The "Named Insured" agrees to report to "The Company" all paid and reported
"Contract Holder Claims" on a monthly basis, pursuant to Section G of this
policy.
N. SUBROGATION
In the event of any payment by "The Company" under this policy, "The
Company" shall be subrogated to all the "Named Insured's" rights of
recovery therefor against any person or organization and the "Named
Insured" shall execute and deliver instruments and papers and do whatever
else is necessary to secure such rights. The "Named Insured" shall do
nothing after payment of a loss to prejudice such rights.
O. LIMITS OF INSURANCE
This policy will reimburse the "Named Insured" an amount not to exceed the
fair market value of the vehicle declared in the "Designated Contracts" for
any single claim.
In WITNESS WHEREOF, "The Company" has caused this policy to be executed and
attested, but this policy shall not be valid unless countersigned by a duly
authorized representative of "The Company."
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SERVICE CONTRACT AMENDATORY ENDORSEMENT
ATTACHED TO AND FORMING PART OF POLICY NUMBER: 3AB 046337
Named Insured:
MECHANICAL BREAKDOWN ADMINISTRATORS, INC., A DELAWARE CORPORATION
MECHANICAL BREAKDOWN ADMINISTRATORS, INC. OF ARIZONA
This endorsement is effective 07/ 01/ 00, and amends the terms and conditions of
Policy Number 3AB 046337
A. It is hereby understood and agreed that Section C. PREMIUMS contained in
the policy is deleted in its entirety and is amended to read as follows:
PREMIUMS
The premium stated in the Declarations is the deposit premium for coverage
under this policy. The specific premium amount for each "Designated
Contract" covered hereunder is as per endorsement per "Designated Contract"
sold during the term of this policy. The "Named Insured" shall make premium
payments on the first day of a calendar quarter reduced by the deposit
premium.
B. It is hereby understood and agreed that Section D. SETTLEMENT OF COMPANY'S
LIABILITY contained in the policy is deleted in its entirety and is amended
to read as follows:
SETTLEMENT OF COMPANY'S LIABILITY
"The Company" agrees to pay the "Named Insured" all sums, which the "Named
Insured" becomes legally obligated to pay as claims arising from the
reasonable and customary costs as covered by valid "Designated Contracts,"
subject to the terms and conditions of such "Designated Contracts" and the
terms and conditions of the Self Insured Retention Endorsement attached to
and forming part of this policy.
C. It is hereby understood and agreed that the Premium and Payment for "Loss"
subparagraphs of Section G. CONDITIONS contained in the policy are deleted
in their entirety and are amended as follows:
The premium for such "Designated Contract(s)" shall be as per endorsement,
per "Designated Contract(s)" sold. The as per endorsement, rate shall
remain in effect until modified by "The Company," and provided that at
least as per endorsement days prior written notice of the change shall have
been given to the "Named Insured."
Payment for Loss - Payment for "Loss" may not be required until the Self
Insured Retention described in the Self Insured Retention Endorsement has
been exhausted and then only after proof of "Loss" is filed and the amount
is determined as provided in this policy.
All other terms and conditions remain unchanged and are in full force and
effect.
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ARIZONA CHANGES -- CANCELLATION AND NONRENEWAL
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
This endorsement modifies insurance provided under the following:
BOILER AND MACHINERY COVERAGE PART
BUSINESSOWNERS POLICY
COMMERCIAL CRIME COVERAGE PART*
COMMERCIAL GENERAL LIABILITY COVERAGE PART
COMMERCIAL INLAND MARINE COVERAGE PART
COMMERCIAL PROPERTY COVERAGE PART
ELECTRONICS ERRORS AND OMISSIONS LIABILITY COVERAGE PART
FARM COVERAGE PART
LIQUOR LIABILITY COVERAGE PART
POLLUTION LIABILITY COVERAGE PART
PRODUCTS-COMPLETED OPERATIONS LIABILITY COVERAGE PART
* This endorsement does not apply to coverage provided for employee dishonesty
(Coverage Form A) or public employee dishonesty (Coverage Forms O and P).
A. The following is added to the CANCELLATION Common Policy Condition (and
applies except in situations where B., below, applies):
7. CANCELLATION OF POLICIES IN EFFECT FOR 60 DAYS OR MORE
If this policy has been in effect for 60 days or more, or if this
policy is a renewal of a policy or any coverage part we issued, we may
cancel this policy or any coverage part only for one or more of the
following reasons:
a. Nonpayment of premium;
b. Your conviction of a crime arising out of acts increasing the
hazard insured against;
c. Acts or omissions by you or your representative constituting
fraud or material misrepresentation in the procurement of this
policy, in continuing this policy or in presenting a claim under
this policy;
d. Substantial change in the risk assumed, except to the extent that
we should have reasonably foreseen the change or contemplated the
risk in writing the contract;
e. Substantial breach of contractual duties or conditions;
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f. Loss of reinsurance applicable to the risk insured against
resulting from termination of treaty or facultative reinsurance
initiated by our reinsurer or reinsurers;
g. Determination by the Director of Insurance that the continuation
of the policy would place us in violation of the insurance laws
of this state or would jeopardize our solvency; or
h. Acts or omissions by you or your representative which materially
increase the hazard insured against.
