AN ENTRC’DUCT‘ZON "5‘0 ENSURANCE AND ‘E‘HEiR COSTS ZN CONTRACTINfi “E‘imii s for $325 5333‘?“ cf 31 3; ’xéiChiGAN LQTA‘E‘E COL L'GR ' UK ‘21“... :9 , 7h?“ AN INTRCDUCTICN TO INSURANCE AED THEIR COSTS 1K CONTRACTING A Thesis Submitted to The Faculty of MICHIGAN STATE COLLEGE of AGRICULTURE AND APPLIED SCIEHCE by J.W.KmMN Candidate for the Degree of Bachelor of Science June 1946 THESIS Introduction Workmen's Compensation Insurance Social Security Act Federal Old-Age and Survivors Insurance State-Federal Unemployment Insurance Public Liability Insurance Fire Insurance Contingent Insurance Product Insurance (Completed Operations) Automobile and Vehicle Insurance .rjnn Lk‘?‘ Xxx)?” (D N] U"! U1 MI‘F—‘QJ 14 17 20 21 (R It has been the tendency of more and more states in the past few years to reouire increased protection for the work- ‘men especially in regards to compensation and personal lia- bility. This along with the Social-Security and State Unemploy- ment taxes have been causing the overhead costs in contract- ing to increase every year. The modern contractor has had to depend a great deal on the protection which is available to him through the medium of the insurance companies to absorb his losses and liabilities. It is for that reason this paper has been written to give an approximate idea of the cost of carrying the different types of insurance most used by con- struction firms. It is impossible to aive the exact premiums of these pol- icies due to variations in the different Contractors ratings. The premiums that are paid vary with the risks, classes of work, and individual contractors ratings; therefore, contract- ors with poor safety and accident records will have premiums above the basic rates, while companies with good records will receive a lower than average rate. In a field with as keen competition as contracting it is of definite advantage to a company to be able to credit those lower premiums in their bids. It not only allows them to reduce their bid to a place where they have a better chanCe of being awarded the contract, but also enables them to increase the companies profits. An insurance policy regardless of how many interests may eventually be involved, is essentially a two party instru- ment-—-that is, an agreemeny on the part of the insurer to reinburse the insured in case of loss caused by a designated contingency. No matter how complicated, every insurance pol- icy can be reduced to fhis situation. Therefore, let us consider the two types of insurance needed by contractors; those required of him by Federal and State law, and those of his own cLoosing as are needed for 1,) loss and liability arising from the work en¢a3ed in. The re- quired insurances will first be considered. "WCRKEEE'S CLAPEFSATICN lRSURAR‘E" The Workmen's Compensation Law inforced in the State of Fichipan is known as "Act to. 10, Public Acts of 1912, First Extra Session". In general states:“An act to the welfare of the beetle of t"is state, relating to the liability of employ- ers for injuries or death sustained by their employee, provid- compensation for t‘e disability or death resulting from :ccup- aticnal injury to or death of employes and methods for pay- ment, and apportionment of same, establishing an industrial accident bfiard, defining its powers, providing for a reveiw of its awards, making an appropriation to carry out the pro- visions of this act, and restricting the right to compensation or damages in such cases to such as are provided by thee not". how the Contractor is Effected Cf the 47 states having workmen's compensation laws 3‘ of them impose upon the principal-or contractor liability for compensation to employee of contractors or sub-contractors. This is likewise true in the Pistrict of Columbia and the Territory of Pawaii. From this it can be seen that a contract- or who does not have the protection of insurance fir himself, and thus protect his client is gamblina - and perhaps for high stakes. Cost to the Contractor It is impossible to give the exact cost of this type of insurance; because the rate is based on the individual employ- ers experience retina as rated by the rating bureau for that State of hiohiaan. In general a rating is made up by consider- ing the complete data of the payroll by classification for a period of six years accompanied by a loss record for a simi- re separated from compensation