Homeowners Policy

Under HO-6 Coverage D (Loss of Use) is the total of liability for the coverage's in:

-Additional living expenses -Fair rental value -Civil authority prohibits use. The HO-6 coverage form does not cover loss or expense due to cancellation of a lease or agreement.

Under Coverage A (Dwelling), the HO-6 policy insures the following

-Alternations, appliances, fixtures and improvements that are part of the building contained within the residence premises -Items of real property that pertain exclusively to the residence premises -Property that is the insured's insurance responsibility under corporation or association of property owners agreement -Structures owned solely by the insured, other than the residence premises, at the location of the residences premises

Form Name and Number, Peril Type, Residnetial Dwelling Use

Broad Form (HO 00 02 or HO-2) Named Peril 1-4 Unit Owner Occupied Special Form (HO 00 03 or HO-3) Open Peril and Named Peril 1-4 Unit Owner Occupied Renters or Tenants Form (HO 00 04 or HO-4) Named Peril Occupied by Tenant Comprehensive Form (HO 00 05 or HO-5) Open Peril 1-4 Unit Owner Occupied Condominium Form (HO 00 06 or HO-6) Named Peril Condominium Unit Owner Occupied Modified Form (HO 00 08 or HO-8) Named Peril 1-4 Unit Owner Occupied, Historic or Older Home

Coverage F

Medical payments to others- Will pay for necessary medical expenses incurred within 3 years (36 months) of an accident causing bodily injury. Necessary medical expenses include medical, surgical, x-ray, dental, ambulance, and funeral services. Coverage applies if a person is injured on the residence premise or ways adjoining the premise; Is caused by the activities of an insured; Is caused by a residence employee of an insured during the course of their employment; or Is caused by an animal owned by or in the care of the insured. This coverage does NOT apply to the insured or to regular residents of the insured's house hold, except residence employees

Coverage C: Personal Property

Most notable coverage change from the dwelling property policy. Coverage C was optional in the dwelling policy, but is now a mandatory coverage in all homeowners forms. The HO-2, HO-3, HO-5 and HO-8 will automatically of the Coverage A limit. This limit may be increased or decreased, but not below 40% for 1- and 2- family residence. In HO-4 and HO-6 policy forms, the amount of insurance is selected by the insured, with coverage minimums varying by state. The personal property coverage in the homeowners policy is broader than that included in the dwelling coverage forms. The HO-8 form will be treated separately as it retains elements of the dwelling form when covering personal property. Special limits of liability in HO policies are as follows: $200 for money, bank notes, bullion, gold, silver (excluding gold ware and silverware), platinum coins, and other metals; $1,500 for securities, accounts, deeds, evidences of debt, letters of credit, notes other than bank notes, manuscripts, passports, tickets, and stamps; $1,500 for watercraft and their trailers, furnishings, equipment, and outboard motors; $1,500 for other trailers; $1,500 for theft of jewelry, watches, furs, precious, and semiprecious stones; $2,500 for theft of firearms $2,500 for theft of silverware and silver-plated ware, gold ware, and pewter ware, including flatware, hollowware, tea sets, trays, and trophies; $2,500 for property on the premises used for business purposes; $1,500 for property away from the premises used for business purposes; $1,500 for loss of portable electronic equipment that produces, receives, or transmits audio, visual, or data signals, while in a motor vehicle; and $250 for loss of antennas, wires, or any media used with the electronic equipment in a motor vehicle. Personal property usually located at another residence of the insured is covered for the larger of $1,000 or 10% of the Coverage C limit. This limitation does not apply if property is moved because the residence premise is being repair renovated or rebuilt. When property is moved to a newly acquired residence for 30 days, the limit shown on the declarations will apply on a proportional basis to each residence. Coverage will not extend beyond the expiration date of the policy. PROPERTY COVERED: Personal property owned or used by the insured while it is anywhere in the world. At the discretion of the named insured, property of others, property of guests or residence employees may also be covered while on the residence premise. Residence employees may also have their belongings covered while in any residence an insured occupying. Property of roomers and boarders related to an insured; Hobby aircraft and parts not used or designed to carry people. Motor vehicles and other conveyances but only while used to service the premise or designed to assist the handicapped. Blank storage media and preplaced computer software PROPERTY NOT COVERED: Any items that are separately described and insured regardless of the limit of insurance; Animals, Birds, and Fish Aircrafts and parts whether attached or not, other than hobby aircraft noted above; Hovercraft or Parts; Motor vehicles and other motorized land conveyances, other than noted above. This includes electronic apparatus powered solely by the vehicle. Also included are parts and accessories to the vehicle and electronic equipment but only while in or upon the vehicle; Business data contained in books of accounts, paper records or in computer equipment. Property of roomers, boarders and tenants (when not a relative of the insured) Property in an apartment regularly rented or held for rental by the insured to others while off the residence premise; Credit cards, debit cards or any device used to deposit, withdraw or transfer funds; Water or steam (for example, a broken water pipe significantly increases an insured's water bill). Coverage C in HO forms is broken into 4 categories. Important differences between HO and DP property policy forms are noted below: Covered Property- Coverage in the HO policies is expanded to anywhere in the world. The DP policy is primarily used for personal property on the described location. Limit for property at other residences - similar to the worldwide property coverage offered in the DP forms, but the sublimit only applies to other owned residences. Special limits of liability - types of property and sublimit amounts are similar to the Broad Theft Endorsement for DP forms; however, in HO forms, it is important to pay particular attention to the categories that are only limited by the peril of theft. Property not covered - Limitations are added to the HO policy for property of roomers, boarders and tenants.

