.Homeowners Class .Insurance forms and endorsements vary based on insurance company; changes in edition dates; regulations; court decisions; and state jurisdiction. The instructional materials provided by The Insurance Community Center and its authors is intended as a general guideline and any interpretations provided by The Community do not modify or revise insurance policy language. Information which is copyrighted and proprietary to Insurance Services Office, Inc. (ISO Material) is included in this publication. Use of the ISO Material is limited to ISO Participating Insurers and their Authorized Representatives. Use by ISO Participating Insurers is limited to use in those jurisdictions for which the insurer has an appropriate participation with ISO. Use of the ISO Material by Authorized Representatives is limited to use solely on behalf of one or more ISO Participating Insurers. The authors of these materials, Insight Insurance Consulting and The Insurance Community Center assumes neither liability nor responsibility to any person or business with respect to any loss that is alleged to be caused directly or indirectly as a result of the instructional materials provided. Insight Insurance Consulting Copyright 2010 All Rights Reserved 2 .What this class will cover Steps in reviewing the residential property and identifying exposures Underwriting Considerations for the Homeowners Policy Policy Review 3 .Steps in reviewing residential properties and identifying exposures 4 .Steps in reviewing the residential property and identifying exposures 1.Conduct a Residence Inspection 2.Identify the types of residences to be insured 3. Identify the types of occupancy for each residence 4.Obtain information on the insured, ownership of the residence, and occupants 5.Identify hazards 5 .Steps in reviewing the residential property and identifying exposures 9.Complete the Homeowners Application 10.Determine which insurance companies are best suited for the risk in terms of eligibility, coverages and pricing 11.Submit the applications to the insurance companies 6 .Identify Type of Residential Property An insured might have multiple residences that they own and/or rent. Some of the residences may be owner occupied as primary residences while others could be seasonal; part time; or rented to others. 7 .Identify Type of Occupancy Own the residence and Occupy as primary residence Own the residence and Occupy as a secondary or part time residence Own the residence and Occupy as a residence on a farm Own the residence on a farm and rent it out Own and Occupy in part and rent out part of the residence (Duplex, 3-4 Family Dwelling) Own and Rent to Others Rent 8 .Identify Type of Ownership Husband and Wife (Vesting) Husband or Wife (Vesting) Domestic Partners (Vesting) Individuals Co-Owners Estate Arrangement Family or other Trust Contract of Sale LLC 9 .Underwriting Considerations for Homes Occupancy Owner Tenant Seasonal Secondary Condition of the home Age Upgrades Renovations Vacancy 10 .Underwriting Considerations for Homes Construction Details (such as) Roof Electrical Heating 11 .Underwriting Considerations for Homes Natural Hazards Location Flood, EQ, Wind Proximity to hazards like distance to tidal waters Brush Protection Class 12 .Underwriting Considerations for Homes Hazards Related to Occupancy Trampolines Dogs Swimming Pools Wood Burning Stoves Fuel Tank Storage 13 .Underwriting Considerations for Homes Hazards relating to the Insured Occupation Financial Stability Foreclosures/Bankruptcy Pride of Occupancy (Maintenance) 14 .Underwriting Considerations for Homes Usage of Home Residence Business, Agriculture, etc. Limits of Insurance Required Insurance to Value 15 .Underwriting Considerations for Homes Security SL Burglar Alarms Fire Protection Gated Community 16 .Homeowners Insurance 17 .What Types of Properties Are Insured On A Homeowners Policy A Single Family Dwelling A Multiple Family Dwelling (1-2 units) A Townhouse Unit 18 .Townhouse Similar to an individual home Two or more units Sharing of a common wall with individual ownership up to the middle There is joint ownership of common property and a property owners association 19 .Townhouse The owner owns the land beneath the home and the air above. All improvements to their land i.e., the dwelling portion to the undivided shared wall and an undivided interest in common areas. Pool, recreation areas, landscaping, etc. Homeowners Policy HO3 20 .Homeowners Forms Available There are several homeowners forms available. However, not all of the forms listed are written in all states Specifically the HO 0001, HO 0002, HO 0005, and HO 0008 are written in limited states. 