Q) iar period. Kedical expenses payments, the number of claims for each year, and any large ones stated separated with proper explanation. With such in- formation at hand the matter of a special ra‘inq may be giv- en oonsi"eration. Premiums of the policy are determined from the following frctors. I. Amount of employers -ayroll. II. Class of work that is preformed. A. Each class has a classification code number. III. Rates for each coding are published f;r Michigan by the Fational Insurance Association. IV. Pasic rates are subject to an experience rating riv- en by the Kichiaan Fxperience Retina Bureau to the construction firm. V. Premiums of less than 2500.00 are not experience rat- ed. "Fichflgan Workmen's Coppe‘sation Insurance Rates” Classification of Work Rates / £100 of payroll Wrecking buildings or demolition €31.09 Fxcavating,earth or common 2.18 Excavation rock Concrete work, engineering structures Concrete work, bldgs. not over 2 stories “ " " over 2 stories reinfsrsod floors pavements Carpentry, Concrete form construction ” bldas. 2 stories and under " bldds. 3 stories and over , interior trim buildings Structural-iron and steel erection Lrnamental-iron erection Roofing Waterproofing by brushing " " Trowellins (masonary) Lathins Ericklayin; Sheet-metal work Plumbing, heating, gas fitting Glazing Electrical oouipment installino Electrical wiring installing Painting structural steel in field engr. structures Pain‘ing buildings Sewer construction Vatermain construction officers and supertendents supervising Cffice workers U1 "THE SCCIAL SECURITY ACT” The Social Security Act is a nationak law. Its purpose is to prevent and to relieve the misfortunes that come when earnings are out off by lack of work, old age, blindness, or death; when children are left with no one to support them or when they lack necessary care; and when the health of the community is not properly protected. This act was passed by Congress and approved by the President on August 14, 1935 and amended in August lFBQ. The Social Security Act is made up of nine distinct but related programs. These may be grouped under three main heads. I. Social Insurances: (a) Cid-age and Survivors Insurance (b) Unemployment Insurance II. Public Assistance: (a) Cid-age Assistance (b) Aid to the Needy Blind (c) Aid to Dependent Children III. Health and Welfare Services: (A) Child Welfare Services (b) Services for Crippled Children (0) Material and Child-health Services (d) Public Health Services The Social Security Act provides for two insurance sys- tems. I. Federal old-age and Survivors Insurance Program. The old-age and survivors insurance system is designed to provide a regular monthly income for the worker and his family when he is too old to work, and for his family when he dies. lhe cost of paying the insurance benefits is met by tax- es which are levied at eoual rates on both employers and em- ployees under the Federal Insurance Contribution Act. Because the benefits are based on wages the sucessful operation of the system depends very largely on the employers. It is the employers responsibility to deduct the employees' social security tax from their wages; and four times a year to send his own tax and the employees' tax to the collector of internal revenue for his district, together with a report of wages paid. The old—age and survivors insurance program applies to every employer who has one or more employees in covered em- ployment in the United States. Cost of Tax: This tax is divdded equally between the employees, and the employers. The tax applies to the total wages paid each em-loyee up to $3000 for services in each calender year, and is paid to the collector of internal revenue every three mon- ths. It imposes an employers' tax of 1% upon wages paid by employer and, in addition, an employees tax of 1% upon wages received by each employee.for the period from 1942 to l§45. The rate will increase in the period 1946 to l§48 to 1.25% for both employer and employee, and thereafter it will be 1.5% for each making it 3% of all wages. ”STATEfiFEDERAL UNEKPLCEMENT INSURANCE PRCGRAM" The unemployment insurance system is designed to provide a worker who is unemployed through no fault of his own with weekly payments to tide him over between jobs. The cost of paying unemployment benefits is mettby the State tax on em- ployers' payroll, and in some states by a tax