chapter 5
Lightning Facts
1. All homeowners forms with the exception of the Contents Broad Form (HO-4) and Unit-owners Form (HO-6) require the named insured to be the owner-occupant of the insured dwelling. 5.1 2. The HO-4 Contents Broad Form is designed for tenants of a residential unit and provides no coverage for buildings and other structures. 5.1 3. The HO-6, Unit-owners Form is designed for the owners of condominium and cooperative units. Coverage is provided for the building and personal property; other structures coverage is included in Coverage A - Dwelling. 5.1 4. The HO-2, Broad Form insures the dwelling and other structures for the 16 named perils and losses. Valuation is on a replacement cost basis. 5.1 5. The HO-2, -3, -4, -6, and -8 forms insure personal property for the 16 named perils and losses are valued on an actual cash value basis. 5.1 6. The HO-3, Special Form insures the dwelling and other structures on an open perils basis and losses are valued on a replacement cost basis. 5.1 7. An open perils policy insures covered property for all perils that are not specifically excluded under the policy. 5.1 8. The HO-5, Comprehensive Form insures the dwelling, other structures, and personal property on an open perils basis. Loss valuation for the dwelling and other structures is on a replacement cost basis and loss valuation for personal property is on an actual cash value basis. 5.1 9. The HO-8, Modified Coverage Form is used when insuring older homes where replacement value and market value are disproportionate or when a moral hazard would be created if insurance were written in an amount equal to 100% of a dwelling's replacement value. 5.1 10. Full-time students living away at college are included in the definition of "insured" if they are under age 24 and were a resident of the household before they moved away to college. Full-time students under age 21 and in the care of the named insured or a resident relative are also defined as "insured." 5.2 11. A residence employee is an employee of an insured, or an employee leased under agreement to the insured, and whose duties are related to the maintenance or use of the residence premises. 5.2 12. The residence premises is a one family dwelling where the named insured resides; a 1-, 2-, 3-, or 4-family dwelling in which the named insured resides in at least one of the units; or the part of any other building where the insured resides. The residence premises includes any structures and the grounds at that location. 5.2 13. A deductible applies to all losses unless otherwise noted in the policy and the insurance company will only pay that part of the total of all loss payable under Section I that exceeds the deductible designated on the declarations page - up to the policy limits. 5.2 14. In most cases, the insurer requires the named insured to purchase insurance in an amount that is no less than 80% of the dwelling's replacement value. If, at the time of a loss, the amount of insurance on the dwelling is less than 80% of the dwelling's replacement value, a penalty will be applied to partial losses. 5.3 15. The automatic limit of insurance for Coverage B - Other Structures is 10% of the Coverage A limit of insurance. 5.3 16. Coverage B - Other Structures does not provide insurance for other structures that are rented or held for rental to anyone who isn't a tenant of the dwelling, from which business is conducted, or in which business personal property is stored. 5.3 17. The automatic limit of insurance for Coverage C - Personal Property is 50% of the limit for Coverage A. 5.3 18. Coverage C - Personal Property applies to personal property owned or used by an insured while it is anywhere in the world. If personal property is usually located at a residence other than the residence premises, coverage is limited to 10% of Coverage C or $1,000, whichever amount is greater. 5.3 19. Special limits of liability apply to certain categories of personal property under Coverage C. The categories of property to which special limits of liability apply are money, securities, watercraft, trailers, loss by theft of jewelry, loss by theft of firearms, loss by theft of silverware, business property, and electronic apparatus. 5.3 20. Certain types of property are not covered under Coverage C - Personal Property, such as property insured elsewhere, animals, birds, fish, motor vehicles, aircraft, hovercraft, property or roomers and boarders, property located in apartments rented to others, business data, credit cards and electronic fund transfer cards, and water or steam. 5.3 21. If a property loss covered by Section I of the policy makes the residence premises unfit to live in, Coverage D - Loss of Use pays for any necessary increase in living expenses required by the named insured to maintain the household's normal standard of living. Coverage is also provided for the fair rental value of the portion of the dwelling rented to others and in the event a civil authority prevents the use of the residence premises. 5.3 22. Section I - Additional coverages include debris removal; reasonable repairs; trees, shrubs, and plants; fire department service charge; property removed; credit card, electronic fund transfer card or access device, forgery, and counterfeit money; loss assessment; collapse, and glass or safety glazing material. 5.4 23. The limit of insurance for Credit Cards, Electronic Fund Transfer Card, Forgery, and Counterfeit Money is up to $500. 