B. If the Commercial Property Coverage Part or the Farm Property Coverage Part
provides coverage for:
1. Real property which is used predominantly for residential purposes and
consist of one through four dwelling units; and/ or
2. Personal property (except business or farm personal property) of a
person residing in such real property
the following provisions apply (instead of those provided in item A. above)
with respect to cancellation of such coverage:
If this policy or coverage part has been in effect for 60 days or more, or
is a renewal of a policy we issued, we may cancel only for one or more of
the following reasons:
a. Nonpayment of premium;
b. Your conviction of a crime arising out of acts increasing the hazard
insured against;
c. Acts or omissions by you or your representative constituting fraud or
material misrepresentation in obtaining the policy or this coverage
part, continuing the policy
If we cancel this policy or any coverage part based on one or more of
the above reasons, we will mail by certified mail to the first Named
Insured, and mail to the agent, if any, written notice of cancellation
stating the reasons for cancellation. We will mail this notice to the
last mailing addresses known to us, at least:
a. 10 days before the effective date of cancellation if we cancel
for nonpayment of premium.
b. 60 days before the effective date of cancellation if we cancel
for any of the other reasons.
or this coverage part, or presenting a claim under the policy or this
coverage part;
d. Discovery of grossly negligent acts or omissions by you substantially
increasing any of the hazards insured against;
e. Substantial change in the risk assumed by us, since the policy or this
coverage part was issued, except to the extent that we should
reasonably have foreseen the change or contemplated the risk in
writing the contract;
f. A determination by the Director of Insurance that the continuation of
the policy or this coverage part would place us in violation of the
insurance laws of this state; or
g. Your failure to take reasonable steps to eliminate or reduce any
conditions in or on the insured premises which contributed to a loss
in the past or will increase the probability of future losses.
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If we cancel this policy or this coverage part based on one or more of
these reasons, we will mail written notice of cancellation, stating the
reason(s) for cancellation, to the first Named Insured. We will mail this
notice to the last mailing address known to us, at least:
1) 10 days before the effective date of cancellation if we cancel for
nonpayment of premium.
2) 30 days before the effective date of cancellation, if we cancel for
any of the other reasons.
C. The following is added and supersedes any provision to the contrary:
NONRENEWAL
1. If we elect not to renew this policy or any coverage part, we will
mail by certified mail to the first Named Insured, and mail to the
agent, if any, written notice of nonrenewal. We will mail this notice
to the last mailing addresses known to us at least 60 days prior to
the expiration of this policy or any coverage part.
2. If notice is mailed, proof of mailing will be sufficient proof of
notice.
3. If either one of the following occurs, we are not required to provide
written notice of nonrenewal:
a. We or a company within the same insurance group has offered to
issue a renewal policy; or
b. You have obtained replacement coverage or agreed in writing to do
so.
D. If the Commercial Property Coverage Part or the Farm Property Coverage Part
provides coverage for:
1. Real property which is used predominantly for residential purposes and
consists of one through four dwelling units; and/ or
2. Personal property (except business or farm personal property) of a
person residing in such real property
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the following provisions apply (instead of those provided in item C. above)
with respect to nonrenewal of such coverage:
1. If we elect not to renew, we will mail written notice of nonrenewal,
to the first Named Insured. We will mail this notice to the last
mailing address known to us, at least 30 days before the end of the
policy period. Proof of mailing will be sufficient proof of notice.
2. If either one of the following occurs, we are not required to provide
notice of nonrenewal:
a. You have agreed to nonrenewal; or
b. You have accepted replacement coverage.
3. If our nonrenewal is based on the condition of the premises, you will
be given 30 days' notice to remedy the identified conditions. If the
identified conditions are remedied, coverage will be renewed. If the
identified conditions are not remedied to our satisfaction, you will
be given an additional 30 days, upon payment of premium, to correct
the defective condition.
E. The following Condition is added:
RENEWAL
1. If we elect to renew this policy and the renewal is subject to any of
the following:
a. Increase in premium;
b. Change in deductible;
c. Reduction in limits of insurance; or
d. Substantial reduction in coverage;
we will mail or deliver written notice of the change(s) to the first
Named Insured, at the last mailing address known to us, at least 60
days before the anniversary or expiration date of the policy.
2. If renewal is subject to any condition described in 1. a. through 1.
d. above, and we fail to provide notice 60 days before the anniversary
or expiration date of this policy, the following procedures apply:
a. The present policy will remain in effect until the earlier of the
following:
1) 60 days after the date of mailing or delivery of the notice;
or
2) The effective date of replacement coverage obtained by the
first Named Insured.
b. If the first Named Insured elects not to renew any earned premium
for the period of extension of the terminated policy will be
calculated pro rata at the lower of the following rates:
1) The rates applicable to the terminated policy; or
2) The rates presently in effect.
c. If the first Named Insured accepts the renewal, the premium
increase, if any, and other changes are effective the day
following this policy's anniversary or expiration date.
THIS ENDORSEMENT MUST BE ATTACHED TO A CHANGE ENDORSEMENT WHEN ISSUED AFTER THE
POLICY IS WRITTEN.
Includes copyrighted material of the Insurance Services Office with its
permission.
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