Property damage

Property damage means physical inury, destruction or loss of use of tangible property.

Conditions

The conditions found in the homeowner policy forms divided into 3 section: Property conditions Liability conditions and Conditions that apply to both property and liability The homeowners policy separates the conditions of the insured and insurer by section. The conditions that apply to Section I - Property are listed below. Because many of these conditions were present in the dwelling property policy and property/casualty basics chapters, only differences or additions will be described here. Insured duties after a loss - if a loss occurs, the insured is required to do the following: Provide the insurer or an agent with prompt notice of the loss Notify the police if a loss is caused by theft Notify the credit card or fund transfer card company if the loss is covered under the credit card and fund transfer card coverage Protect the property from further damage, make reasonable and necessary repairs, and keep records of any repair expenses Cooperate with the insurer in the investigation of a claim Allow the insurer to inspect the property as often as reasonably necessary If requested, submit to an examination under oath and Within 60 days of the insurer's request, send a signed, sworn proof of loss, which must include the time and events leading to the loss, and inventory, any changes in title or occupancy, receipts, bills, other insurance on the property, interests of all insureds, and estimate for repair Loss settlement- Covered property losses will be settles as follows for the HO-2, HO-3, HO-4, and HO-5 policy forms Actual cash value (ACV): Personal property Awnings, carpeting, household appliances, outdoor antennas and equipment Structures that are not buildings Gravemarkers and mausoleums or Buildings or other structures (if applicable) that are at the time of loss are not insured to 80% of replacement value. The insurer will have the option of paying the greater of ACV or application of the coinsurance formula. If the insured decides to not make a claim on a replacement cost basis (for example, the insured decides not to rebuild), the insured may notify the insurer within 180 days after the date of loss. Replacement cost: Buildings amd other structures if covered for at least 80% of their replacement cost. The insurer has the option of paying the least of the limit of liability, replacement with like kind and quality, or the amount necessary to repair or replace the damage building If the building is rebuilt at another premise, the insurer is obligated to pay no more than the cost associated with building at the original premise; or The insurer will pay no more than ACV until actual repairs or replacement is complete. If the cost to repair or replace damaged property is less than 5% of the total amount of insurance, or less than $2,500, the insurer will settle the loss without the requirement that the property actually be repaired or replaced. Appraisal- In claims handling, if the insurer and the insured are unable to reach an agreement as to the value of damaged property, either party may make a written request for appraisal. Other insurance and service agreement- If other insurances applies to the same loss, the insurer is liable only for the portion of the loss that the limit of insurance bears to the total amount of all insurance on the propery (pro rata or proportionate share). If a service agreement is in place for covered property (for example, a home warranty), the policy will pay on an excess basis. Loss payment- All the losses will be paid in 60 days of receiving the proof of loss or after one of the following: An agreement has been reached as to the amount of loss There is a final judgement; or There is a filing of an appraisal award with the insurer. Mortgage holders clause- If the insurer denies a claim, the denail will not apply to the mortgagee if the mortgagee has notified the insurer of any changes in ownership or occupancy, pays any premiums due, and submits a signed proof of loss within 60 days. In addition, if the insurer decides to cancel or nonrenew coverage, it will provide the mortgage holder with 10 days advance written notice. Volcanic eruption period- All volcanic eruptions that occur within a 72- hour period will be considered one event. Loss payable clause- If the Declarations shows a loss payee for certain listed insured personal property, the loss payee will be considered an insured under the policy in regards to the applicable covered property. If the policy is cancelled or not renewed, the loss payee must be notified in writing. Other conditions that have already been explained are the following: Insurable interest and limit of liability Pair or set clause Suit against the insurer Insurer option to repair or replace Nuclear hazzard clause Recovered property Policy period; and Concealment or fraud The following conditions apply to both property and liability coverages: Liberalization clause- If the insurer adopts any changes that broaden coverage in the policy, those changes will automatically apply to the policy at no additional premiums as of date the insurer implements the change in the insured's state, provided that this implementation date falls within 60 day's prior to or during the policy period stated in declarations. Waiver or Change of policy provisions- Any waiver or change of policy provisions must be in writing by the insurer. Cancellation and Nonrenewal- The insured may cancel the policy at any time by returning the policy to the insurer or by providing the insurer with written notice. If the insurer cancels coverage, it must provide the insured with a 10-day advanced written notice for cancellation due to nonpayment of premium or if the policy has been in force for no more than 60 days. For all other cancellations or for nonrenewals, the insurer must provide the insured with at least a 30-day advanced written notice. The insurer can only cancel a policy after it has been in force for 60 days for 2 reasons: 1. Material misrepresentation, which would have prevented the insurer from issuing the policy; or 2. Substantial change in the risk since the policy was issued. Assignment- The insured may not assign the policy to any other person without the written consent of the insurer. Subrogation- The insured may waive all rights of recovery against any other peron; however, that must be done in writing and prior to a loss. If the rights are not waived, the insurer may require an assigment of rights of recovery for a loss to the extent that payment is made by the insurer. If an assignment is sought, an insured must sign and deliver all related papers and cooperate with the insurer. This condition does not apply to additional coverage damage to property of others, and Coverage F - Medical Payments Death- If a named insured or spouse dies, the deceased's legal representative will be considered an insured under the policy, but only in regards to the property of the deceased covered at the time of death. The definition of an insured is broadened to include an insured who is a member of the deceased's household but only whole residing at the residence premise, and to a person in the car of the insured's property but only until appointment of a legal representative.