21 .Homeowners Forms Available Homeowners Basic Form HO 0001 Not widely used Homeowners Broad Form HO 0002 Not widely used Homeowners Special Form HO 0003 Coverage A, B, C, D 22 .Homeowners Forms Available Contents Broad Form HO 0004 Coverage C,D Homeowners Comprehensive Form HO 0005 Coverage A, B, C, D Homeowners Unit Owners HO 0006 Coverage A, C, D 23 .Homeowners Forms Available Homeowners Modified Form HO 0008 Coverage A, B, C,D 24 .Components of the Policy 1.Agreement 2.Definitions 3.Deductible 4.Section I Property Coverages 5.Section I Perils Insured Against 6.Section I Exclusions 7.Section I Conditions 25 .Components of the Policy 8.Section II Liability Coverages 9.Section II Liability Exclusions 10.Section II Additional Coverages 11.Section II Conditions 12.Section I & II Conditions 26 .Definitions In the Homeowners Forms whenever a word is defined it is in parentheses in the policy language. Definitions are key to understanding the intent of the coverage and to determine whether coverage applies and if endorsements are required. 27 .You, We, Us, Our In this policy, "you" and "your" refer to the "named insured" shown in the Declarations and the spouse if a resident of the same household. "We," "us," and "our" refer to the Company providing this insurance. Lead-in language to the DEFINITIONS 28 .You, We, Us, Our In this policy, "you" and "your" refer to the "named insured" shown in the Declarations and the spouse if a resident of the same household. Note: Some carriers will write coverage for domestic partners. Note: There is a problem when a spouse is not named in the policy as a Named Insured if they are not residing with the spouse named on the policy. 29 .You, We, Us, Our Solution: Name the spouse as a Named Insured. Add the spouse as an Additional Insured using HO Trusts should be listed along with the individuals making up the trusts 30 .Definitions (Aircraft.) 1. Aircraft Liability, Hovercraft Liability, Motor Vehicle Liability and Watercraft Liability All definitions are put into the contract to define what is NOT covered on a Homeowners Policy 31 .Definitions Bodily Injury Bodily injury" means bodily harm, sickness or disease, including required care, loss of services and death that results. 32 .Definitions Bodily Injury Problem: Coverage is limited to only the defined term of Bodily Injury.` An insured who, in addition to the residence premises on the HO has a rental property that liability coverage has been extended to include, in the event of invasion of privacy, wrongful eviction, etc., has coverage gap exists. An insured who is operating a business as a sole proprietor, employee, or partnership in the event of libel, slander, has a coverage gap. 33 .Definition Business Prior to the Homeowners 2000 form the definition of business was: "Business" includes trade, profession or occupation. The definition was vague and open to interpretation. 34 .Definition Business Most courts who have examined the issue of defining business and business pursuits agree that two criteria must be satisfied for a business to exist: (a) Expectation of gain (b) At least some degree of continuity 35 .Definition Business "Business" means: A trade, profession or occupation engaged in on a full-time, part-time or occasional basis; or Any other activity engaged in for money or other compensation, except the following: One or more activities, not described in (2) through (4) below, for which no "insured" receives more than $2,000 in total compensation for the 12 months before the beginning of the policy period; 36 .Definition Business (2)Volunteer activities for which no money is received other than payment for expenses incurred to perform the activity; (3)Providing home day care services for which no compensation is received, other than the mutual exchange of such services; or (4)The rendering of home day care services to a relative of an "insured". 37 .Definitions Employee "Employee" means an employee of an "insured", or an employee leased to an "insured" by a labor leasing firm under an agreement between an "insured" and the labor leasing firm, whose duties are other than those performed by a "residence employee." 38 .Definition Insured "Insured" means: You and residents of your household who are: (a) Your relatives; or (b) Other persons under the age of 21 and in the care of any person named above; 39 .Definition Insured b. A student enrolled in school full time, as defined by the school, who was a resident of your household before moving out to attend school, provided the student is under the age of: (1) 24 and your relative; or (2) 21 and in your care or the care of a person described in a.(1) above; or 40 .Additional Insured Student Living Away From The Residence Premises - HO Allows the definition of insured to be expanded to include an older student. Must have originally been a resident of the household. Must be a relative (any age) or a non- relative under the age of 21 and under the care of another insured. Must be enrolled in school and reside at the scheduled address. 