Product changes: Removing the payment plan $12 fee, various other housekeeping changes

To our Valued Broker Partners:

From today, the $12 payment plan fee will no longer be charged on all new business contracts. Accordingly, the interest rate is now 5.90% and the APR is 12.70%. This re-juggle of fee vs. interest rate is an enhancement; it simplifies the product and the sales conversation and better aligns with the market where an upfront fee for BC auto is not the norm.

Current term business is unaffected by this change, where the $12 fee was charged upfront with an interest rate of 4.5% and an APR of 9.71%.

Alongside this change we have made a few housekeeping changes as follows.

We have made the following UW Guideline changes:

• $12 Fee: reflected the $12 fee removal and interest rate changes in the Payment Plan Options subsection.
• $35 Date Change Fee: corrected an error where Guideline shows FIFC fee of $35 applying when the mid-term modification was a withdrawal date change outside of 60 days after policy inception. This fee stopped applying in the summer of 2021.
• Lift Kits and Levelling Kits: Clarified our lift/levelling kit rules as follows:
  • Limit Lift Height to 10 cm (3.9”) or for higher lifts, submit Vehicle Inspection Report(s) to Stratford’s satisfaction, that applicant will have had completed in accordance with the Motor Vehicle Act Regulations Part 3 section 25.20;
  • Limit Tire Size to 33” x 10.5”, or for >3500 series trucks, to 35” x 11.5”;
  • Spring Over Axle (SOA) lifts prohibited; and
  • Wheel Spacer lifts prohibited

This is a welcome broadening of Stratford’s appetite where up to now Stratford has allowed levelling kits but prohibited ALL lift kits. The intent with this change is to welcome responsible, legal lifts while continuing to prohibit dangerous vehicle mods.

• Marketing Benefits: added an “Everything you expect from a full-service MGA” subsection to the Marketing benefits Section.
• Accident Forgiveness: Aligned Accident Forgiveness Protection language with how the system operates in applying and removing accident forgiveness; “Occasional operators with a minimum of 5 years accident free (at-fault)” is an eligibility criterion.
• Total Losses: added a total losses section to the Claims Overview section to clarify that Stratford does not automatically cancel a policy when a total loss occurs given that the customer may still have open exposures on the policy.

We have made the following Policy Wording changes:

• Commission Disclosure: About Your Policy (page 2) – Addition of a Stratford/Everest commission disclosure.
• Minimum Premium Refund: Changing Your Policy (page 3) – Clarification of the minimum retained premium language; minimum refund for a cancel or change is $5 for cheque/credit card and $10 for payment plan.
• Table Error: Section 2.2 – Addition of missing table headings.
• Liability Clarification: Stratford’s intent is that excess liability is excess of the ICBC Basic $200k. However, Section 3 has the impression that Stratford Excess Liability is excess of both ICBC Basic liability AND excess of ICBC Optional liability (should ICBC Optional liability exist). The wording correction is to insert the word ‘Basic’ in Sections 3.1 and 3.3 as appropriate. This wording change is effectively a reduction in coverage whereby the possibility, while unlikely, exists where a policyholder has deliberately purchased Stratford liability as an excess layer over and above a purchased ICBC Optional liability limit. Stratford will temporarily honour such activity and read in the current wording for the remainder of all policyholders’ CURRENT insurance terms.
• Hit & Run: Section 4 – Hit & Run. With the introduction of Enhanced Care, Hit & Run is now included as part of Collision. ICBC had a transition feature for this coverage whereby they covered the first instance between May 1, 2021 and October 31, 2021. This transitionary time range has now passed, and this wording change removes that transitionary language.
• Accident Forgiveness: Section 6 – Accident Forgiveness Protection – clarified the occasional operator limitation. This item was clarified procedurally in the UW Guidelines on March 23, 2021 which aligned Accident Forgiveness Protection language with how the system operates in applying and removing accident forgiveness. This change aligns the policy wording language.
• UBI:  Section 6 – Removed Usage based Insurance endorsement, not currently offered.

You can find the latest generic Wording and UW Guidelines in the documents section of the Portal. If applicable, you can find your own broker specific versions on your Intranet or according to your own procedures.

Should you have any questions, please feel free to give myself or the Broker Support Team a call.

Rhonda Zimmermann
Business Development Manager