Erie Insurance Dividend FAQ

Auto Insurance Dividend and Rate Reductions—Customer FAQs
April 20, 2020—Available on erieinsurance.com starting April 22
Auto Insurance Dividend

Is ERIE offering a Policyholder dividend and long-term rate reductions?
Yes. At ERIE, we’re focused on our Customers and on doing the right thing always. We are in
unprecedented, challenging times and we want to deliver relief to our Customers that is
impactful and meaningful.

Our pricing philosophy is steady and stable. A rate reduction has staying power and once
approved, is meant to impact Customers now and in the future. This also reflects our mission to
provide superior protection and service at the lowest possible cost.

In addition, auto premiums are based on driving exposure. In this time of social distancing,
exposures have dropped significantly, as reflected in fewer miles driven on average and a
reduction in auto insurance claims. The decision to issue Policyholder dividends for personal
and commercial auto builds on all of our efforts to respond to the coronavirus pandemic and
support our Customers during this time. By issuing dividends and reducing auto insurance rates,
we can provide our Customers both an immediate financial benefit and longer-term rate relief.

Will all personal auto and commercial auto customers receive a dividend payment?
Yes. Dividends will be mailed to all personal and commercial auto Customers after we receive
approval from your state’s Insurance Department. The dividend amount will vary based on your
annual premium. Commercial auto dividends will be limited to fleet and non-fleet policies.
Autos on garage policies will not receive a dividend. These policies will receive a rate decrease
later in the year, pending regulatory approval. Garage customers can talk to their ERIE Agent
about other ways to update coverages and premium.

How will the dividend amount be calculated? What’s my dividend amount?
The dividend payout will vary by Customer based on policy premium. The dividend payout
represents approximately 30 percent of two months’ auto insurance premium for an eligible
Customer. That translates to 5 percent of a Customer’s annual premium. Customers can expect
to receive one dividend check for the two months. To calculate the approximate dividend,

Customers can use the following equation: Annual premium as of April 1 multiplied by .30 /
divided by 6

For example, a policy with an annual premium of $1,400 as of April 1 would receive a dividend
check for $70 as calculated below:
$1,400 annual premium * .30 = $420
$420 / 6 = $70 dividend

*Please note, the annual premium should take into account any policy changes made that could
have resulted in a higher or lower premium as of April 1. For example, if the policy effective
date is 1/1/2020 and the annual premium at inception is $1,200 for the year but a change is
made effective March 30 that reduces annual premium to $1,000, then the formula for annual
premium will use the new premium of $1,000.

Additionally, here is a summary of sample Annual Premium and Check Amounts
1,000 = $50
1,200 = $60
1,400 = $70
1,600 = $80
1,800 = $90
2,000 = $100

I made changes to my policy prior to April 1 that resulted in a change to my annual premium.
What amount will be used to calculate my dividend?
ERIE will use the premium as of April 1 to determine the dividend payment.

Why is ERIE using April 1 as the dividend date?
We picked a date in the middle of the reduced exposure period to reflect average reduction in
driving.

When will I receive my dividend check?
Personal and commercial auto insurance Customers can expect to start receiving the dividend
payout in the form of a check mailed around mid-May, following approval from your state’s
Insurance Department.

I have a home policy with ERIE but not an auto policy. Will I receive a dividend?
No. Auto premiums are based on driving exposure. In this time of social distancing, exposures
have dropped significantly, as reflected in fewer miles driven on average and a reduction in
auto insurance claims. We are not seeing a reduction in exposure for homeowners nor a
reduction in claims, so we are not issuing dividends or making adjustments to our traditional
homeowners’ policies.

I am a commercial Customer with ERIE but I don’t have a commercial auto policy. Will I
receive a dividend?
No. Dividend payouts are limited to commercial auto Customers. If you have another
commercial account with ERIE, such as workers’ compensation policy, please contact your ERIE
Agent to discuss options to update coverages and lower your premium.
Auto Insurance Rate Reduction Questions

With ERIE’s announcement to issue auto dividends, is the company still filing to reducing auto
rates?
Yes. We understand Customers are experiencing hardships during this time. That’s why we are providing
immediate relief to Customers in the form of a one-time dividend and a longer-term approach by
proposing to take an overall 5 percent reduction in personal and commercial auto premium. The rate
reduction will vary by insured and individually purchased policies. We’re working to determine the
details by state and product.

When will the rate reductions take effect?
We anticipate that the lower rates will be approved this summer. Premium adjustments will
take effect at the time of new policy initiation or upon renewal after the effective date of
regulatory approval.

What if I’ve already paid for my policy in full? When will I see the benefit?
Since premium adjustments will take effect after rates are approved, you will see the benefit at
the time of your next renewal. And for more immediate relief, we announced a dividend payout
represents for personal and commercial auto Customers. This represents approximately 30
percent of two months’ auto insurance premium for an eligible Customer. That translates to 5
percent of a Customer’s annual premium. Customers can expect to receive one dividend check
for the two months.

I just renewed my policy. Do I have to wait a full year before seeing the benefit?
Since premium adjustments will take effect after rates are approved, you will see the benefits
at the time of your next renewal. You can also contact your agent about more immediate
changes to your coverage that may result in a lower premium.

What are the types of things I should discuss with my Agent about how my driving exposure has
changed?
If you drive to work on a daily basis, your personal auto premium is, in part, based on the miles
you drive. Consider calling your Agent to discuss how working from home full time may affect
your premiums in the short-term.

Does this apply to ERIE Rate Lock® Customers?
Yes, there will be rate reductions for ERIE Rate Lock; however, current ERIE Rate Lock
Customers’ rates won’t change until the Customer makes a change to driver, vehicle or address.

Will all Customers see a premium reduction?
Most Customers will see a premium reduction after rates are approved; however, each
Customer’s needs are different and therefore, their choices and coverages are different.
Because of this, in some cases, Customers might still see a future increase in their overall
premium. In those circumstances, the amount of that increase will be less than it may have
otherwise been.

Are these rate reductions only for existing Customers or do they extend to new Customers?
The intention is that everyone will be positively impacted by the rate reductions once
approved. For existing customers, the reductions will apply at renewal or if the Customer has
the ERIE Rate Lock® feature, at the time of a qualifying ERIE Rate Lock trigger. For new
Customers, the new rates will apply at the time of policy inception.

What else are you doing now to provide relief for Customers who are experiencing hardship?
We understand that each Customer’s situation is unique and we continue to offer flexibility to
Customers facing hardship.

ERIE Agents can help Customers with updating coverages. Agents and ERIE’s Customer Care
teams can also assist with delaying payment dates, adjusting installments, changing pay plans
and waiving penalties and fees. Customer Care can be reached at (800) 458-0811 to discuss
these options.

Customers can also access their personal lines and life policies, view current and previous
invoices, pay their bill and monitor a claim through Online Account.