5.4 24. Loss Assessment coverage provides up to $1,000 for loss assessment charged against an insured as the owner or tenant of the residence premises by an association or corporation of property owners for direct damage to property collectively owned by all members. 5.4 25. If a covered building, storm door, or storm window contains glass or safety glazing material, the additional coverage Glass or Safety Glazing Material covers direct damage to property, as well as damage caused solely by broken pieces of such glass or glazing material. 5.4 26. Landlord's Furnishings provides up to $2,500 of coverage, on a named perils basis, for appliances, carpeting, and household furnishings owned by the insured and located in each apartment rented to others on the residence premises. Coverage for the peril of theft is NOT provided. 5.4 27. The insured may use up to 10% of the Coverage A limit of liability for the increased costs incurred by the insured due to the enforcement of any ordinance or law that requires or regulates construction, demolition, remodeling, renovation, or repair of that part of a covered building damaged by an insured peril. 5.4 28. Section I Exclusions include ordinance or law, earth movement, water damage, power failure, neglect, war, nuclear hazard, intentional loss, and governmental action. 5.5 29. Selected Section I Endorsements include Mobile Home Insurance, Increased Limit - Other Structures on the Residence Premises, Water Back Up and Sump Discharge or Overflow, Personal Property Replacement Cost Loss Settlement, and Scheduled Personal Property. 5.6 30. The language of Section II - Liability Coverages is the same in all the homeowners coverage forms and provides coverage for personal liability and medical payments to others. 5.7 31. Under Coverage E - Personal Liability, insurance is provided for claims made and suits brought against an insured because of bodily injury or property damage caused by an occurrence to which the insurance applies. The policy pays up to the limit of liability for the damages for which an insured is legally liable, including prejudgment interest awarded against an insured. 5.7 32. Coverage F - Medical Payments to Others pays for the necessary medical expenses incurred within 3 years from the date of an accident causing bodily injury without regard to fault. Coverage is provided for injury to a person on the insured location with permission, or off the insured location if the injury is caused by the insured or a residence employee in the course of employment, or by an animal owned by or in the care of an insured. 5.7 33. Section II - Additional Coverages include Claim Expenses, First Aid Expenses, Damage to Property of Others, and Loss Assessment. 5.8 34. Motor vehicle liability is excluded under Section II, including Coverages E and F and the Additional Coverages. 5.8 35. Coverage E exclusions include loss assessments, damage to property owned by an insured; damage to property in the insured's care, custody, or control; injury to anyone eligible to receive worker's compensation and similar benefits; injury and damage covered by a nuclear energy liability policy; and bodily injury to an insured. 5.9 36. Coverage F exclusions include bodily injury to a residence employee when not working and away from an insured location; anyone eligible to receive worker's compensation and similar benefits; covered by a nuclear energy liability policy; to a resident of the insured location. 5
Limit of Liability
A per occurrence limit applies to losses covered under Coverage E - Personal Liability and a per person limit applies to losses covered under Coverage F - Medical Payments to Others.
Coverage F - Medical Payments to Others examples
A person on the insured location with the permission of an insured. • A person off the insured location if the bodily injury: ◦ Arises out of a condition on the insured location or the immediate surroundings. ◦ Is caused by the activities of an insured. ◦ Is caused by a residence employee in the course of employment by the insured. ◦ Is caused by an animal owned by or in the care of an insured
Deductibles
Although the standard homeowners policy deductible is $250, an insured may choose a higher or lower deductible The deductible applies to all losses unless otherwise noted in the policy. With respect to any one loss, the policy will only pay that part of the total of all loss payable under Section I that exceeds the deductible amount shown in the declarations - subject to the policy limits.
Coverages E and F don't apply to bodily injury sustained while using a watercraft that is:
An inboard motorboat owned by an insured, except while in storage ◦ An inboard motorboat with more than 50 horsepower, rented by an insured ◦ An outboard motorboat with more than 25 horsepower, owned by an insured ◦ Sailing vessels 26 feet or more in length, owned or rented by an insured
Property Removed
Coverage is provided for loss to covered property by any cause while being removed from a premises endangered by a peril insured against. Coverage applies for no more than 30 days while removed. For example, if a wildfire threatens the insured's home and property is removed, loss to the removed property that is caused by flood or earthquake would be covered during the first 30 days the property is removed. However, if flood threatened the insured's home, coverage wouldn't apply because the endangering peril is not a peril insured against.
