HO-3 (NV) Ed. 6/94

DwellingPersonal PropertyLoss of Use

Stock No. 16985

NEVADA HOMEOWNERS POLICYSPECIAL FORM 3

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This policy is a legal contract between you (the policyholder) and the American Family Mutual Insurance Company. This cover sheet providesonly a brief outline of some important features in your policy. The policy itself sets forth, in detail, the rights and obligations of you and ourcompany. It is important that you read your policy carefully.

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� Beginning on Page

� See Declarations

READ YOUR POLICY CAREFULLY

YOUR HOMEOWNERS POLICY QUICK INDEX REFERENCENamed InsuredLocation of Your PropertyPolicy PeriodCoveragesAmounts of InsuranceLoss Deductible

INSURING AGREEMENTDEFINITIONSPROPERTY COVERAGES - Section I

SUPPLEMENTARY COVERAGES - Section I

EXCLUSIONS - Section ICONDITIONS - Section ILIABILITY COVERAGES - Section II

Personal Liability CoverageMedical Expense CoverageSUPPLEMENTARY COVERAGES - Section II

EXCLUSIONS - Section IICONDITIONS - Section IIGENERAL CONDITIONS

CancelationNon-RenewalPolicy Period, Renewal of Coverage, Premiums and ChangesADDITIONAL PROTECTION YOU MAY BUY

PERILS INSURED AGAINST - Section I

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Claim and Defense ExpensesDamage to Property of OthersEmergency First AidLoss Assessments

THIS POLICY IS NON-ASSESSABLEAMERICAN FAMILY MUTUAL INSURANCE COMPANY

6000 AMERICAN PARKWAYMADISON, WISCONSIN 53783-0001(608) 249-2111A MUTUAL INSURANCE COMPANY

CollapseCredit/Debit Card, Forgery and Counterfeit MoneyDebris RemovalEmergency Removal of PropertyFire Department Service ChargeGrave MarkersInflation Protection CoverageLoss AssessmentsOutdoor AntennasPollutant Cleanup and RemovalProtective RepairsRefrigerated Food ProductsTrees, Plants, Shrubs and Lawns

HO-3 (NV) Ed. 6/94

You represent the statements in your application to be true and this policy is conditioned upon the truth of your statements.

Stock No. 16985

If you own the three or four family dwelling describedin the Declarations, the insured premises means: thatdwelling building, related private structures and groundsat that location where you reside. Under Coverage B -Personal Property only, the insured premises means:the parts of the described location which are used oroccupied solely by your household for residentialpurposes;

Business means any profit motivated full or part-timeemployment, trade, profession or occupation and including theuse of any part of any premises for such purposes. Theproviding of home day care services to other than insureds, forwhich an insured receives monetary or other compensation forsuch services is also a business.

Bodily Injury means bodily harm, sickness or disease. Itincludes resulting loss of services, required care and death.Bodily injury does not include:

emotional or mental distress, mental anguish, mentalinjury, or any similar injury unless it arises out of actualbodily harm to the person.

with respect to vehicles covered by this policy, adomestic employee of any person included inparagraph a. while engaged in the employment of thatperson.

any person while working as a domestic employee ofany person included in paragraph a.

any person or organization legally responsible for awatercraft or animal owned by any person included inparagraph a. to which Section II Coverages apply. Thisdoes not include a person or organization using orhaving custody of the watercraft or animal in thecourse of any business or without your specificpermission.

the exposure to any such communicable disease, bacteria,parasite, virus or other organism; or

Domestic Employee means a person employed by an insuredto perform duties for the maintenance or use of the insuredpremises. This includes persons who perform domesticservices elsewhere for an insured. This does not includepersons while performing duties for an insured's business.

You and all insureds must comply with the policy terms. Any failure to comply with policy terms by you or any other insured will affect thecoverage afforded by this insurance for you and all insureds.

Credit/Debit Card means any card, plate, coupon book or othercredit device for the purpose of obtaining money, property,labor, services on credit or for deposit, withdrawal or transfer offunds.

We will provide the insurance described in this policy in return for your premium payment and compliance with all policy terms. We willprovide this insurance to you in reliance on the statements you have given us in your application for insurance with us.

