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ACCIDENT/VIOLATION DISCOUNTS฀AND฀SURCHARGES

State฀Farm฀Fire฀and฀Casualty฀Company

Applicable฀to฀Vehicles฀Rated฀ As฀Private฀Passenger฀Cars

Effective฀July฀15,฀2005฀New฀Business Effective฀August฀15,฀2005฀Renewals

(continued฀inside)

Like฀a฀good฀neighbor,฀State฀Farm฀is฀there.®

STATE฀FARM฀FIRE฀AND

CASUALTY฀COMPANY

Home฀Office:฀฀

Bloomington,฀IL฀฀61710-0001

The฀following฀discounts฀and฀surcharges฀apply฀ based฀upon฀the฀drivers’฀chargeable฀accidents฀and฀ violations.฀฀฀

3-STAR฀DISCOUNT฀–฀The฀3-Star฀Discount฀applies฀ if฀the฀assigned฀drivers฀have฀had฀no฀at-fault฀accidents฀ or฀minor฀violations฀during฀the฀past฀three฀years฀ and฀no฀major฀violations฀during฀the฀past฀five฀years.฀ There฀must฀also฀be฀at฀least฀one฀driver฀who฀has฀ been฀licensed฀for฀three฀years฀and฀the฀household฀ vehicles฀must฀not฀have฀been฀driven฀without฀liability฀ insurance฀in฀violation฀of฀any฀financial฀responsibility฀ or฀compulsory฀insurance฀requirement.฀฀

The฀3-Star฀Discount฀will฀continue฀to฀apply฀as฀ long฀as฀the฀drivers฀do฀not฀have฀any฀violations฀or฀ chargeable฀accidents.฀฀Otherwise,฀the฀smaller฀

2-Star฀Discount฀will฀apply,฀and฀a฀surcharge฀may฀ also฀apply.

2-STAR฀DISCOUNT฀–฀If฀the฀3-Star฀Discount฀ doesn’t฀apply,฀the฀2-Star฀Discount฀applies฀ if฀the฀insured฀vehicle฀has฀not฀been฀driven฀ without฀liability฀insurance฀in฀violation฀of฀any฀ financial฀responsibility฀or฀compulsory฀insurance฀ requirement฀during฀the฀past฀year.฀฀The฀premiums฀ for฀the฀2-Star฀Discount฀level฀are฀20%฀higher฀than฀ the฀premiums฀for฀the฀3-Star฀Discount฀level฀for฀ Liability,฀Personal฀Injury฀Protection,฀Compre– hensive,฀and฀Collision฀Coverages,฀36%฀higher฀ for฀Uninsured฀and฀Underinsured฀Motor฀Vehicle฀ Coverages,฀and฀59%฀higher฀for฀all฀other฀coverages.

DRIVER฀RECORD฀SURCHARGES฀–฀Major฀ violations,฀minor฀violations,฀and฀chargeable฀ accidents฀incurred฀by฀the฀drivers฀of฀the฀vehicle฀ may฀result฀in฀surcharges฀applied฀to฀Liability,฀ Personal฀Injury฀Protection,฀and฀Collision฀Coverage฀ premiums.฀฀The฀surcharge฀depends฀on฀the฀number฀ and฀timing฀of฀the฀accidents฀or฀violations,฀and฀will฀ remain฀in฀effect฀for฀up฀to฀three฀years.

At-fault฀accidents฀are฀those฀for฀which฀State฀Farm®฀ made฀payments฀under฀the฀Property฀Damage฀ Liability฀or฀Collision฀Coverage.฀฀In฀the฀event฀of฀ a฀multiple฀vehicle฀accident,฀a฀property฀damage฀ liability฀payment฀must฀have฀been฀made.฀฀An฀at- fault฀accident฀is฀considered฀chargeable฀when฀ the฀Company฀has฀paid฀$750฀or฀more฀under฀ the฀Property฀Damage฀Liability฀and฀Collision฀ Coverages฀combined.฀฀(For฀accidents฀occurring฀ prior฀to฀April฀1,฀1999,฀payments฀of฀$400฀or฀more฀ under฀Property฀Damage฀Liability฀or,฀in฀the฀event฀of฀ a฀single฀car฀collision,฀under฀Collision฀Coverage.)฀

An฀accident฀that฀occurred฀within฀the฀three฀years฀ prior฀to฀the฀date฀of฀application฀will฀be฀considered฀ at-fault฀if฀it฀resulted฀in฀death฀or฀bodily฀injury฀ or฀damage฀to฀any฀property.฀฀An฀at-fault฀accident฀ is฀considered฀chargeable฀if฀it฀resulted฀in฀death฀ or฀bodily฀injury฀or฀damage฀to฀any฀property฀in฀ the฀amount฀of฀$750฀or฀more฀($400฀or฀more฀for฀ accidents฀which฀occurred฀prior฀to฀April฀1,฀1999).฀

A฀multiple฀vehicle฀accident฀will฀not฀be฀considered฀ at-fault,฀nor฀chargeable,฀if฀the฀driver฀was฀less฀than฀ 50%฀liable.