Collapse
Coverage is provided for the abrupt falling down or caving in of a building, or a portion of a building, if the building cannot be occupied for its intended purpose after the collapse. • Direct physical loss from collapse must be caused by a Coverage C named peril, hidden decay, hidden insect or vermin damage, weight of contents, equipment, animals, people, the weight of rain collecting on a roof, or the use of defective materials or construction methods. • The policy does not cover collapse of awnings, fences, patios, swimming pools, underground pipes, cesspools, etc., unless damage is the direct result of the collapse. • This coverage does not increase the limit of insurance that applies to the damaged property.
Coverage A - Dwelling
Dwelling on the residence premises shown in the declaration, including structures attached to the dwelling. • Materials and supplies located on or next to the residence premises used to construct, alter, or repair the dwelling or other structures on the residence premises. For example, the pile of lumber in the insured's back yard that will be used to construct a deck off the kitchen.
HO-2 (Broad Form
Fire or lightning • Windstorm or hail • Explosion • Riot or civil commotion • Aircraft • Vehicles • Smoke • Vandalism or malicious mischief • Theft • Falling objects • Weight of ice, snow, or sleet • Accidental discharge or overflow of water or steam • Sudden and accidental tearing apart, cracking, burning, or bulging • Freezing • Sudden and accidental damage from artificially generated electrical current • Volcanic eruption
Fair Rental Value
If a property loss covered by Section I of the policy makes that part of the residence premises rented to others unfit to live in, the policy pays for the fair rental value of such premises - less any continuing expenses - while it's unfit to live in. Payment is for the shortest time required to repair or replace the rented portion of the premises
Additional Living Expense
If a property loss covered by Section I of the policy makes the residence premises unfit to live in, the policy pays for any necessary increase in living expenses incurred by the named insured to maintain the household's normal standard of living. Payment is made for the shortest time necessary to repair or replace the damage. If the insured must relocate permanently, payment will be made for the shortest time it takes the insured to settle at the new location.
Power Failure -
If the failure of power or utility services takes place off the residence premises, this exclusion applies. However, if the failure of power or utility services takes place on the residence premises and is caused by a Peril Insured Against, it doesn't apply.
Claim Expenses (Supplementary Payments
Includes the insurer's expenses for defending a claim, along with reasonable expenses incurred by an insured at the insurer's request. Also covered as claim expenses are premiums on bonds required in a suit defended by the insurer, the insured's actual loss of earnings up to $250 a day for assistance in the investigation or defense of a claim or suit, and post-judgment interest.
Liability Coverage Coverage E - Personal Liability
Insurance is provided for claims made and suits brought against an insured because of bodily injury or property damage caused by an occurrence for which the insurance applies. • The policy pays up to the limit of liability for the damages for which an insured is legally liable, including prejudgment interest awarded against an insured. • The policy provides a defense, at the insurer's expense, even if the suit is groundless, false, or fraudulent. The insurer may investigate and settle any claim or suit it decides is appropriate. The duty to defend ends when the policy limits have been exhausted by payment of a judgment or settlement. Payments for defense costs are made in addition to the limit of liability appearing on the declarations.
Earth Movement
Losses resulting from: earthquake, including land shock waves or tremors before and after volcanic eruptions, landslides, mudslides, mudflow, subsidence, or sinkhole, and any earth sinking, rising, or shifting. Direct loss by fire or explosion that ensues is covered. This exclusion doesn't apply to loss by theft.
HO-5 (Comprehensive Form
Losses to the dwelling and other structures are valued on a replacement cost basis, losses to personal property are valued on an actual cash value basis
Scheduled Personal Property Endorsement
Newly acquired property of a class already insured on the endorsement is automatically covered. The insurer must be notified within 30 days (90 days for fine arts) if new property is acquired. Scheduled property is insured worldwide and the Section I deductible does not apply to this endorsement.