on employees also. There is also a Federal Unemployment Tax Act, but in Kichigan an employer can credit his State tax up to 90% against his Federal tax. The federal unemployment tax applies only to those em- ployers who have eight or more employees in covered employ- ment in the United States on each of 20 or more days during the calendar year, each such day being in a different cal— endar week. While the State unemployment tax applies to every- one having workers in Michigan. The cost of both federal and state unemployment insur- ance is met only by the employer and is paid on the first $3,000 of taxable wages to each employee. The federal excise tax on employers of eight or more individuals under the fed- eral unemployment tax act is 3% of the total taxable wages under $3,000. less: Credit for contributions paid into state funds, plus any additional credit that might as a result of experience rating be added. Total credit limited to 90% of tax. In computing the state tax the basic rate is 3%, but this is subject to the employers record of stabilizing em— ployment during the previous three years. The rate may vary from 1% to 4% depending upon the experience rating of the employer. 8 "PUElIC lIAEIiITl IRSURAKCE” Public Liability insurance offers the only means of pro- tection for a contractor against claims for damages on account of personal injuries or death of others than his employes, and for property damage-of others. any contractor at any time may be confronted with such a claim. To show the importance of the contractors need for such insurance let us consider a case inwhich the contractor was held accountable for a circumstance over which he had no con- trol whatsoever. "In 1925, in the course of the erection of a building, an Chio contractor placed a box of lime on the pre— mises. One night after working hours some boys threw lime out of the box at a street car, Striking a passenger in the eye, destroying his sight. In 1933, eight years after the accident, the contractor was held liable, the amount of the judgment and interest being t34914.oo. The contractor carried Bublic Liability insurance with a limit of $10,ooo.co. The contrac- tor had to pay the additional 324914.00 all of it a complete loss to himself". Such an accident might easily happen in the course of the work of any contractor. Any contractor may well ask him- self whether he is prepared to pay such sums of money. Public Liabilty Insurance covers both bodily injuries, and property damage. The rates for these two differ on the same type of work depending on the insurance companies past experience. The rates are usually written to cover 5/10 thou- sand dollar policy, but the rate goes up on a percentage bas- es so that when coverage of 25/50 thousand is taken out the cost only goes up on bodily injuries 27 %. It can be seen ‘0 from this that it would be to the contractors safety to have the higher coverage for the small increase to take care of unusual claims that may arise. A 5/10 thousand dollar policy means that the company will not pay any more than five thousand dollars to any one person, and more than ten thousand to an number of people in- volved in the suit. The same is true of the 25/50 thousand dollar policy only higher values will be given. Under the or- dinary bodily infury policy there is no limit to the number of accidents that may ocurr in the course of the policy. On the other hand in the case of the property damage policy say 1/10 thousand dollar policy the most that will be paid for a any one accident is one thousand dollars. The total that will be paid in any one year is ten thousand; after that a new po- licy must be drawn up. This is called the aggregate limit that will be paid, but in the case of larger policies these sums will be correspondingly larcer. Public Liability Rates Based on szlo PolicygtBodily Injuries) Classification Rate/$100 payroll Wrecking, buildings or demolition 3 2.33 Excavation, earth or common 0.79 Excavation rock 0.79 Concrete work, engineering structures 0.29 Concrete work, bldgs. not over 2 stories 0.44 Concrete work, bldgs. over 2 stories ‘ 0.59 Concrete work, reinforsed floors 0.69 Concrete work, pavements 0.59 Carpentry, concrete form construction 0.69 Carpentry, bldss. 2 stories and under 0.20 .LU Cdrpentry, bldas. 