For฀accidents฀that฀occurred฀prior฀to฀the฀date฀of฀ application,฀the฀accident฀will฀not฀be฀considered฀ at-fault,฀nor฀chargeable,฀if:฀(1)฀the฀accident฀was฀ caused฀by฀contact฀with฀birds,฀animals,฀missiles,฀or฀ falling฀objects,฀or฀(2)฀the฀car฀was฀lawfully฀parked,฀ or฀(3)฀the฀operator฀of฀the฀car฀has฀been฀reimbursed฀ by,฀or฀on฀behalf฀of,฀a฀person฀responsible฀for฀the฀ accident฀or฀has฀a฀judgment฀against฀such฀person,฀ or฀(4)฀the฀car฀was฀struck฀in฀the฀rear฀by฀another฀ vehicle฀and฀the฀operator฀of฀the฀struck฀vehicle฀has฀ not฀been฀convicted฀of฀a฀moving฀traffic฀violation฀ in฀connection฀with฀the฀accident,฀or฀(5)฀the฀car฀was฀ struck฀by฀a฀“hit-and-run”฀vehicle฀if฀the฀accident฀is฀ reported฀to฀the฀proper฀authorities฀within฀24฀hours,฀ or฀(6)฀the฀operator฀was฀not฀convicted฀of฀a฀moving฀ traffic฀violation฀in฀connection฀with฀the฀accident,฀ but฀the฀operator฀of฀the฀other฀vehicle฀involved฀in฀the฀

accident฀was฀convicted฀of฀a฀moving฀traffic฀violation,฀ or฀(7)฀the฀operator฀was฀operating฀a฀vehicle฀of฀a฀type฀ not฀eligible฀for฀rating฀under฀this฀Plan,฀or฀(8)฀the฀ insurer฀recovered฀80%฀or฀more฀of฀the฀insurer’s฀loss฀ through฀subrogation฀when฀it฀was฀a฀collision฀loss,฀ or฀(9)฀the฀accident฀resulted฀in฀a฀payment฀under฀ Personal฀Injury฀Protection฀or฀Additional฀Personal฀ Injury฀Protection฀Coverage฀and฀no฀payment฀is฀ made฀under฀the฀Liability฀or฀Collision฀Coverages,฀ unless฀the฀accident฀is฀a฀single฀vehicle฀accident฀in฀ which฀damage฀to฀property฀occurs.

Major฀violations฀include:฀(1)฀driving฀a฀motor฀ vehicle฀under฀the฀influence฀of฀intoxicants฀or฀drugs,฀

(2)฀manslaughter฀(whether฀or฀not฀“involuntary”),฀ reckless฀homicide฀or฀felonious฀assault฀arising฀out฀ of฀the฀use฀of฀a฀motor฀vehicle,฀(3)฀reckless฀driving฀ which฀results฀in฀an฀injury฀to฀a฀person,฀(4)฀failure฀to฀ stop฀and฀report฀or฀identify฀oneself฀when฀involved฀ in฀a฀motor฀vehicle฀accident,฀(5)฀operating฀a฀motor฀ vehicle฀without฀a฀valid฀operator’s฀license฀or฀during฀ a฀period฀of฀revocation฀or฀suspension฀of฀motor฀ vehicle฀registration฀or฀operator’s฀license,฀and฀(6)฀ operating฀a฀motor฀vehicle฀without฀the฀owner’s฀ authority฀if฀such฀operation฀results฀in฀a฀felony.

Minor฀violations฀include฀traffic฀law฀offenses฀ for฀speeding,฀stop฀sign฀and฀signal฀infractions,฀ improper฀turns,฀failure฀to฀yield฀right฀of฀way,฀and฀ similar฀offenses.฀฀A฀minor฀violation฀shall฀not฀be฀ counted฀as฀a฀separate฀incident฀if฀it฀occurred฀in฀ connection฀with฀a฀chargeable฀accident.฀฀If฀any฀ violation฀is฀subsequently฀dismissed,฀it฀will฀no฀ longer฀be฀considered฀a฀chargeable฀violation.