Limit means the limit of liability that applies for the coverage.

The insured premises also includes any other premiseswhich an insured may occasionally rent for other thanbusiness purposes.

any premises you use in connection with the describedlocation.

the part of any residential premises not owned by aninsured, while an insured is temporarily residingthere; and

an insured's individual or family cemetery lots andburial vaults;

vacant land (other than farm land) owned by or rentedto an insured. This includes land on which a one ortwo family dwelling is being built for the personal useof an insured;

the part of any residential premises you acquire foryour occupancy during the policy period if we arenotified within 30 days following the date you acquiredsuch premises;

For Personal Liability and Medical Expense Coverages,insured premises also include:

If you own the townhouse or row house at the locationdescribed in the Declarations, the insured premisesare: that townhouse or row house, related privatestructures and grounds used or occupied solely by yourhousehold for residential purposes at that location.

If you own the one or two family dwelling described inthe Declarations, the insured premises means: thatdwelling, related private structures and grounds at thatlocation where you reside;

Each person described above is a separate insured underthis policy. This does not increase our limit.

If you die, the person having proper temporary custody ofcovered property replaces you as the named insured. Thisapplies only to insurance on covered property and legalliability arising out of that property. If you die, any personwho is an insured continues to be an insured whileresiding on the insured premises.

with respect to vehicles covered by this policy, anyother person using such vehicle on the insuredpremises with your permission.

Under Personal Liability and Medical Expense Coverages,insured also means:

your relatives; andInsured means you and, if residents of your household:

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The following words in this policy have defined meanings.They will be printed in bold type.1.

a.

b.

2.

3.

4.

5.(1)(2)

b.(1)

(2)(3)

(4)

c.

6. Described Location:(1)

(2)

(3)

Insured Premises

b.(1) other premises listed in the Declarations;(2)

(3)

(6)c. For Personal Liability Coverage:

7.

(4)(5)

d.

INSURING AGREEMENT

any of the following which are communicable: disease,bacteria, parasite, virus or other organism which aretransmitted by any insured to any other person;

c.

Medical Expenses means usual and customary charges fornecessary medical, surgical, x-ray, dental, ambulance, hospital,professional nursing, prosthetic devices and funeral services.8.

a.any other person under the age of 21 in your care or inthe care of your resident relatives.

Insured

a.

DEFINITIONS

HO-3 (NV) Ed. 6/94 Stock No. 16985

which is usually at any insured's residence, other thanthe dwelling described in the Declarations. Thisincludes property of a student, who is an insured, at aresidence occupied by the student while away atschool.This limitation does not apply to personal property in anewly acquired principal residence located in the UnitedStates for the first 30 days after you begin to movethere.

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structures rented or held for rental to other than a tenant inyour dwelling, unless used solely as a private garage;

We cover:

Vacant means being without contents or occupant, includingwhen the insured has established another residence and doesnot intend to reoccupy this dwelling.

We will provide coverage up to 10% of the Coverage B -Personal Property limit but not less than $2500 for anypersonal property:

others while it is on the part of the insured premisesoccupied exclusively by any insured; or

if you ask us to, and when not insured by the owner,personal property owned by:

personal property owned by or used by any insuredanywhere in the world.

structures designed or used in whole or in part for business;

construction material located on or next to the insuredpremises for use in connection with the other structures.

other structures on the insured premises not attached to thedwelling, and those structures connected to the dwelling byonly a utility line, fence or similar connection;

We cover:

construction material located on or next to the insuredpremises for use in connection with your dwelling; and

the described dwelling on the insured premises includingadditions, built-in components and fixtures;We cover:

Property Damage means physical damage to or destruction oftangible property, including loss of use of this property. Loss ofuse of tangible property does not include any resulting loss ofvalue of such damaged property.

Occurrence means an accident, including exposure toconditions, which results during the policy period, in:9.

10.

11.

12.

13.14.

We, us and our refer to the American Family Mutual InsuranceCompany.You and your refer to the person or people shown as thenamed insured in the Declarations. These words also refer toyour spouse who is a resident of your household.