2 stories and over Carpentry, interior trim bldgs. Structural-iron and steel erection Structural-iron dwellings not over 2 stories Ornamental-iron erection Roofing Waterproofing Lathing Bricklaying Sheet-metal work Plumbing, heating, gas fitting Glazing Electrical wiring, installing Electrical eouipment, installing Painting structural steel in field engr. struct. Painting bldes. Sewer construction Water main construction Officers and supertendants, supervising Office work 0.3 0i12 0.10 0.44 0.11 0.18 0.23 0.13 0.21 0.82 0.12 1.00 1.00 0.21 0.01 Public Liabilitypfiates Based on l/10 Policy (Frcpertngamage) Classification Rate/$100 nay roll Wrecking, bldgs. or demolitions Company rated Excavation, earth or common C 1.00 Excavation rock , 1.00 Concrete work, engine ring structures 1 0.25 Concrete work, bldgs. not over 3 stories 0.20 Concrete work, bldgs. over 7 stories 0.2J Concrete work, reinforced floors 0 Concrete work, pavements ' ' 0.20 Carpentry, concrete form canstruction qupentry, bldgs. 2 stories and under Carpentry, bldgs. 3 stories and over Carpentry, interior trit - bldgs. Structural-iron and steel erection Structural-iron, dwellings not over 2 stories Crnamental- iron erection Roofing Waterproofing Lathing Bricklaying Sheet-metal work Plumbing, heating, gas fitting Glazinr Electrical wiring, installing Electrical eouipment, installing Painting structural steel in field engr. structural Painting buildings Sewer construction Cfficers and superiendants, supervising Cffice work 12 Tables for computing the percentage of increase for pol— both bodily injuries, and property icies other than 5/10 for damage. Bodily Injuries Upper Limit 5 10 \J (3 Lower Limit f‘ ( c; 14. 2n' 1‘“ 40 ' §0|100|150'9QQL259. -3oq 10 100 110 15 104 113 106 115 120 107 116 1...: N) [—1 108 see 118 110 119 111 120 127 112 129 129 130 113 129 130 131 100 114 130 131 132 133 150 115 131 132 133 134 135 200 116 123 132 134 135 136 250 117 124 130 133 135 136 137 139 300 118 131 134 , 134 138 140 141 4-.) Property Damage Aggren Lower Limit gate limit 1 1.5 2 I 3 I 4 I 5 I7.5f 10! 15I 20I 25I 30 40! 50' 10 100 110 115 R) f‘ ) 15 101 111 116 1 20 102 112 117 123 128 25 103 113 118 124 129 133 140 145 149 153 157 30 104 114 115 125 130 134 141 146 150 154 158 160 35 105 115 120 126 131 135 142 147 151 155 159 161 (m [m 40 106 116 121 127 132 136 143 148 152 156 160 162 1 50 107 117 122 128 133 137 144 149 153 157 161 163 167 170 50 108 118 123 129 134 138 145 150 154 158 162 164 168 171 70 109 119 124 130 135 139 146 151 155 159 163 165 169 172 80 110 120 125 131 136 140 147 152 156 160 164 166 170 173 90 111 121 126 132 137 141 148 153 157 161 165 167 171 174 100 112 122 127 133 138 142 149 154 158 162 166 168 172 175 250 115 125 130 136 141 145 152 157 161 165 169 171 175 178 500 118 128 133 137 144 148 155 160 164 168 172 174 178 181 1000, 123 133 138 144 149 153 160 165 169 173 177 179 183 186 14 "FIRE lKSUHAhCE" Builders' or Carpenters' Risks Rates for fire insurance are determined from the type of construction, location with respect to surrounding buildings, and the municipal protection rating.' The National Board point system of grading towns' fire protection is being applied in the State of Michigan. This Grading Schedule is based upon the plan of assigning to the various features of fire defense, points of deficiency, depend— ing upon the extent of variance from the standard requirements; the natural and structural conditions which increase the gener- al hazard, and the lack of laws or their enforcement for con- trol of unsatisfactory conditions, are graded in the same man- ner. The Tater supply, Fire Department, Fire Alarm, Police, Duilding Laws, Hazards and the Structural Conditions are the items which enter into the grading. Questions with reference to town classification and also questions pertaining to con- templated improvements or changes in town Fire Protection sh- ould be referred.to the hichigan Inspectionlfiureau's Detroit office, where complete files on these topics are maintained for all protected towns in the State. The classification of Municipal Protection are rated from 1 to 10. I‘he lower the number the better the protection; most cities come under numbers from 1 to 6, town 7 to 8, and country 9 to 10. The contractor is only interested in Fire insurance dur- ing the period of erection and the period of time after com— pletion; before the owner has accepted the work. It is for that reson only the construction rates will be discussed. 