Damage to Property of Others
Pays up to $1,000, at replacement cost, for property damage to property of others caused by an insured. Payment is made regardless of negligence. For example, damage caused by an insured to a borrowed lawn mower. Coverage does not apply to property damage: • Covered under Section I of the policy. • Caused intentionally by an insured who is 13 years of age or older. • To any property owned by an insured. • To property owned by or rented to a tenant of an insured or a resident of the named insured's household. • Arising out of a business engaged in by an insured; acts or omissions in connection with premises owned, rented, or controlled by an insured that is not the insured location; the ownership, maintenance, occupancy, operation, use, loading or unloading of aircraft, hovercraft, watercraft, or motor vehicles.
Personal Property Replacement Cost Endorsement Not Covered
Property NOT eligible for coverage under this endorsement - and that is subject to actual cash value loss settlement includes antiques, fine arts, paintings and similar articles of rarity or antiquity that cannot be replaced, memorabilia, souvenirs, collectors' items, articles whose ages and histories contribute to their value, articles not maintained in good or workable condition, and articles that are outdated or obsolete and are stored or not being used. This endorsement only changes loss valuation - it doesn't change other policy provisions, including perils insured against or exclusions
Residence Premises
The 1-family dwelling where the named insured resides. • The 2-, 3-, or 4-family dwelling in which the named insured resides in at least one of the family units. • That part of any other building where the insured resides. • The residence premises also includes other structures and the grounds at that location, such as the 5 acres upon which the insured resides, including the barn, detached garage, and swimming pool
Governmental Action
The destruction, confiscation, or seizure of covered property by order of any governmental or public authority is excluded. The exclusion doesn't apply to such acts taken at the time of a fire to prevent its spread, if the fire loss would be covered under the policy.
Watercraft Liability Endorsement
The endorsement amends the liability exclusion pertaining to certain types of watercraft liability. The exclusion is deleted and replaced with a revised exclusion, which states that Coverage E and F don't apply to "watercraft liability" if the involved watercraft is being: • Operated in or practicing for any prearranged or organized race, speed contest, or competition. Sailing vessels and predicted log cruises are not excluded. • Rented to others. • Used to carry people or cargo for a charge. • Used for any "business" purpose
Limited Fungi, Wet or Dry Rot, or Bacteria Coverage Endorsement
The endorsement covers the insured's liability exposure in the event that a third party claims illness as a result of exposure to mold and the insured is deemed liable for the illness. The basic liability limit is currently $50,000 on an annual aggregate basis during the policy period for all fungi, wet or dry rot, or bacteria related damages. Insurers can also offer a higher optional liability coverage limit of $100,000
Duties After Occurrence
The named insured or another insured is responsible for performing the following duties. The insurance company has no duty to provide coverage if the named insured's failure to comply with the following duties is prejudicial to the insurance company. • Give the following information in written notice to the insurer or its agent as soon as is practical: ◦ The policy number. ◦ The identity of the named insured. ◦ Reasonably available information about the time, place, and circumstances of the occurrence. ◦ Names and addresses of any claimants and witnesses. • Cooperate with the insurer in the investigation, settlement, or defense of any claims. • Promptly forward any notice, demand, summons, or other process to the insurer. • At the insurer's request, aid the insurer in making a settlement, pursuing subrogation attempts, taking the case to court, and procuring evidence. • With respect to Damage to Property of Others, submit to the insurer, within 60 days after a loss, a sworn statement of loss and show the damaged property.
Coverage B - Other Structures
The policy covers other structures on the residence premises that are set apart from the dwelling by a clear space. Structures connected to the dwelling by only a fence or utility line are considered set apart, for example, sheds, detached garages, built-in pools.
Coverage F - Medical Payments to Others
The policy will pay necessary medical expenses that are incurred or medically ascertained within 3 years from the date of an accident causing bodily injury. Legal liability, negligence, and fault do not trigger this coverage. Medical payments to others is a goodwill coverage and designed to discourage the submission of liability claims. Medical expenses are the reasonable charges for medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, prosthetic devices, and funeral services. Coverage does not apply to the insured or regular residents of the insured's household (except residence employees
Insured Location
The residence premises. • The part of any other premises, structures, or grounds used by the insured as a residence if it is shown in the Declarations or acquired by the named insured during the policy period for use as a residence. • Any premises described above used by the named insured, such as a boat slip • Any premises not owned by an insured and where the insured is temporarily residing, such as hotel rooms and summer vacation rentals. • Vacant land, other than farm land, owned by or rented to an insured. • Land owned by or rented by an insured on which a 1, 2, 3, or 4-family dwelling is being built as a residence for an insured. Any part of a premises occasionally rented to an insured for other than business purposes, such as a banquet hall where a wedding reception is hosted.