COVERAGE A - DWELLING1.2.3. attached and/or wall-to-wall carpeting in the described dwelling.Dwelling Extension:1.

2. fences, driveways, sidewalks and permanently installed yardfixtures; and3.This is additional insurance for an amount up to 10% (in theaggregate) of Coverage A - Dwelling.Coverage A - Dwelling and Dwelling Extension do not cover:1. outdoor antennas including their lead-in wiring, accessories,masts and towers, except as covered by SupplementaryCoverages;2. detachable building items covered by Coverage B - PersonalProperty;3. curtains, drapes and other window coverings, all whether ornot installed, except as covered by Coverage B - PersonalProperty;4.5.6.

COVERAGE B - PERSONAL PROPERTYa.b.

(1)(2)

1.

This coverage also includes:a. window air conditioners;b. curtains, drapes and other window coverings, whether ornot installed;c. outdoor equipment; andd. yard fixtures not permanently installed.2. Limitations on Specific Propertya.

(1) when taken outside the United States; or(2)

b.

(1) $200 on money, bank notes, negotiable instruments (asdefined by statute), bullion, gold other than goldware,silver other than silverware, platinum, coins, medalsand numismatic property;(2)

a house guest or domestic employee while it is in anyresidence occupied by an insured.

natural water.7.

b.a. bodily injury; or

property damage.

PROPERTY COVERAGES - SECTION I

The following special limits apply to certain categories ofpersonal property. These limits do not increase theCoverage B limit shown in the Declarations. Each limitbelow is the total limit for each loss for all property inthat category:

Pollutant means any solid, liquid, gaseous or thermal irritant orcontaminant, in any form, including, but not limited to lead,asbestos, formaldehyde, radon, any controlled chemical sub-stance or any other substance listed as a hazardous substanceby any governmental agency. It also includes smoke, vapor,soot, fumes, alkalis, chemicals, garbage, refuse and waste.Waste includes materials to be recycled, reconditioned orreclaimed.

$1000 on securities, accounts, deeds, evidences ofdebt, letters of credit, notes other than bank notes,manuscripts, personal records, passports, tickets,stamps and other philatelic property. This dollar limitapplies to these categories regardless of the medium(such as paper or computer software) on which thematerial exists. This limit includes the cost to research,replace or restore the information from the lost ordamaged material.

any land or the value of any land, including land on which thedwelling or other structures are located, or the cost to restore,repair, rebuild or stabilize land. If a covered loss causesdamage to the dwelling or other structures and to the land, wedo not cover any increased cost to repair or rebuild thedwelling or other structures because of damage to the land; orMultiple withdrawals from a single account over anyperiod of time are considered to be one loss and ourliability for the total of such withdrawals will notexceed the maximum limit for this category of personalproperty at the time the loss was discovered;$1000 on jewelry, watches, precious and semi-preciousstones, gems and furs;$1000 on any type of watercraft, including their trailers,equipment, accessories and outboard motors;$1000 on camping trailers, camper bodies and trailersnot used with watercraft;(5)

(4)(3)

Continuous or repeated exposure to substantially the samegeneral harmful conditions is considered to be one occur-rence.

HO-3 (NV) Ed. 6/94 Stock No. 16985

any device, accessory or antenna designed for reproducing,detecting, receiving, transmitting, recording or playing backdata, radar, sound or picture (or any film, tape, wire,record, disc or other medium designed for use with suchdevice) which may be operated from the electrical systemof a land motor vehicle, farm equipment or watercraft andwhile in or on the land motor vehicle, farm equipment orwatercraft;

$7500 for loss by theft of tools.

$1200 on property used or intended for use in anybusiness, while on the insured premises. This doesnot include electronic data processing equipment or therecording or storage software used with suchequipment;

$1200 on any one item for loss by sudden andaccidental damage from artificially generated electricalcurrents. This does not include electronic dataprocessing equipment or the recording or storagesoftware used with that equipment; or

$5000 on any one article and $10,000 in the aggregatefor loss by theft of any rug, carpet (except attachedwall-to-wall carpeting), tapestry, wall hanging or othersimilar article;

while off the insured premises when removedtemporarily for up to 30 days. However, propertyof a student, who is an insured, is covered at aresidence occupied by the student while away atschool.