4-) Classification Protection Classes Classes Classes 1-6 7-8 9-10 fer €100 valuati n l. in all frame, iron-sheathed frame, skeleton iron-clad and brick-veneered L’F P—l O 0\ U1 buildings, charve short rate of..... $1.50 2. En all buildings with exterior walls of masonry, concrete, metal, metal lath and plaster or similar in- combustible materials on incombustible supports and with combustible floors 1.00 1.15 and roof, charge short rate of ..... Note: This class includes one story buildings with combustible roof with or without basement. 3. on all buildings with exterior walls of metal, metal lath and plas- ter or other incombustible materials on combustible supports (except mas- onry or concrete) and with floors and roof constructed of incombustible supports. ........ . ..... ............. 0.65 0.75 4. Ln all buildings with exterior walls of masonry or concrete and with 'floors and roof construction of in- combustible materials on incombust- ible SL’pportSOOOOOOOOOOOOOOOOOOOOOO. 0.60 0.65 Note: When a building is of more than one of the types of con- 0.85 0075 struction described under Items 1,2,3 and 4, or when a build- ing is of a type of construction not embraced by any of the foregoing rules, or where buildings described under Items 3 16 or 4 have combustible roofs, refer to Michigan Inspectmon Bur- eau for specific rate. When the insurance on construction work is taken out it is computed on the full completed price of the work, and then half premiums are paid. The theory being that the average of the structure exposed from the start to finish is one half. Also the rates listed are per hundred dollars of valuation for one year, and are therefore subject to a pro—rating for that portion of a year it takes to complete the work. ”EXTENDED CCVERAGE ENDLRSEnEKT" The Extended Coverage Endorsement may be attached to the Fire Insurance Policy to cover perils of windstorm, haiL explosion,riot, riot attending a strike, civil commotion, aircraft, vehicle, and smoke. It must be for the same term as the Fire insurance to which it is attached. Also it is not permissible to cancel the Extended Coverage Endorsement un- less the entire Fire insurance Policy to which it is attach- ed be cancelled. When considering this type of endorsement the premiums are determined after the risks have been specially rated. "CCNTINGENT INSURARCE” Contingent insurance that applies to construction work are of two types - one for the protection of the owner during the process of construction, and the other protecting the con- tractor aaainst claims caused as a result of any act of his sub—contractors. First let us consider the owner's insurance, Owners Pro— tective or Contingent Public liability insurance is the pro- per coverage for an owner who employs an independent contrac- tor to erect a building on a fixed price basis. This protects the owner against liability which may be charged against him because of an act of an independant contractor and, against liability based upon omissions or supervisory acts of the in— sured in connection with the work of independant contractors. If the work is done on a cost plus or a percentage bas- is, an Owners Protective Liability nolicy does not apply. Undernthese conditions, the contractor becomes the agent of the owner and hence the owner can be protected only by being added as an additional insured under the Public Liability policy of the contractor. If the work is done by employee of the owner, then a Contractors Public Liability policy should be issued to the owner. Owners Protective Liability Bates. These rates are for 5/10 bodily injuries, and l/lO pro- perty damage. Wrecking: Is classified as an "A" rated policy, and the rates for this type of policy are established by the company after consideration of the conditions the work is to be per formed under. -LV Construction: These rates are listed on a flat rate de- pending on the total amount of the construction work invol- ved. - 3.1. . P.D. First $500,000.00 3 0.05 $ 0.02 Second $500,000.00 0.03 0.01 Above $1,000,000.00 0.01 0.01 The second type of contingent insurance is tlat taken out by the contractor, Contractors' Protective Liability in— surance is the proper coverage when an injured person make an effort to fasten the responsibility upon the general con— tractor; because of some negligent act of a sub-contractor. Every contractor who has ocassion to sub-let any of his work should carry this Contractors' Protective Liability insurance. Even one small sub-let job without such protection might re. sult in disastrous loss to the general contractor. For a per- son may become just as badly injured because of a very small job as on or about extensive construction work. The circumstances under which a general contractor may be held liable for acts of a sub-contractor are most import- ant. They are many times overlooked by contractors, and may be stated briefly as follows: 1. Where the work is unlawful in itself. 