41 .Other Members Of Your Household - HO Expands the definition of insured to include any scheduled person. Allows the off-premises personal property coverage to apply for this persons benefit. The coverage for this persons personal property is part of Coverage C. Provides that the named insured will fairly represent this person to the insurance company and will act on that persons behalf. 42 .Assisted Living Care Coverage - HO This endorsement schedules a person living in an assisted living facility, such as long term nursing, assisted living, nursing home, rest home, etc. This person must be related to the insured by blood, marriage or adoption. This endorsement provides insured status for this scheduled person. 43 .Residence Held In Trust HO Expands the definition of insured to include a trustee, who is not named in the Declarations page. Includes specific members of their family. 44 .Other Insured considerations It is very common for a home owner to have a loan on their home or other types of property. The Lenders Loss Payable Endorsement 438 BFU NS (05 42) is attached to the policy to provide non-derivative protection for the lender. Additionally the lender is named on the declaration page. 45 .Additional Interests Residence Premises In addition to the Mortgagee this endorsement allows for other persons or organizations who have an interest in the residence premises to be listed on the policy. The form does provide cancellation and non renewal notification to the parties so indicated. 46 .Definition-Insured location Insured location means: a.The residence premises; b.The part of other premises, other structures and grounds used by you as a residence; and (1)Which is shown in the Declarations; or (2)Which is acquired by you during the policy period for your use as a residence; c.Any premises used by you in connection with a premises described in 4.a. and 4.b. above; 47 .Definition-Insured location d.Any part of a premises: (1) Not owned by an insured; and (2)Where an insured is temporarily residing; e.Vacant land, other than farm land, owned by or rented to an insured; 48 .Definition-Insured location f.Land owned by or rented to an insured on which a one, two, three or four family dwelling is being built as a residence for an insured; g.Individual or family cemetery plots or burial vaults of an insured; or h.Any part of a premises occasionally rented to an insured for other than business use. 49 .Definition- Motor Vehicle "Motor vehicle" means: a.A self-propelled land or amphibious vehicle; or b.Any trailer or semitrailer which is being carried on, towed by or hitched for towing by a vehicle described in a. above. NOTE: Definition is included to indicate what is NOT covered on a Homeowners Form 50 .Definition Occurrence "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in: a.Bodily injury; or b.Property damage. 51 .Definition Property Damage "Property damage" means physical injury to, destruction of, or loss of use of tangible property. 52 .Definition Residence Employee An employee of an insured or an employee leased to an "insured by a labor leasing firm, under an agreement between an insured and the labor leasing firm; whose duties are related to the maintenance or use of the residence premises including household or domestic services; or 53 .Definition Residence Employee One who performs similar duties elsewhere not related to the business of an insured. A residence employee does not include a temporary employee who is furnished to an insured to substitute for a permanent residence employee on leave or to meet seasonal or short tem workload conditions. 54 .Definition Residence Premises 8. "Residence premises" means: a. The one family dwelling, other structures, and grounds; or; b. That part of any other building; where you reside and which is shown as the residence premises in the Declarations. 55 .Definition Residence Premises Residence premises also means a two family dwelling where you reside in at least one of the family units and which is shown as the residence premises in the declarations. 56 .Deductible The deductible is applicable only to Section1Property Coverages The deductible will be indicated on the Declarations Page 57 .Coverages Provided Homeowners HO .Coverage Provided There are four coverages provided in the Homeowners. 59 A.DwellingInsured to 100% Replacement Cost B. Other Structures10% of Coverage A Dwelling C. Personal Property50% of Coverage A Dwelling D. Loss of Use20% of Coverage A Dwelling .Additional Limits Of Liability For Coverages A, B, C, And D - HO Used to increase the dwelling limit of coverage to apply when the loss exceeds the limit shown on the Declarations page. Specifies that the same policy percentages for Coverages B, C and D apply. 