First aid to others

The policy will pay for expenses the insured incurs to render first aid for bodily injury to third parties (note, however, that the insurer will not pay for first aid to an insured).

Selected Endorsements

There are numerous endorsements available under the homeowners policy program that the broaden the coverage provided under the basic policy forms. The following are optional endorsements available on the homeowners policy. (Some also are available for the dwelling program.) Special Provisions- Utah All Homeowners policies issued for delivery in Utah must attach endorsement HO 01 43 to modify the policy conform with Utah requirements. The modifications that are requred are the same as the change previously stated for the dwelling Policy Limited Fungi, Wet or Dry Rot, or Bacteria Coverage Limited fungi, wet or dry rot, or bacteria coverage is an edorsement that may be used to add special limits for losses caused by fungi, dry and wet rot, and bacteria. This endorsement applies to both property and liability losses. Permitted Incidental Occupancies Although, certain types of incidental businesses, such as an office and studio, are permitted for eligibility, a seperate permitted incidental occupancies endorsement must be attached to cover other structures used for business activity, remove the special limit of liability for business property and the personal liability and medical payments coverage. The limitations are eliminated only for the business described in the endorsement. Earthquake Earth Movement (earthquake) is excluded in all property policies, but usually can be purchased separately for an additional premium. the coverage can be purchased to cover the dwelling, other structures, and/or personal property. Rates generally are determined by the type of construction that determines the dwelling's vulnerability to earthquake losses. Frame buildings are less susceptible to severe damage than masonry veneer buildings. Therefore, they have lower rates for this coverage. Earthquake coverage provided by endorsement in a homeowners form considers one or more earthquake shocks occurring within a 72-hour period as a single earthquake. The Deductible under earthquake coverage is stated as a percentage of loss; however, it cannot be less than a specified minimum dollar amount (for example, $500 in HO '11 ISO form). The deductible applies separately to buildings, other structures, personal property, and loss of use. Masonry veneer structures are not covered by an endorsement issued for a frame dwelling. A seperate endorsement is available for this type on construction. Business Pursuits Business Pursuits is an edorsement that allows an insured to extend the Section II liability coverage to certain business pursuits that occur away from the premises. It covers the activities of the insured, But will not cover the liability of a business owned by an insured. Home Day Care Coverage If the insured operates a home day care business out of the insured residence, the home day care coverage endorsement may be attached to the policy to cover the liability exposure associated with the business. Coverage excldes loss or damage that results from secual molestation, corporal punishment, physical or mental abuse, or draft and saddle animals - including vehicles used with such animals, motor vehicles, aircraft, or watercraft. The premium is based on the number of children kept in the home. Personal Injury Personal inujury coverage, including injuries that result from false arrest, libel, slander, defamation of character, and invasion of privacy, may be added by endorsement. Identity Fraud Expense The identy theft/fraud expense coverage endorsement provides up to $15,000 in coverage for expenses incurred by an insured as a direct result of identity fraud, if first discovered during the policy period. Any series of acts committed by one or more persons against an insured is considered one identity fraud occurrence. This coverage excludes loss arising out of or in connection with a business, expense due to a fraudulent, dishonest, or criminal act by an insured, or loss that does not meet the endorsement's definition of expenses. The insured will be responsible for a $500 deductible. Watercraft Watercraft endorsement provides liability protection for bodily injury or property damage caused by the ownership or use of watercraft (excluding when used to carry persons for a fee or when rented to others). Scheduled Personal Property If the insured requires higher limits for certain types of property, the scheduled personal property endorsement may be used to schedule individually described items or classes of items on a blanket basis. This endorsement typically provides open peril or special form coverage on listes items. The endorsement provides for the scheduling of 9 different classes of property: Jewelry Furs Cameras Musical Instruments Silverware Golfer's equipment Fine arts (including porcelains and glassware); Postage stamps; and Rare and current coins. Newly acquired jewelery furs, cameras, and musical instruments are covered up to the lesser of the following limits: 25% of the amount of insurance for that class of property; or $10,000 The new property must be reported within 30 days of acquisition, and the insured may be required to pay the additional premium from that date. For coverage to apply to fine arts, the report of acquisition must be provided within 90 days Insured perils: this endorsement insures against direct physical loss to property cause by any of the following perils: Wear and tear Insects or vermin War Nuclear and Hazard If fine arts are covered- breakage caused by fire or lightning, windstorm, earthquake or flood, explosions, and malicious damage or theft; or If postage stamps are covered- Fading, creasing, denting or scratching, transfer of colors, and dissappearance. The following are additional benefits and features of the scheduled personal property endosement: The coverage C limits no longer apply for the property scheduled on this endorsement Insured location: scheduled personal property endorsement covers eligible property worldwide Fine arts and antiques can be covered on an other than ACV basis, The special limits of liability no longer apply to items or classes or property scheduled; and no deductible will apply to a covered property loss. Personal Property Replacement Cost Personal property replacement cost endorsement changes the actual cash value settlement on personal property, household appliances, carpeting, awnings and outdoor equipment to a replacement cost basis. Certain types of property will not benefit from this coverage, such as fine arts, antiques, memorabilia, articles that are not in good working order, and item that are stored and have become or obsolete. There is no requirement that the personal property be insured to 80% of replacement cost at the time of loss. However, some insurers require that the amount of coverage C be increased to 70% of Coverage A amount when this endorsement is purchased.