$250 on property used or intended for use in anybusiness while away from the insured premises.This does not include electronic data processingequipment or the recording or storage software usedwith such equipment;

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Payment will be for the shortest time required to repair orreplace the damaged property or, if you permanently relocate,the shortest time required for your household to settle else-where.

business property owned by others while away from theinsured premises;

We do not cover loss or expense due to cancelation of a lease oragreement or arising out of your mortgage agreement.

If a loss covered under this section makes that part of theinsured premises rented to others or held for rental by youuninhabitable, we will pay:

The limit for Coverage C is the actual loss incurred by you within12 months following the date of loss for all the following coverages.

Fair Rental Value, meaning the fair rental value of thatpart of the insured premises rented to others or held forrental by you less any expenses that do not continue whilethe premises is uninhabitable.

property of a roomer, boarder, tenant or other resident whois not an insured;

property rented or held for rental to others when not on theinsured premises;

land motor vehicles or motor propelled vehicles ormachines, whether assembled or unassembled, includingtheir equipment and accessories. We do cover thosemotorized land conveyances designed for assisting thehandicapped or used solely for the service of the insuredpremises and not licensed for road use;

when located on the insured premises; or

(7)

(8) $5000 for loss by theft of silverware and goldware;(9) $5000 for loss by theft of firearms and accessories;(10) $5000 on electronic data processing equipment and therecording or storage software used with suchequipment. Coverage for this property is provided only:(a)(b)

The recording or storage software will be covered onlyup to:

(b) the retail value of the software in blank orunexposed form, if blank or self-programmed;(11)

(12)

(6)

(13)3. Personal Property Not CoveredCoverage B does not cover:a. property separately described or specifically insured by thispolicy or any other insurance;b. animals, insects, birds and fish;

e.f.

g.h. outdoor antennas, their lead-in wiring, accessories, mastsand towers, except as covered by SupplementaryCoverages;

j.

natural water.COVERAGE C - LOSS OF USE

1.

2.

Payment will be for the shortest time required to repair orreplace that part of the premises rented or held for rental.3.

The periods of time under 1, 2 and 3 above are not limited byexpiration of this policy.

If a loss covered under this section makes that part of theinsured premises where you reside uninhabitable, we willpay:

1.

a.

b.c. hidden insect or vermin damage;d. weight of people, animals, equipment or contents;hidden decay;

aircraft and parts, whether assembled or unassembled. Wedo cover model aircraft not used or designed fortransporting cargo or persons;d.

SUPPLEMENTARY COVERAGES - SECTION I

c.

the retail value of the software, if pre-programmed;or(a)

trees, plants, shrubs and lawns, except as covered bySupplementary Coverages;i.

credit/debit cards except as covered by SupplementaryCoverages;land; or

k.l.m.

If a civil authority prohibits you from use of the insuredpremises as a result of direct damage to neighboring premisesby a Peril Insured Against in this policy, we cover theAdditional Living Expense or Fair Rental Value loss as providedabove for a period not exceeding two weeks during which useis prohibited.

Additional Living Expense, meaning any necessaryincrease in living expenses incurred by you so that yourhousehold can maintain its normal standard of living.

Collapse. We cover risk of direct physical loss to coveredproperty involving collapse of a building or any part of abuilding caused only by one or more of the following:

We provide the following Supplementary Coverages. Thesecoverages are subject to all terms of this policy, except wheremodified by the Supplementary Coverage.Perils Insured Against in Coverage B. These perils apply tocovered building(s) and personal property for loss insuredby this Supplementary Coverage;

HO-3 (NV) Ed. 6/94 Stock No. 16985

Multiply the resulting factor by the limits for Coverages A andB. At each renewal, we will correct the amount of Coverages Aand B to the nearest $100* in accordance with the changes inthe Residential Building Cost Index. (For rounding, $50.00 ormore is raised to one hundred dollars, $49.99 or less is treatedas $0.00.) We will adjust the renewal premium accordingly.

Collapse does not include settling, cracking, shrinking, bulgingor expansion.

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This coverage does not increase the limit applying to thedamaged covered property.