60 .Section 1 Property Coverage Coverage A Dwelling Coverage 61 .Dwelling The dwelling must be used for dwelling purposes to qualify for a Homeowners Policy It must be occupied for qualification Typically the forms will state will limit recovery if the building has been vacant for 60 consecutive days for Vandalism and Malicious Mischief and exclude theft to a home under construction Some forms exclude all coverage if the building has been vacant 60 days. 62 .Section I - Property Property Coverages Explains the categories of property covered, special limits, excluded property, and additional coverages Perils Insured Against Describes the perils covered for direct loss to covered property 63 .Section I - Property Exclusions Lists the perils that are uniformly excluded for all covered property Conditions Establishes the insurers and policyholders responsibilities, and defines how losses will be settled 64 .Coverage A - Dwelling The dwelling must be insured for 100% of the replacement cost. The dwelling amount is used to determine the coverages under B, C, and D as they are percentages of Coverage A 65 .Extended Replacement Cost (ERC) Many homeowners carriers are including Extended Replacement Cost for Coverage A on the policies. The ERC can be expressed as a percentage such as 125% or 150% of the coverage A limit. Or the ERC can be expressed in an additional amount of insurance on the Declarations Page 66 .Inflation Guard H0 243 (04-84)-Inflation Guard Endorsement Allows coverages A, B, C, D to be increased annually by a stated percentage. 67 .Coverage A - Dwelling Dwelling provides coverage on the dwelling structure located on the residence premises including structures attached to the dwelling for the amount indicated on the declarations page 68 .Coverage A - Dwelling Under Coverage Dwelling: materials and supplies located on or next to the residence premises used to construct, alter, or repair the dwelling or other structure on the residence premises. Land is not covered. 69 .Coverage A - Dwelling Problem: Definition of construction. There is no coverage for theft in or to a dwelling under construction, or of materials and supplies for use in the construction until the dwelling is finished and occupied. 70 .Coverage A - Dwelling Coverage A is generally provided on a replacement cost basis. The limit for coverage a must be at least 80% of the current replacement cost of the dwelling in order for losses to be settled at replacement cost. Replacement cost means the cost of replacing property without a reduction for depreciation. You must replace property or valuation reverts to actually cash value. 71 .Coverage A--Dwelling There is an exclusion for Ordinance or Law which means the enforcement of any ordinance or law regulating the construction, repair, or demolition of a building or other structure, unless specifically provided under this policy. There is an endorsement available to remove the exclusion 72 .Ordinance Or Law - Increased Amount Of Coverage - HO The homeowners policy allows for 10% of the limit of coverage for Coverage A Dwelling to apply to building ordinance compliance. This endorsement allows that percentage to be increased. Does not apply coverage to Coverage B, C or D. 73 .Functional Replacement Cost Loss Settlement - HO Allows for functionally equivalent building to replace the original structure. Buildings under Coverages A or B are eligible. Must be insured at least 80% to functional value. Must contract to rebuild within 180 days of loss. 74 .Coverage A - Dwelling Some companies have special reproduction provisions for older homes especially those on the registry 75 .Coverage B Other Structures Provided for Automatically for 10% of the Coverage A Dwelling Amount 76 .Coverage B Other Structures Coverage on a garage or other private structures not attached to or part of the dwelling. Includes such things as swimming pools, fences, tool sheds, tennis courts, and greenhouses. 77 .Coverage B Other Structures We cover other structures on the residence premises set apart from the dwelling by clear space. This includes structures connected to the dwelling by only a fence, utility line, or similar connection. 78 .Coverage B Other Structures We do not cover: Land Other structures rented or held for rental to any person not a tenant of the dwelling unless used solely as a private garage Other structures from which any business is conducted; or 79 .Coverage B Other Structures Other structures used to store business property. However, we do cover a structure that contains business property solely owned by an insured or a tenant of the dwelling provided that 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. 80 .Coverage B Other Structures The 10% of coverage A that is automatically provided as a coverage B limit is increased by some carriers or specific coverage on scheduled structures can be obtained by endorsement. 