Insured Location

defined as any of the following: The residences premises Part of other premises used by the named insured as a residence, and described in the Declarations, or newly acquired during the policy period; A premises not owned by the insured, but where the insured is living temporarily (a motel room); Vacant land owned or rented by the insured, excluding farmland; Land owned or rented by the insured where a residental dwelling (1 - to 4-family) is being constructed; Individual or family cemetery plots or burial vaults of the insured; and Any part of premises occasionally rented to an insured, except for business purposes (e.g. an insured rents a hall for a daughter's wedding reception). Residence premises means: The one family dwelling where the insured reside; The 2-, 3- or 4-family swelling where the insured resides in at least one of the family units; or That part of any other building where the insured resides, and which is shown as the residence premises in the Declarations. A residence premises also includes other structures and grounds at that location. Property damage means physical inury, destruction or loss of use of tangible property. Residence employee includes employees of the insured whose duties are related to the maintenance or use of the home, including doing similar duties elsewhere.

HO-6 under Coverage A does not cover any of the following

-Land, including land on which the residence premises, real property, or structures are located -Structures rented or held for rental to any person that is not a tenant of the dwelling, unless used solely as a private garage. -Structures from which any business is conducted -Structures used to store business property. However, it does cover a structure that contains business property solely owned by an insured or a tenant of the dwelling, provided that the business property does not include gaseous or liquid fuel, other than fuel in a permanently installed fuel tank of a vehicle or craft parked or stored in the structure.

General Form Structure

Agreement Definitions Section I - Property Coverage Section I - Perils Insurance Against Section I - Exclusions Section I - Conditions Section II - Liability Coverage's Section II - Exclusions Section II - Additonal Coverages Section II - Conditions Section I and II - Conditions

Coverage D: Loss of Use

All homeowners policies contain the loss of use coverage, Which is also a combination of Coverage D (Fair Rental Value) and Coverage E (Additional living expenses) in the dwelling property policy. If a loss covered under the policy makes part of the residence premises not fit to live in, the insurer will cover loss of rent and additional living expenses for the shortest time required to repair or replace the damage. If the insured permanently relocates, additional living expenses and fair rental value payments are limited to a maximum period of 2 weeks. As in the dwelling policy, additional living expenses include any necessary increase in living expenses incurred by the insured so that the insured's household can maintain its normal standard of living. If loss of use results from the order of a civil authority, the additional living expenses and fair rental value payments are limited to a maximum period of 2 weeks The expiration of the policy will not impact the payment of this indirect coverage.