Neglect
There is no coverage for losses if the insured fails to use all reasonable means to save and preserve covered property at and after the time of a loss
Water Back Up and Sump Discharge or Overflow
This endorsement allows the insured to buy back some coverage that is excluded under the Water Damage exclusion. It provides up to $5,000 of coverage for direct physical loss to property insured under Section I (Coverages A, B, and C) caused by water or waterborne material that: • Backs up through sewers or drains, or • Overflows from a sump, sump pump, or related equipment. Coverage is provided even if the sump overflow is caused by equipment breakdown. A special deductible of $250 applies and replaces any other deductible that may otherwise apply. Coverage doesn't apply if damage is caused by the negligence of an insured.
Personal Property Replacement Cost Endorsement
This endorsement changes the valuation method for most property insured under Coverage C from actual cash value (ACV) to replacement cost. It also applies to awnings, outdoor antennas and equipment, carpeting, and household appliances exendorsement also applies to jewelry, furs and fur garments, cameras and related equipment, musical instruments and related equipment, silverware, goldware, pewterware, and golfer's equipment
Limited Fungi, Wet or Dry Rot, or Bacteria Coverage Endorsement
This endorsement provides a basic property limit option of $10,000 on an annual aggregate basis during the policy period for: • Loss caused by fungi, wet or dry rot, or bacteria. • Cost of: ◦ Testing the air or property to confirm the existence of fungi, wet or dry rot, or bacteria. ◦ Removal of fungi, wet or dry rot, or bacteria. ◦ Tearing out and replacing any part of the building or other covered property to gain access to fungi, wet or dry rot, or bacteria. Insurers also can offer higher optional coverage limits of $25,000 and $50,000.
Coverage D - Loss of Use
Three types of coverage are provided under Coverage D and all are for indirect, or consequential, loss. The limit of insurance appearing on the declarations for Coverage D is the total limit payable for all three types of coverage provided. For example, a wildfire burns near the insured's home. If direct damage from the wildfire occurs to the residence premises, Additional Living Expense and Fair Rental Value coverages are triggered. If direct damage from wildfire occurs to the named insured's neighbors, and a civil authority evacuates the named insured, Civil Authority Prohibits Use coverage is triggered
Mobile Home Insurance
Under ISO (Insurance Services Office) rules, an owner occupied mobile home may be covered under an HO-2 or HO-3 by endorsement. The endorsement amends the definition of Coverage A (Dwelling) to include a mobile home. Tenants of a mobile home may insure their personal property under an HO-4 if the insurer's underwriting guidelines permit
Water Damage
Water damage means flood, surface water, tidal water, overflow of a body of water, water or water-borne material that backs up through sewers or drains or that overflows from a sump pump, and water that exerts pressure on or seeps or leaks through a building, foundation, swimming pool, or other structure. Direct loss by fire, explosion, or theft resulting from water damage is covered. Water damage is excluded whether caused by human, animal, or natural forces.
Reasonable Repairs
When the insured's property has been damaged by a covered peril, this coverage pays the reasonable costs incurred by the named insured to take necessary measures to protect covered property damaged by a covered peril against further damage. For example, a tree falls on the dwelling's roof. The insured's expenses to place a tarp over the hole in the roof would be covered. This coverage does not increase the limit of insurance that applies to the covered property.
Unit-Owners Form (HO-6)
aka Owners (6 letters) Coverage B does not appear in this form; however, if the owners of condominiums or cooperative units wish to insure other structures, the value of other structures may be included in the Coverage A limit of insurance. The form insures real property (building and building items) for which the insured is responsible under the bylaws of the condominium association or cooperative corporation. It also insures personal property of the insured while anywhere in the world.