2. Where the injury is caused by violation of some ab— solute nondelegatable duty which the general contractor was bound at his peril to discharge. 3. Where the injury was a necessary consequence of ex- cuting the work in the manner provided for in the contract or subseouently subscribed by the general contractor. 4. Where the preformance of the work is inherently dan- gerous. 19 a specific example that gives the application of these principles where a general contractor has been held liable for an accident caused not by their own workmen nor by their own equipment but by the operations of a sub-contractor was handed down by Richigan courts, in the case of White v. H.G. Christman Company. Christman was the general contractor. The excavation was sub-let to a sub-contractor, who used a steam shovel sparks from which were blown by the wind and set the house of the plaintiff, White, on fire. In the suit by White against the general contractor, Christman, the court held Christman responsible. In doing so the court said that where one owes a duty to another he cannot aouit himself of liabil- ity by delenating performance of duty to an independent oon- tractor. In this case damage to property and not personal in- jury was involved, but the principal upon which the general contractor was held would apply with equal force to personal injury. Contractors' Protective Liability_Insurance Rates The premium for which this insurance is based is Upgn the cost of the work sublet. Building wrecking pr0miums are based on an "A" rating which the insurance company establishes from its past exper- ience. Construction operations - based on 5/10 policy for bod- ily injuries, and l/lO policy for property damages: Total construction cost Rates 5.1. P.D. First $500,000.0 3 0.06 3 0.05 Second ESO0,00.00 0.03 0.0? above $1,000,000.00 0.01 0.01 "PRCDUCT LIABILITY INSURARCE" (Completed Operations) Cn certain types of work it is advisable for contractors to insure their work after it has been completed. Contractors liability policies cover accidents occuring after completion or abandonment of operations, provided they are caused by pickup or delivery operations or existence of tools, uninsté alled equipment and abandoned or unused material. It does not however cover accidents caused by negligence in the work it- self, after operations have been completed. Many contractors feel that they are automatically re- lieved of liability once the owner of the premises accepts the work. This is not true as may be shown in the case of Murphy vs. Barlow Realty 00.. "Here a contractor repaired a brilding which had been damaged by fire. After the work was completed and accepted by the owner of the property, a por— tion of the floor collapased, injuring an employe of a ten- ant. the contractor was held liable on the grounds that the defect was caused by his negligence and could not readily be detected by a member of the public. Rates The premium for this Productive Liability policy may be obtained from the company after the risks have been submitted for special consideration and rating. The rates for this type of insurance are rather high. “ACTLECBZLE ARD VEHICLE thtmaLCT” Contractors should carry insurance on all the vehicles they operate of their own, and they also should cover the ones they use that are owned by others. In the use of hired trucks there a_re three types of coveraoes offered to the principle ction: CD contractor for his prot l. Non-ownership liability insurance, covering operation of passenger cars by anyone in the insured's business and the ocassional and infrequent use of commercial automobiles (tr- ucks) by the insured s empl eyes. 2. Hired Ca ar Coverage protecting the insured anainst liability from the use of hired automobiles operated by tr- ucking firms