81 .Coverage B Other Structures The limit of liability for this coverage will not be more than 10% of the limit of liability that applies to Coverage A. Use of this coverage does not reduce the Coverage A limit of liability. 82 .Coverage B Other Structures Problem: If the insured operates an incidental business in the home, coverage for the dwelling is provided. If the insured operates an incidental business or stores business personal property in the other structure the other structure is not covered. 83 .Coverage B Other Structures Solution: H Permitted Incidental Occupancies - Residence Premises Covers an other structure being used for a business conducted by an insured at a specified limit.. Identify on the endorsement the type of business and if it is operated in the Dwelling or Other Structure. The business MUST be operated as the named insured appears. 84 .Other Structure Endorsements H Structures Rented to Others Residence Premises Covers described rental structures for a specified limit. 85 .Other Structure Endorsements H Other Structures - Increased Limits Increases coverage on detached structures for an amount excess of the policy amount. The structure(s) that necessitates the increase must be described. 86 .Coverage C Personal Property Provided for Automatically for 50% of the Coverage A Dwelling Amount 87 .Coverage CPersonal Property The ISO Homeowners Form provides for the percentage of Coverage A to be 50% There are insurance companies who will issue the coverage with a higher percentage automatically Some carriers will allow the percentage to be higher by endorsement 88 .Coverage CPersonal Property We cover personal property owned or used by an insured while it is anywhere in the world. Covers the insureds personal property worldwide, with no territorial restrictions 89 .Coverage CPersonal Property After a loss and at your request, we will cover personal property owned by: a.Others while the property is on the part of the residence premises occupied by an insured; b.A guest or residence employee, while the property is in any residence occupied by an insured. 90 .Coverage C Limit for Property at Other Residences Our limit of liability for personal property usually located at an insureds residence other than the residence premises is 10% of the limit of liability for Coverage C, or $1000, whichever is greater. However, this limitation does not apply to personal property: 91 .Coverage C Personal Property Clarification: There is 100% off premises coverage available under Coverage C for covered personal property not subject to special limitation anywhere in the world. There is a 10% limitation in a secondary Residence Premises. 92 .Personal Property Endorsement H Personal Property At Other ResidencesIncreased Limit Increases the 10% of Coverage C at an other residence by a specified amount. 93 .Coverage C Personal Property Special Limits of Liability. There are special limits for different categories of coverage Insurance companies vary as to the amount of coverage they provide automatically Insurance companies will allow increases in these coverages or specific insurance by category added by endorsement 94 .Types of Special Limits on Personal Property 1.Money, Gold, Coins, Etc. 2.Securities, Etc. 3.Watercraft, 4.Trailers & Equipments 5.Theft of Jewelry, watches, furs 6.Theft of firearms 7.Theft of silverware 8.Property on the residence premises used primarily for business 95 .Endorsements To Increase Internal Limits HO Increase Limits on Business Property allows the limit to be increased to a maximum of $10,000 on premises and 10% of the increased limit away from premises. The HO DOES NOT provide stored property or stock. It may not be used for a business being conducted BY THE INSURED on the residence premises. The insured can purchase broader coverage on an Inland Marine basis. 96 .Types of Special Limits on Personal Property 9.Property away from the residence premises used primarily for business purposes. 10.Electronic apparatus and accessories while in our upon a motor vehicle, but only if the apparatus is equipped to be operated by power from the motor vehicles electrical system while still capable of being operated by other power source. 97 .Assisted Living Care Coverage - HO This endorsement provides limited coverage for certain types of specified property, subject to the policy deductible. $250 for each hearing aid or other similar audio enhancement device. $100 for each pair of eyeglasses. $100 for all contact lenses. $500 for all false teeth or dentures. $500 for each medi-alert device. $250 for all walking aids and devices such as walkers or canes. $500 for each wheelchair 98 .Loss Settlement--Endorsements H0 290 (04-84) Property Replacement Cost Replaces ACV with RCV for Personal Property and awnings, carpeting, household appliances, outdoor antennas and outdoor equipment. H0 243 (04-84)-Inflation Guard Endorsement Allows coverages A, B, C, D to be increased annually by a stated percentage. 