HO-4 (Contents Broad Form)
aka rent: renter's or tenant homeowners policy. It doesn't provide any coverage for the dwelling or other structures because it's designed to insure those who are tenants. The HO-4 insures personal property under Coverage C against loss from the 16 named broad form perils found in the HO-2 and HO-3 forms Personal property losses are valued on an actual cash value basis
Exclusions Applying to Coverages E and F
• Expected or intended injury is excluded and applies even if the insured intended a different outcome. For example, the insured intended to hit Bob, but hit Joan instead. An exception exists for the use of reasonable force to protect persons or property. Previous editions of the homeowners policy only gave back coverage for the protection of persons. • Coverage is excluded for bodily injury or property damage arising out of, or in connection with, a business conducted from an insured location OR engaged in by any insured, regardless of where the occurrence takes place. The exclusion applies if the insured owns a business or is employed by a business; no distinction is made between the two. • Coverage is excluded for bodily injury or property damage arising out of the rendering of or failure to render, professional services. • No coverage is provided for bodily injury or property damage arising out of a premises owned, rented by, or rented to others by an insured if the premises isn't an "insured location." • No coverage is provided for bodily injury or property damage arising from any type of war, warlike act, or destruction, seizure, or use for a military purpose—including accidental discharge of a nuclear weapon. • Bodily injury or property damage arising out of the transmission of a communicable disease by an insured is excluded. • Bodily injury and property damage arising out of sexual molestation, corporal punishment, or physical or mental abuse is excluded. • Bodily injury or property damage arising out of the use, sale, manufacture, delivery, transfer, or possession of a controlled substance is excluded. An exception to the exclusion exists for the legitimate use of prescription drugs by a person following the orders of a licensed physician.
Coverage A - Dwelling (doesn't cover)
• Land on which the dwelling is located. • Theft in, to, or from a dwelling under construction, including materials used in the construction. • Vandalism and malicious mischief including ensuing loss, if the dwelling was vacant for more than 60 consecutive days immediately before the loss. When a limit of liability is chosen for Coverage A - Dwelling, the other three property coverages (B, C, and D) are automatically issued at limits equaling a specific percentage of the Coverage A limit of liability. If these limits are inadequate, the insured may purchase higher limits.
Coverage B - Other Structures ( not covered)
• Land, including land on which the other structures are located. • Other structures rented or held for rental to anyone who isn't a tenant of the dwelling, unless the other structure is used solely as a private garage. • Other structures from which any "business" is conducted. • Other structures used to store business property that is owned by someone other than an insured or a tenant of the dwelling. This insurance limit is 10% of the Coverage A limit of liability, does not reduce the Coverage A limit of liability, and may be increased by endorsements.
HO-3 (Special Form
Collapse, except as provided by Additional Coverages • Freezing of household appliances or a plumbing, heating, air conditioning, or automatic fire protective system unless the insured has taken reasonable care to maintain heat in the building or shut off the water supply and drained the appliances and systems of water. • Freezing, thawing, pressure or weight of water or ice on patios, fences, swimming pools, foundations, piers, docks, retaining walls. • Theft in or to a dwelling under construction, including construction-related materials and supplies. • Vandalism and malicious mischief, including ensuing loss, if the dwelling has been vacant for more than 60 consecutive days immediately before the loss. • Mold, fungus, or wet rot unless resulting from accidental discharge or overflow of water or steam that is hidden from view. • Wear and tear, marring, deterioration, mechanical breakdown, latent defect, inherent vice, smog, rust, corrosion, dry rot. • Smoke from agricultural smudging or industrial operations. • Pollution including discharge, dispersal, seepage, migration, or release of smoke, vapor, fumes, acids, or other chemicals unless such discharge is caused by a Coverage C Peril Insured Against. • Settling, cracking, bulging, or expansion of foundation, walls, floors, pavements, patios. • Birds, vermin, rodents or insects. • Animals owned or kept by an insured.
Trees, Shrubs, and Plants
Coverage is provided for trees, shrubs, plants, or lawns on the residence premises for the following perils: fire or lightning, explosion, riot or civil commotion, aircraft, vehicles not owned or operated by a resident of the residence premises, vandalism or malicious mischief, and theft. Coverage is NOT provided for any other peril, including windstorm or hail. • The limit of insurance is up to 5% of the Coverage A limit of liability and applies to all trees, shrubs, plants, or lawns. The most paid for loss to any one tree, shrub, or plant is $500. This limit is additional insurance. • No coverage is provided for property grown for "business" purposes.
Loss Assessment
Coverage up to $1,000 is provided for the named insured's share of loss assessment charged during the policy period by a corporation or association of property owners. The assessment must be made because of direct loss to property owned collectively by all members AND that was caused by a Peril Insured Against under this policy. This coverage is additional insurance.