and other independent contractors. Ther is no standard form of policy in the last type of coverage and the risks must be referred to the company for premium. Most companies will write this type on reouest, how- ever if all three are taken out they should be with the same company. Contractors trucks would be listed under truckmen's rat- CD s fo rhaUlina materials or commodities for another. The fact t:.a t he adv rtises as a contractor, building material dealer, sand and gravel 1v"'-a.1.:ler, or some other name does not remove it from the truckmen's classification. Steps in Rating: 1. Class of work ing age ed in - Coistruction under (E) 2. Classified as to territory - Each has a different schedule rating. 3. Are of Va hicl - flew under 18 months after that class- ified as old. 4. As to weight; whether the weight is over or under 9500 pounds. 5. Distance of haul: local (50 miles or under), inter- mediate (50 to 150 miles), long (over 150 miles). Bates; Public liability; B.I. P.D. (CA) not over 9500 pounds $15.00 $18.00 (CB) over §500 pounds i31.00 443.00 Fire: Kew le local $0.6c/ioo 30.90/100 Intermediate $1.20/ " $1.80/ " long $1.80/ " $2.75/ " Tornado: Flat rate of 30.10 per hundred of valuation. Collision: local Entire State With Exception of Detroit Cris. cost Full cover- £50.00 8100.00 age Deductible Deductible 3 o- 600 fié5.oo $10.00 $8.00 601- 750 78.00 14.00 12.00 751- 900 90.00 21.00 17.00 901-1050 101.00 26.00 20.00 1051-1300 111.00 31.00 23.00 1301-1600 120.00 5.00 26.00 1601-1000 128.00 40.00 30.00 1901-2400 133.00 44.00 33.00 2401-3000 138.00 48.00 36.00 3001-3700 142.00 54.00 40.00 3701-4600 146.00 59.00 43.00 4600-6000 151.00 65.00 46.00 23 Intermediate: Cris. cost Full 350 8100 $250 coverage Deductible Deductible Deduct. 8 o- 600 134.00 21.00 12.00 3.00 601- 750 164.00 32 00 26.00 6.00 751- 900 191.00 51.00 29.00 7.00 901-1050 212.00 60.00 35.00 10.00 1050-1300 229.00 68.00 41.00 11.00 1301-1600 247.00 79.00 49.00 12.00 1601-1900 261.00 86.00 54.00 16.00 1901-2400 275.00 96.00 61.00 17.00 2401-3000 283.00 111.00 68.00 20.00 3001-3700 289.00 122.00 72.00 23.00 3701-4600 297.00 129.00 77.00 24.00 4601-6000 304.00 142.00 84.00 26.00 long Distant Crig. cost Full Deductible H 325 $50 8100 $250 4500 8 0- 600 198.00 113.00 70.00 51.00 33.00 23.00 601- 750 253.00 167.00 124.00 92.00 60.00 40.00 751- 900 298.00 214.00 171.00 127.00 83.00 55.00 901-1050 324.00 246.00 206.00 152.00 99.00 66.00 1051-1300 354.00 277.00 239.00 179.00 118.00 78.00 1301-1600 389.00 312.00 274.00 207.00 135.00 90.00 1601-1900 412.00 337.00 299.00 227.00 148.00 99.00 1901-2400 34.00 359.00 322.00 244.00 159.00 106.00 2401-3000 451.00 378.00 343.00 260.00 170.00 113.00 3001-3700 463.00 389.00 352.00 269.00 175.00 118.00 3701-4600 476.00 403.00 366.00 278.00 181.00 121.00 4601-6000 486.00 415.00 378.00 289.00 188.00 126.00 24 To determine the cost of policies of different limits multiply the cost of the 5/10 policy by the following per- centages to obtain bodily injury premiums. Upper Lower limits limit 5 7.5 10 15 20 25 30 4O ’50 100 150 200 10 100 107 110 15 104 111 113 116 20 106 113 115 118 120 23 107 114 116 120 121 122 30 108 115 117 121 122 123 124 35 109 116 118 122 123 124 125 40 110 117 119 123 124 125 126 127 45 111 118 120 124 125 126 127 128 50 112 119 121 125 126 127 128 129 130 70 113 120 122 126 127 128 129 130 131 1001114 121 123 127 128 129 130 131 132 133 1501115 122 124 128 129 130 131 132 133 134 135 200,116 123 125 129 130 131 132 133 134 135 136 137 2508117 124 126 130 131 132 133 134 135 136 137 138 139 300,118 125 127 131 132 133 134 135 136 137 138 139 140 25 To find increase in cost for higher property damage use these percentages. Coverage % increase 8 5000.00 -- 100% 10,000.00 - 110% 15,000.00 - 115% 20,000.00 - 1182 25,000.00 - 120% 30,000.00 - 1212 35,000.00 - 122% 40,000.00 - 1233 45,000.00 - 1242 50,000.00 - 125% 60,000.00 - 12 % 70,000.00 - 127% 80,000.00 - 128% 90,000.00 - 129% 100,000.00 - 130% 110,000.00 - 131% 120,000.00 - 132% 130,000,00 - 133% 140,000.00 - 134% 150,000.00 - 135% 175,000.00 - 136% 200,000.00 - 37% 225,000.00 -- 138% 250,000.00 - 139% 275,000.00 - 140% 300,000.00 - 1416 350,000.00 - 1422 400,000.00 - 143% 450,000.00 - 1446 500,000.00 - 1452 750,000.00 - 150% 1,000,000.00 - 155% 1,3- Aug— 5 9 I ,. .V-v 'J~.V 1 4A! MICHIGAN STATE UNIV RSITY l I I“ III mi mil 3 1293 O3 96 26 Will“ a _ 77