99 .Property Not Covered a.Articles separately described and specifically insured in this or other insurance b.Animals, birds or fish (Mortality) c.Motor vehicles and parts (PAP) d.Aircraft and parts (Personal Aircraft) e.Hovercraft f.Property of roomers, boarders, and other tenants (Personal HO4) 100 .Property Not Covered h.Property in an apartment regularly rented or held for rental to others by an insured i.Business data including such data stored in .Credit Cards,Electronic Fund Transfers j.Water or Steam 101 .Endorsements To Increase Internal Limits Increased Special Limits Of Liability H / H (with H and H only) Money, securities, jewelry, firearms, silverware, electronic apparatus while in or while out of a vehicle are the classes of property that may be increased with this endorsement. 102 .Endorsements To Increase Internal Limits H Scheduled Personal Property Endorsement Allows certain classes of property to have specific coverage with broader perils and no deductible. 103 .Scheduled Personal Property Endorsement The Scheduled Personal Property Endorsement Provides Coverage for a Schedule (List) of Specific Items. 104 .Scheduled Personal Property Endorsement A Loss to a Scheduled Item (Other Than Fine Art) Is Settled at the Lesser Of: Actual Cash Value The Cost to Repair the Item The Amount for Which the Item Could Be Replaced With on Substantially Identical to the Lost or Damaged Item. 105 .Scheduled Personal Property Endorsement (With Agreed Value Loss Settlement) - HO Allows for scheduled items to be paid at the scheduled amount shown. HO still provides coverage at ACV, except for fine arts, which are covered as scheduled. Expands the coverage to worldwide for all types of scheduled property. This endorsement also contains broad form pair and set coverage. This endorsement allows for a buy back of surrendered property. 106 .Identity Fraud Expense Coverage HO The endorsement provides up to $15,000 for expenses incurred by an insured as the direct result of any one identity fraud first discovered or learned of during the policy period. 107 .Loss of Use Additional Living Expense Provided for Automatically for 20% of the Coverage A Dwelling Amount 108 .Coverage DLoss of Use There are four insuring agreements 1.Additional Living Expense 2.Fair Rental Value 3.Civil Authority Prohibits Use 4.Loss or Expense Not Covered 109 .Coverage D Loss of Use 2000 Edition Date Changes 3.Civil Authority Prohibits Use If a civil authority prohibits you from use of the "residence premises" as a result of direct damage to neighboring premises by a Peril Insured Against, we cover the loss as provided in 1. Additional Living Expense and 2. Fair Rental Value above for no more than two weeks. 4.Loss Or Expense Not Covered We do not cover loss or expense due to cancellation of a lease or agreement. 110 .Coverage D Loss of Use Loss of Use is provided for 20% of the dwelling amount If a covered loss makes the insured dwelling uninhabitable, the policy allows two methods of compensation for such loss: 111 .Coverage D Loss of Use Some insurance companies do limit Loss of Use with a percentage. Some companies will provide for unlimited Loss of Use but will specify the length of time they will pay for example 18 months. 112 .Coverage D Loss of Use Additional Living Expenses- the necessary increase in living expenses incurred by the insured to maintain the insureds normal standard of living. Fair Rental Value- the amount of rent that could reasonably be charged for the premises, less any expenses that do not continue while the premises are uninhabitable. 113 .Coverage D Loss of Use 4.We will pay for the necessary increase in your normal living expense if: a.Your residence is made untenantable by an off-premises power stoppage; and b.This power stoppage is caused by a peril insured against under Coverage A, B, or C 114 .Coverage D Loss of Use This coverage extension will not start until the residence premises has been untenantable for 48 hours and will continue for no longer than 7 days. 115 .Additional Coverages Subject to Certain Limitations for Specific Perils and Types of Losses 116 .Additional Coverages 1.Debris Removal 2.Reasonable Repairs 3.Trees, Shrubs, and Other Plants 4.Fire Department Service Charge 5.Property Removed 6.Credit Card, Fund Transfer Card, Forgery, and Counterfeit Money 117 .Additional Coverages 7.Loss Assessment 8.Collapse 9.Glass or Safety Glazing Material 10.Landlords Furnishings 11.Ordinance or Law** 12.Grave Markers **New in .Loss Assessment We will pay up to $1,000 for your share of loss assessment charged during the policy period against you, as owner or tenant of the "residence premises", by a corporation or association of property owners. 