Ordiance or Law

Allows insured to use up to 10% of the limit of liabilty that applies to Coverage A (or limit for buildings, additions and alterations in the HO-4) for the increased cost incurred because of enforcement of any ordiance or law that requires one of the following: The construction, demolition, or renovation of part of a covered building damaged by a peril insured against or The demolition and reconstruction of the undamaged part of a covered building if it must be demolished because of damage to another part of the covered building by a peril insured against. DOES NOT COVER: The loss in value to any covered building or other structure because of requirements of any ordiance or law (for example, although the Americans with Disabilities Act (ADA) sets specific requirements for minimum clear floor space dimensions in restrooms, ordiance or law coverage will exclude necessary for making the restroom compliant with ADA); or The costs to comply with any ordinance or law that required any insured to test for, clean up, or otherwise respond to pollutants on any covered building.

HO-6 ( Condominium Unit Owners)

Also expands coverage to include parts of the building, such as alterations and appliances that the insured is required to insure because of the condominium association agreement. This form is designed for the owner-occupant of a condominium.

HO-4 (Contents Broad Form - Renter's or Tenant's Form)

Also referred to as tenant broad form, insurers personal property for broad perils. Coverage may not be issued to an owner-occupant. The HO-4 form may be written for a tenant who resides in a rented dwelling, apartment, or mobile home, but doe not provide coverage on the dwelling itself.

Collaspe

Applies to property covered under Coverages A and B with respect to this additional coverage. This additional coverage does not increase the limit of liability. Means the abrupt falling down or caving in of a building or any part of a building, with the result that the building that is in danger of falling down or caving in is not considered to be in a state of collaspe. The policy insures for direct physical loss to covered property involving collaspe of a building or any part of a building if the collaspe was caused by one or more of the following: The perils insured against Decay that is hidden from view, unless the presence of such decay is known to an insured prior to collaspe. Insect or vermin damage that is hidden from view unless the presence of such damage is known to an insured prior to collaspe. Weight of contents, equipment, animals, or people. Weight of rain which collects on a roof. Use of defective material oe methods of construction, remodeling or renovation if the collaspe occurs during the course of the work. Loss to awnings, fences, patios, decks, pavement, swimmig pools, underground pipes, flues, drains, cesspool, septic tank, foundation, or retaining walls is not included under the definition of collaspe, unless the loss is a direct result of the collaspe of a building or any part of a building.

Trees, shrubs, and Other plants

Are covered if loss or damage is caused by fire, lightning, explosion, riot or civil commotion, aircraft, vehicle not owned or operated by a resident of the residence premise, vandalism or malicious mischief, or left. This is an additional amount of insurance and is limited to a maximum of $500 per tree, shrub, or plant, and a maximum per loss of 5% of the amount of coverage on the dwelling. In forms HO-4 and HO-6, the maximum per loss is 10% of the coverage C limit.

Terms to Know

Boarder- A person who lives with someone else for an agreed upon price, usually for a considerable amount of time. Counterfeit- Fraudulent imitation, forgery Incidental- Something occurring as a minor accompaniment to something else Material Misrepresentation- The intentional act of concealing or altering an important fact that would have altered the basic of a decision by the other party Named Peril- A risks or cause of loss specifically listed in a policy Open Peril- A term used in property insurance that describes the breadth of coverage provided under an insurance policy form that insures against "any risk of loss" that is not specifically excluded Subrogation- The right for an insurer to legally pursue a third party for recovery of the amount paid to the insured Third Party- A person (or group) other than the two involved in an insurance contract (insured and insurer)

Section I - Property Coverages

Coverage A: Dwelling Coverage B: Other Structures Coverage C: Personal Property Coverage D: Loss of Use All coverage forms include a basic deductible of $250, which applies to all coverage unless noted in the policy.

Reasonable repairs

Coverage is provided to cover the expenses incurred by the insured to make reasonable repairs to protect property from further damage following loss by a covered peril.

HO-5 (Comprehensive Form)

Covers both the dwelling and other structures on an open peril basis. It also covers personal property on an open perils, with the expectation of landlord furnishings in an apartment that is rented (or held for rental to others). Landlord furnishing is limited to $2,500 limit and provided on a named basis.

Additional Coverage's

Debris Removal- Reasonable repairs Tress, Shrubs, and other plants Fire department service charge Property Removed Credit card, electronic funds transfer card or access device, forgery and counterfeit money Loss Assessment Collapse Glass or Safety glazing material (Except in HO-4) Landlord's Furnishings (In HO-4 Only) Building additions and alternations Ordinance or Law Grave Markers Claim expense First aid to others Damage to the property of others Loss assessment coverage

Coverage Forms

Homeowner Policies are designed to cover dwellings used primarily for the owner-occupant of a dwelling used exclusively for private residental purposes and not as a vacation home. (The owner must occupy dwelling). Howeverw HO-2 Through HO-6 HO-2 (Broad Form) HO-3 (Special Form) HO-4 (Contents Broad Form) HO-5 (Comprehensive Form) HO-6 (Condominium Unit Owners)

Defintions

Homeowners policy forms include a Definitions section that defines serveral key terms. Understanding the terms used throughout the policy is criticial to comprehending the extent of coverage provided. Some of the more important terms definded in the policy include the following: Bodily injury Insured

(In HO-4 only)* Building additions and alternations

If the insured makes or acquires imorovements to the residence premise mad at his or her expense, the policy will provide an additional limit of insurance equal to 10% of Coverage C.