We do not cover loss assessments charged against you or acorporation or association of property owners by anygovernmental body.

This coverage applies only to loss assessments charged againstyou as owner or tenant of the insured premises.

We will not reduce the limits to less than those previouslyspecified without your consent.

To determine the amount of insurance on a given date, dividethe latest available index by the index level shown on yourlatest Declarations.

Inflation Protection Coverage. We will increase the insurancefor Section I Coverage A - Dwelling and Coverage B - PersonalProperty at the same rate as the increase in the ResidentialBuilding Cost Index. This index is identified on your latestDeclarations page.

Grave Markers. We will pay up to $5000 for direct loss byPerils Insured Against in Coverage B to cover grave markers.

Emergency Removal of Property. We will pay for loss tocovered property while being removed or while removed fromthe insured premises because of danger from a Peril InsuredAgainst. Such property is covered against accidental direct lossfrom any cause for a period up to 30 days. This coverage doesnot increase the limit applying to the property being removed.

extract, remove or dispose of pollutants from naturalresources, buildings or other structures away from anyinsured premises;

extract pollutants from land or water;We will not pay the costs, expenses, fines or penalties to:located more than 250 feet from the dwelling on theinsured premises.grown for business purposes; orWe do not cover debris removal of any trees:

the falling of the tree is caused by any peril we insureagainst under Coverage B; and

We will also pay up to $500 in the aggregate for any one lossfor reasonable expenses incurred by you in removing any fallentrees from the insured premises if:

If the damage to that property and the cost of debris removal ismore than our limit for the property, we will pay up to anadditional 5% of that limit for debris removal.

Debris Removal. We will pay reasonable expenses you incur toremove debris of covered property following a covered lossfrom a peril we insure against.

the loss occurs while a person, not an insured, haspossession of the credit/debit card with an insured'spermission.

the loss results from business activities of anyinsured; orthe loss is caused by the dishonesty of any insured;the insured has not complied with the provisions underwhich the credit/debit card was issued;

We will not pay for loss if:

becomes legally obligated to pay for the theft orunauthorized use of credit/debit cards issued to orregistered in any insured's name;

We will pay for loss sustained by an insured, but not toexceed $1000 per loss, when such insured:

e. weight of rain or snow which collects on a roof; orf. use of defective material or methods in construction,reconstruction, renovation or remodeling if the collapseoccurs during the course of the construction,reconstruction, renovation or remodeling.

2. Credit/Debit Card, Forgery and Counterfeit Money.a.(1)

(2) suffers a loss through forgery or alteration of checks,drafts, certificates of deposit and notes includingnegotiable orders of withdrawal; or(3) accepts in good faith counterfeit United States orCanadian paper currency.b. (1)(2)(3)(4)

All loss, whether the result of a single act or a series of acts,committed by any one person or any one person in conjunctionwith other persons, shall be considered one loss.This coverage is additional insurance.No deductible applies to this coverage.3.

the tree damages a covered building;b.this coverage is not provided elsewhere in this policy.

a.b.

a.b. remove, restore, replace or dispose of polluted land, groundwater or underground resources;c.

d. remove or dispose of covered property that has pollutedland, water, ground or underground resources;

a.

c.

e.

4.

5.

This coverage is additional insurance.No deductible applies to this coverage.6.

This coverage is additional insurance.7.

*When the rounded amount for Coverage B does not equal theminimum required, the Coverage B amount will then berounded up to the next $100.8.

In the event of an assessment, this coverage is subject to allother terms of this policy. This coverage is excess insuranceover any insurance collectible under any policy or policiescovering the association of property owners.

remove or dispose of ash, dust, particulate matter or lavaflow from outside of a dwelling; ortest for, monitor, clean up, remove, contain, treat, detoxify,neutralize or dispose of pollutants;f.

whether or not such actions are done voluntarily or at thedirection or request of any governmental body, agency or otherjurisdiction.Coverage for items a, b, d, e and f will apply only as providedin Supplementary Coverages - Section I, under PollutantCleanup and Removal.

Fire Department Service Charge. We will pay up to anaggregate limit of $500 for any one loss for Fire DepartmentService Charges billed by a government entity or firedepartment for the response to save or protect covered propertyon the insured premises from a Peril Insured Against.