Civil Authority Prohibits Use
If a civil authority prohibits the named insured from using the residence premises as a result of direct damage to neighboring premises by a peril insured against under the homeowners policy, the policy pays losses under Additional Living Expense and/or Fair Rental Value for no more than two weeks. • Loss and expenses due to the cancellation of a lease or agreement are NOT covered. • Limits of Coverage - The automatic limits of insurance for Coverage D vary by the homeowners form of coverage: ◦ 30% of Coverage A for forms HO-2, HO-3, and HO-5 ◦ 30% of Coverage C for form HO-4 ◦ 50% of Coverage C for form HO-6 ◦ 10% of Coverage A for form HO-8
Ordinance or Law
Ordinance or Law - The insured may use up to 10% of the Coverage A limit of insurance for increased costs the insured incurs due to the enforcement of any ordinance or law that requires or regulates: • Construction, demolition, remodeling, renovation, or repair of that part of a covered building damaged by an insured peril. • The demolition or reconstruction of the undamaged part of a covered building, when that building must be totally demolished because of damage by an insured peril to another part of that covered building. • The remodeling, removal, or replacement of the portion of the undamaged part of a covered building to complete the remodeling, repair, or replacement to that part of the covered building damaged by an insured peril. This coverage is additional insurance.
Property not covered under Coverage C includes
Property specifically described and insured elsewhere, such as on another policy or by endorsement to the homeowners policy. • Animals, birds, or fish. • Motor vehicles, including equipment, parts, and electronic equipment and accessories that can only be operated by the motor vehicle. An exception exists (meaning coverage is provided) for motor vehicles not required to be registered for use on public roads, used solely to service an insured's residence, or designed to assist the handicapped. • Aircraft, including its parts, except model or hobby aircraft is covered if it's not used or designed to carry people or cargo. • Hovercraft, including its parts. • Property of roomers, boarders, and other tenants—except those related to an insured. • Property in an apartment regularly rented, or held for rental, to others by an insured—except for property covered under the additional coverage, Landlord's Furnishings. • Property rented or held for rental to others off the residence premises. • Business data, credit cards, and electronic fund transfer cards—including data stored in books of account, on paper records, or on computers. • Water or steam. • This insurance limit is 50% of the Coverage A limit of liability, does not reduce the Coverage A limit of liability, and may be increased by endorsement.
Loss Assessment
Provides up to $1,000 of coverage for the insured's share of loss assessments charged by a corporation or association of property owners, during the policy period. The loss assessment must be the result of bodily injury or property damage not otherwise excluded by the policy or liability for an elected director, officer, or trustee who serves on the board of the association or corporation without being compensated
Coverage C - Personal Property
The policy covers personal property owned or used by an insured while it's anywhere in the world. After a loss, and at the named insured's request, it covers property owned by others while it's on the residence premises occupied by an insured or property owned by a guest or residence employee while located in any residence occupied by an insured. Coverage for property at another residence is limited coverage is limited to 10% of Coverage C or $1,000, whichever is greater
Coverage D - Loss of Use
Three types of coverage are provided under Coverage D and all are for indirect, or consequential, loss. The limit of insurance appearing on the declarations for Coverage D is the total limit payable for all three types of coverage provided If direct damage from the wildfire occurs to the residence premises, Additional Living Expense and Fair Rental Value coverages are triggered. If direct damage from wildfire occurs to the named insured's neighbors, and a civil authority evacuates the named insured, Civil Authority Prohibits Use coverage is triggered.
Exclusions Only Applying to Coverage F - Medical Payments to Others Coverage does not apply to bodily injury:
To a residence employee if the bodily injury occurs off an insured location AND NOT in the course of the residence employee's employment by the insured. • To any person who is eligible to receive benefits voluntarily provided or required by law under any workers' compensation, occupational disease law, or non-occupational disability law. • From any nuclear reaction, nuclear radiation, or radioactive contamination - regardless of how caused. • To any person other than a residence employee of an insured who regularly resides on any part of the insured location. This includes roommates and tenants as well as any insured.
Modified Form (HO-8)
aka modified (8 letters) The Modified Coverage Form is used to insure older homes when the replacement and market values of the dwelling are disproportionate or if a moral hazard would be created if insurance were written at 100% of replacement cost. The limit of insurance chosen should represent the functional replacement value of the dwelling, which is the cost to replace damaged property with property that will perform the same function and efficiency even if it isn't of like kind and quality.