Bodily injury

Includes bodily harm, sickness or disease, including required care, loss of services, and death that results from bodily injury.

Residence employee

Includes employees of the insured whose duties are related to the maintenance or use of the home, including doing similar duties elsewhere.

Homeowners Policy

Insurance that protects property owners from property and liability risks. Different Homeowners policies (HO-2, HO-3, HO-4, HO-5, HO-6, and HO-8) This policy may be used for the following: -1 to 4 family owner-occupied residences -No more than 2 families or 2 roomers or boarders per unit -Various ownership types to include installments sale contracts, life estates, dwelling under construction, townhomes, and duplexes -Insuring a tenant of nonowned dwelling (Renters Form) -A residential Condominium or cooperative unit (Under a condominium form) -Seasonal dwellings and secondary residences

Property Removed Coverage

Is provided for any cause of loss for up to 30 days while covered property is being removed because of endangerment by covered peril.

Damage to property of others

Pays up to $1,000 per occurrence for property damage caused by an insured

Coverage E

Personal Liability- will respond if a claim is made or a suit is brought against an insured from damages due to bodily injruy (BI) or property damage (PD) caused by an occurrence to which the coverage applies. This coverage will do the following: Pay up to the policy's limit of liability for the damages for which an isnured is legally liable. Damages include prejudgement interest awarded against an insured. Provide a defense at the insurer's expense by counsel of the insurer's choice, even if the suit is groundless, false, or fraudulent. The insurer may investigate and settle any claim or suit that the insurer decides is appropriate. The insurer's duty to settle and defend ends when the policy's limit of liability for the occurrence has been exhausted by payment of a judgement or settlement. Under Coverage E, a $100,000 basic limit of liability is included. However the insured may purchase higher limits for an additional premium.

Under Coverage C (Personal Property) HO-6

Personal owned or used by an insured while it is anywhere in the world -After a loss and at the insured's request, it will cover personal property owned by -Others while the property is on the part of the residence premises occupied by an insured A guest or a residence employee, while the property is in any residence occupied by an insured.

Coverage A: Dwelling

Provided in all forms except the HO-4. The coverage is defined in a similar fashion to the dwelling property from with one exception: Building equipment or outdoor equipment used for servicing the residence is no longer included in Coverage A. Because contents coverage is included in all HO forms, these items will be covered in coverage C. Finally, the condominium form, HO-6, combines both coverage A and coverage B in this section of policy. Property Covered: Dwelling on the described premises listed in the declarations page and all attached structures; Any materials or supplies located on or next to the residence premise used to construct, alter, or repair the dwelling or other structures on the premises. HO-6 policies also include alternations, appliances, fixtures that are part of the building, items of real property, property which is the insured's responsibility to insure as part of an agreement and structures owned solely by the insured other than the residence premise. Property NOT COVERED: Land, including land on which the residence premise or other real property is located; HO-6 also includes items that would normally be listed as not covered in Coverage B, such as other structures held for rental to a person not a tenant of the dwelling unless used as a private garage, structures from which business is conducted and structures used to store business property unless the property is owned by the insured or a tenant of the dwelling.

HO-3 (Special Form)

Provides protection for dwelling and other structures on an open peril basis and personal property is covered only for broad perils Exclusions to the dwelling or other structures as follows -All the property, losses, and perils not covered because of limitations of the insuring agreement and the general exclusions -Damage caused by freezing while the dwelling is vacant, unoccupied, or being constructed unless the insured takes reasonable care to maintain heat in the premises or to shut off and drain the water supply. -Theft in or dwelling or structure under construction -Vandalism and Malicious mischief if the dwelling has been vacant for a certain period of time (More than 60 consecutive days in most states) -Gradual, preventable, or expected losses such as wear and tear, latent defect, Contamination, bulging, or expansion of foundations, pavements, walls, or floors -Faulty, inadequate or defective planning, zoning, surveying, design -Losses caused by weather conditions to the extent that they contributeto causes found in the general exclusions (flood power failure) -Acts, Decsions, or failure to act

HO-2 (Broad Form)

Provides provides protection for losses from named perils. There are some noticeable limitation that should be pointed out to a client. NOT COVERED: -The inside of a building for damage by rain, snow, sleet, sand, or dust unless wind or hail damage first creates the opening. -The inside of a building for loss by a falling object unless the falling object first damages the roof or an outside wall -Fences, Driveways, and walks for damage from a vehicle owned or operated by a resident -Damage from water or steam if dwelling is vacant for a period of more than 60 days.