119 .Loss Assessment The assessment must be made as a result of direct loss to property, owned by all members collectively, of the type that would be covered by this policy if owned by you, caused by a Peril Insured Against under Coverage A, other than: (1) Earthquake; or (2) Land shock waves or tremors before, during or after a volcanic eruption. 120 .Loss Assessment Endorsements H Loss Assessment Coverage Increases the limit for loss assessments (up to $50,000 maximum). Limits deductible Loss Assessments to $1,000. Optional limits available for other specified locations. 121 .Loss Assessment Endorsements H Loss Assessment Coverage For Earthquake Adds coverage for earthquake damage at specifically described locations for a purchased limit at each location using a percentage deductible. 122 .Ordinance or Law You may use up to 10% of the limit of liability that applies to Coverage A for the increased costs you incur due to the enforcement of any ordinance or law which requires or regulates This is new to the 2000 series. This can be increased with the HO Ordinance or Law Increased Amount of Coverage. 123 .Perils of Insurance 124 .Perils for Coverages A and B We insure against risk of direct loss to property described in coverage A and B only if that loss is a physical loss to property 125 .Perils for Coverages A and B Perils excluded for Coverages A and B Coverage is limited by the perils excluded. If a peril is not listed within these exclusions, it is covered. 126 .Perils for Coverage C We insure for direct physical loss to property described in Coverage C caused by a peril listed below unless the loss is excluded in Section 1Exclusions 127 .Perils for Coverage C 1.Fire or Lightning 2.Windstorm or Hail 3.Explosion 4.Riot or Civil Commotion 5.Aircraft 128 .Perils for Coverage C 6.Vehicles 7.Smoke 8.Vandalism or Malicious Mischief 9.Theft 10.Falling Objects 11.Weight of Ice, Snow, or Sleet 129 .Perils for Coverage C 12.Accidental Discharge or Overflow of Water or Steam 13.Sudden and Accidental Tearing Apart, Cracking, Burning, or Bulging or a Steam, Hot Water, Air Conditioning or Automatic Sprinkler System, or Appliance for Heating Water 130 .Perils for Coverage C 14.Freezing 15.Sudden and Accidental Damage from Artificially Generated Electrical Current 16.Damage by glass or safety glazing material 17.Volcanic Eruption 131 .Water Back-Up and Sump Discharge or Overflow HO Provides for up to $5,000 for direct physical loss not caused by the negligence of an insured to property covered under Section 1 caused by water, or waterborne material which backs up through sewers or drains or overflows from a sump pump 132 .Section I--Exclusions 1.Ordinance or law 2.Earth movement 3.Water damage 4.Power failure 5.Neglect 6.War 7.Nuclear hazard 8.Intentional loss 9.Governmental Action 133 .Section I--Exclusions a.Weather Conditions b.Acts or decisions including the failure to act c.Faulty, inadequate or defective: Planning, zoning, development, surveying, siting Design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction Materials used in repair, construction, renovation or remodeling; or Maintenance 134 .Conditions A.Insurable Interest and Limit of Liability B.Duties After the Loss C.Loss Settlement D.Loss to a Pair or Set E.Appraisals F.Other Insurance and Service Agreement G.Suit Against Us H.Our Option 135 .Conditions I.Loss Payment J.Abandonment of Property K.Mortgagee Clause L.No Benefit to Bailee M.Nuclear Hazard Clause N.Recovered Property O.Volcanic Eruption Period 136 .Conditions P.Policy Period Q.Concealment or Fraud R.Loss Payable Clause 137 .Section IILiability Coverages 138 .Section II Liability Coverage EPersonal Liability If a claim is made or a suit is brought against an insured for damages because of bodily injury of property damage caused by an occurrence to which this coverage applies,we will 139 .Section II Liability 1.Pay up to our limit of liability for the damages for which an insured is legally liable. Damages include prejudgment interest awarded against an insured and 2.Provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent We may investigate and settle any claim or suit that we decide is appropriate. Our duty to settle or defend ends when our limit of liability for the occurrence has been exhausted by payment of a judgment or settlement. 140 .Who Is an Insured for Section II - Liability Coverage? The named insureds spouse, if a resident of the same household. Note that it is always correct to show both spouses as named insureds, even if only one of them is on the deed. Show the owner on the first line with the correct trust deed ownership information and then the second spouse. 141 .Who Is an Insured for Section II - Liability Coverage? Relatives of the named insured, if residents of the same household. Anyone under the age of 21, if in the care of the named insured or resident relative and if residents of the same household. 