Perils Insured Against

The broad form perils insured against for damage property in the homowners HO-2, HO-4 and HO-6 include the following: 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 or water or steam Sudden and accidental tearing apart, cracking, burning, or bulging Freezing Electrial damage Volcanic action These perils were covered in depth in the dwelling section, and have the same characteristics in the homeowners forms. Broad perils will apply to all applicable coverages (A,B,C,D) in the forms noted above. There are also the perils insured against for Coverage C in HO-3, HO-4, and HO-6. The HO-3 is open or special form coverage on Coverages A and B. Damage to the dwelling and other structures is covered unless it is excluded. The major exclusions are also listed in the dwelling property chapter. Coverage C losses in the HO-3 are covered for broad form perils. The HO-5 (Comprehensive) form is unique among the homeowners form in that the entire policy is open peril or special form. Therefore, Coverage A,B,C and resulting indirect losses in coverage D are covered unless excluded.

Exclusions

The exclusions in the homeowners form are similar to the dwelling property form. The property section has a list of general exclusions, and then forms HO-3 and HO-5 will have additional exclusions for any open peril or special form coverage. General property exclusions in HO policies are as follows: Ordinance or law Earth Movement Water Damage Power Failure Neglect War Nuclear Hazzard Intentional Loss and Goverment Action The HO-3 form will also have these additonal exclusions Freezing of plumbing, heating air conditioning or sprinkler system unless the heat is maintained or the water shut off and the systems are drained. However, if the building is protected by an automatic fire protective sprinkler system, the insured must use reasonable care to continue the water supply and maintain heat in the building for coverage to apply Freezing, thawing, pressure or weight of water or ice whether wind driven or not applies to fences, pavement, patios, swimming pools, footings and foundations, retaining walls, piers, wharfs or docks Theft in or to a dwelling under construction Damage by wind, hail, ice, snow or sleet to antennas, masts towers, lawn, trees, shrubs and plants Vandalism and malicious mischief if the dwelling has been vacant for more than 60 consecutive days prior to the loss Molds, fungus or wet rot unless the loss is hidden from view and caused by the accidental discharge or overflow of water or steam withing a plumbing, heating, air conditioning, sprinkler system, storm drain or water, steam or sewer pipe off the residence premise Constant or repeated seepage or leakage of water or steam over weeks, months or years Wear and tear, mechanical breakdown, smog, rust, mold, wet or dry rot Smoke form agricultural smudging or industrial operations Discharge, disperal, seepage, migration, release or escape of pollutants unless caused by a Coverage C peril (broad form peril) Settling, shrinking, bulging or expansion to include cracking that the results pavement, patios, footings, foundations, walls, floors, roofs or ceiling Damage done by birds, vermin, rodents, insects, or animals owned by the insured Weather conditions to the extent they contribute to an excluded cause of loss Acts, decisions, or failure to act or Faulty planning, design or materials (applies only to Coverage A or B) The HO-5 form will have all the same exclusions as HO-3, and some additional exclusions for Coverage C because coverage is provided on an open peril basis Breakage of eyeglasses, glassware, statues, bric-a-brac, porcelains and similar fragile articles unless breakage occurs as a result of named perils listed in the HO-5 exclusion section Dampness, extreme tempature changes unless direct loss is caused by rain, snow, sleet or hail Refinishing, renovating or repairing property other than watches, jewelry and furs Collision (other than with a land vehicle), sinking, swamping or stranding of watercraft to include trailers, furnishings, equipment and out board engines Govermental seizure, confiscation or destruction and Acts or decisions, or the failure to act or decide of any person, group, organization or govermental body. Exclusions that apply to both Coverage E and F are as follows: Motor Vehicle Liability- Coverage E and F don't apply to motor vehicle liability that arises from vehicles registered for public roads, unregistered motor vehicles that should have been registered at the place of occurrence, motor vehicles used in a race, competition, rented to others, used to carry cargo or persons for a fee or used in a business unless it is a motorized golf cart. The

Residence premises

The one family dwelling where the insured reside; The 2-, 3- or 4-family swelling where the insured resides in at least one of the family units; or That part of any other building where the insured resides, and which is shown as the residence premises in the Declarations. A residence premises also includes other structures and grounds at that location.

Insured

The policy defined Inusered as any of the following: The named insured Relatives of the names insured who reside with the name insured; Nonrelative residents in the care of the named insured or resident relatices under age 21; Full-time students under the age of 24 who are relatives of the names insured and who were residents prior to attending school (if the full-time student is a nonrelative, the coverage is provided only until the age of 21) In additions, for Section II - Liability, any person legally responsible for the insured's animals, watercraft, or certain types of motorized vehicles.