142 .Coverage E Personal Liability It also may be extended beyond bodily injury and property damage to include liability for personal injury with the personal injury endorsement (HO 24 82). 143 .Liability Coverages Coverage FMedical Payments To Others To others Incurred within three years Reasonable charges On the insured location: Persons on the insured location with the insureds permission. 144 .Coverage F Medical Payments to Others Off the insured location: Arises out of a condition on the insured location or adjoining ways. Is caused by the activities of an insured. Is caused by a residence employee in the course of employment by an insured. Is caused by an animal owned by or in the care of an insured. 145 .Section II Exclusions Motor Vehicles - Coverage is Excluded Registered for use on public roads Used for Auto racing, or other competition Rented to others Carrying persons or cargo for a fee Business purposes 146 .Section II Exclusions Motor Vehicles -Coverage Applies In dead storage Solely for residence servicing Designed to assist the handicapped Being used as such Parked on an insured location Recreational use off public roads Not owned by an insured Owned by insured and on premises 147 .Section II Exclusions Motorized golf carts coverage applies Parked at a golf course In use at a golf course Travel to and from the course Crossing roads in the course of play Private residential community 148 .Section II Exclusions Watercraft - Coverage is Excluded Organized race or other competition Give back sailboats Predicted log cruises Rented to others Used to carry persons or cargo for a fee Used for business purposes 149 .Section II Exclusions Watercraft - Coverage Applies Stored Sailboat Less than 26 feet More than 26 feet not owned or rented Motorboat Inboard/Outdrive not owned 150 .Section II Exclusions Watercraft - Coverage Applies 25 Hp or less More than 25 Hp If not owned or rented Acquired during the policy period Reported or not Coverage applies for the policy period Acquired before the policy period Declared at policy inception Reported within 45 days of inception 151 .Endorsements H Snowmobile Provides Liability and Medical Payments coverage for owned snowmobiles specifically described on the endorsement. HO Snowmobile Provides Liability and Medical Payments coverage for owned snowmobiles specifically described on the endorsement. 152 .Endorsement H Watercraft Provides Liability and Medical Payments coverage for described watercraft. 153 .Section II Exclusions Aircraft This policy does not cover aircraft liability. Hovercraft This policy does not cover aircraft liability. 154 .Section II Exclusions Coverage E&F Expected Or Intended Injury Business** Professional** Services insureds Premises Not An Insured Location War Communicable Disease Sexual Molestation, Corporal Punishment Or Physical Or Mental Abuse Controlled Substances 155 .Business Exclusion Business Pursuits of the Insured, or the Rental or Holding for Rental of Any Premises by the Insured, Except If: Rented on an Occasional Basis Rented to No More Than Two Roomers or Boarders for a Single Family Unit Rented Only As an Office, School Studio, or Private Garage 156 .Business Endorsements HO No Section IILiability Coverages For Home Day Care Business Limited Section IProperty Coverages For Home Day Care Business HO Home Business Insurance Coverage 157 .Business Endorsements HO Home Day Care Coverage HO Business Pursuits 158 .Professional Exclusion "Bodily injury" or "property damage" arising out of the rendering of or failure to render professional services; 159 .Exclusions for Coverage E Only Personal Liability Does Not Apply To: Liability for the insureds share in any loss assessment as a member of an association, corporation, or community of property owners. Liability assumed under any contract or agreement. Property damage to property owned by the insured. 160 .Exclusions for Coverage E Only Property Damage to Property Rented To, Occupied, Used by or in the Insured Care but Covers Damage Caused by Fire, Smoke, or Explosion. Bodily injury to any person eligible to receive benefits under any Workers compensation law; Non-occupational disability law; or Occupational disease law. 161 .Exclusions for Coverage E Only All Bodily Injury or Property Damage Covered Under a Nuclear Energy Liability Policy. Workers Compensation Intra-family Suits 162 .Exclusions for Coverage F Only Coverage does not apply to bodily injury To a residence employee To any person eligible to receive benefits voluntarily From any nuclear reaction, nuclear radiation, or radioactive contamination 163 .Section II - Additional Coverages Claims expenses First Aid expenses Damage to property of others Loss assessment Limit of Liability Severability Duties after an Occurrence 164