Claim Expsense

The policy will pay expenses incurred and costs taxed against the insured in any suit the insurer defends, premiums and bonds required in a suit, reasonable expenses, incurred by the insured including up to $250 per day for loss income, and interest on the entire judement that accrues after judement has been entered and before the insurer pays it.

Loss assessment coverage

The policy will pay up to $1,000 dollars per occurrence for the insured's share of loss assessment charged against them as owner or tenant of the residence premises, during the policy period, by corporation or associations of property owners.

Coverage B: Other Structures

Under other structures, a basic amount of insurance equal to 10% of the coverage A limit is included for other structures, but a policy may be written with higher limits. The definition of other structures is similar to that found in the dwelling policy program with some notable exceptions. The homeowners form substances the definition of business with the coverage description. The HO forms add coverage for grave markers and mausoleums as they are no longer included in the list of property not covered. PROPERTY COVERED: Other structures on the residence premises that are separated from the dwelling by a clear space, or connected only by a fence, utility line or similar connection; Other structures rented to anyone, other than a tenant of the dwelling, but only when used as a private garage.; Structures used to store business property of the insured tenant of the dwelling, as long as gaseous or liquid fuel is stored in a fuel tank of a vehicle or craft stored in the structure. PROPERTY NOT COVERED: Land including land where the other structures are located; Structures rented or held for rental to anyone other than a tenant of the dwelling when not used as a private garage; Other structures that are used to conduct any business.

Section II - Liability Coverage

Unlike the dwelling policy, liability coverage is included in all of the homeowners polic forms. The liability section of all homeowners policies includes 2 liability coverages: Coverage E - Personal Liability; and Coverage F - Medical payments to others

Glass or Safety Glazing Material

Will pay for breakage of glass or safety glazing material which is part of a covered building, storm door or or storm window. Coverage is provided for the same property if the loss is due to earth movement. Covered property is also protected from fragments or splinters of broken glass or safety glazing material. No coverage is provided if the dwelling has been vacant for more than 60 consecutive days immediately before the loss. This limitation does not apply to loss due to eart movement.

Debris Removal

Will pay reasonable expenses for the removal of debris of covered property for a covered cause of loss. Not an additional amount of insurance, but the homeowners policy will allow for an additional amount of insurance amount of debris removal expense if the amount to be paid for the actual damage to the property, plus debris removal expense is more than the limit of liability (additional 5% of the applicable limit). Debris removal expense could apply to coverage A, B or C.

Loss Assessment

Will pay up to $1,000 for the insured's share of a loss assessment charged during the policy aginst the insured as an owner or tenant of the residence premises by a corporation or association of property owners. The assessment must be made as a result of direct loss to property that is owned by the named insured. Damage to association property must be caused by a peril insured against, and does not include earthquake or land shock waves after a volcanic eruption.

(Except in HO-4)* Landlord's Furnishings

Will pay up to $2,500 for an insured's appliances, carpeting, and other household furinishings in each apartment on the residence premises regularly rented or held for rental to others. Covered causes of loss are limited to Coverage C perils, excluding theft. This is not an additional amount of insurance.

Grave Markers

Will pay up to $5,000 for grave markers, including mausoleums, for loss caused by a peril insured against, on or off residence premises. This coverage not increase the limits of liability that apply to the damaged covered property.

Fire Department Service Charge

Will pay up to $500 for liability assumed by agreement for fire department charges to protect insured property. The deductible does not apply, and the limit is an additional amount of insurance.

Credit Card, Electronic Fund Transfer Card, Access Denied, Forgery, and Counterfeit Money

Will pay up to $500 to cover the legal obligation of an insured to pay because of the theft or unauthorized use of credit card, electronic funds transfer card, loss caused by forgery of a check, or loss through acceptance of counterfeit money that duplicares U.S. or Canadian currency. No deductible applies, and the limit is considered additional insurance.

HO-8 (modified coverage form)

designed for older homes. Dwelling and other structures are based on the amount required to repair or replace using common construction materials and methods Theft Coverage- There is also a $1,000 basic limit that applies to theft losses, and no coverage for theft of personal property off premises. Worldwide Coverage- Coverage for personal property away from the premises is limited to the larger of 10% of the personal property limit or $1,000. Debris Removal- This is not considered an additional amount of insurance and is included in the total policy limit. Trees, plants or shrubs- The maximum limit for any one tree, plant, or shrub is only $250. Property or guests or residence employees- Property may be covered only while on the insured premises. Coverages A and B are provided on a functional replacement cost basis. Glass or safety glazing material losses are limited to $100.