Loss to an awning, fence, patio, pavement, swimming pool,underground pipe, flue, drain, cesspool, septic tank, foundation,retaining wall, bulkhead, pier, wharf, dock, outdoor equipmentor a structure that is not a building is not included under itemsb, c, d, e and f unless the loss is a direct result of the collapseof a building.

Loss Assessments. We will cover an amount up to $1000 foryour share of special loss assessments charged during thepolicy period and levied against you by a corporation orassociation of property owners in accordance with thegoverning rules of the association. This $1000 limit is the mostwe will pay for any one loss, regardless of the number ofassessments. This coverage only applies when the assessmentis made as a result of direct loss to the property, owned by allmembers collectively, caused by a Peril Insured Against underSection I of this policy.

HO-3 (NV) Ed. 6/94

Vandalism or Malicious Mischief or breakage of glass andsafety glazing if the dwelling has been vacant for more than 30consecutive days immediately before the loss. A dwelling underconstruction is not considered vacant.

Stock No. 16985

an outdoor swimming pool, outdoor sauna, outdoorwhirlpool or hot tub, including filters, pipes, pumps andother related equipment.

a fence, pavement, patio, foundation, retaining wall,bulkhead, pier, wharf or dock; or

Continuous or Repeated Seepage or leakage of water orsteam from within a plumbing, heating, air-conditioning orautomatic fire protection sprinkler system or from within ahousehold appliance which occurs over a period of weeks,months or years.

Refrigerated Food Products. We will pay for loss to foodproducts in freezer or refrigerator units on the insuredpremises, but not to exceed $250 per loss to each freezer orrefrigerator, when caused by power interruption or mechanicalfailure.

Pollutant Cleanup and Removal. We will pay up to $10,000to cover your expense to extract pollutants, or coveredproperty which becomes a pollutant, from land, water, insuredbuildings or other structures, or your personal property. Suchloss must occur on the insured premises and must be causedby or result from a covered cause of loss under Section I ofthis policy, during the policy period.

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We do not cover loss to the property described in Coverage A -Dwelling and Dwelling Extension resulting directly or indirectly fromor caused by one or more of the following. Such loss is excludedregardless of any other cause or event contributing concurrently orin any sequence to the loss.

Theft in or from a dwelling while under construction, or ofmaterials and supplies for use in the construction, untilcompleted and occupied.Freezing of a plumbing, heating, air-conditioning or automaticfire protection sprinkler system or household appliance, or bydischarge, leakage or overflow from within the system orappliance caused by freezing while the residence is vacant,unoccupied or under construction, unless you have takenprecaution to:

Collapse, other than as provided in Supplementary Coverages -Section I, under Collapse.

We cover risks of accidental direct physical loss to propertydescribed in Coverage A - Dwelling and Dwelling Extension, unlessthe loss is excluded in this policy.

located more than 250 feet from the dwelling on theinsured premises.

We do not cover trees, plants, shrubs or lawns:

Trees, Plants, Shrubs and Lawns. We cover trees, plants,shrubs and lawns on the insured premises. We pay only forloss caused by the following perils: Fire, Lightning, Explosion,Riot, Civil Commotion, Aircraft, Vehicles not owned or operatedby an occupant of the insured premises, Vandalism orMalicious Mischief, Theft or Collapse of a building or any partof a building. The limit for this coverage will not exceed 5% ofthe limit that applies to the dwelling for all trees, plants, shrubsand lawns nor more than $500 for any one tree, plant or shrubincluding the cost of removing the debris of the covered item.

This coverage does not increase the limit applying to thedamaged property.

Protective Repairs. We will pay the reasonable cost you incurfor necessary repairs made to protect covered property fromfurther damage following a covered loss from a peril we insureagainst.

Outdoor Antennas. We will pay up to $1000 for direct loss byPerils Insured Against in Coverage B to outdoor antennas ordish antennas including their lead-in wiring, accessories, mastsand towers.

9.

This coverage is additional insurance.

11.

12.

Power interruption or mechanical failure does not include:a. removal of the plug from an electrical outlet; orb. turning off an electrical switch unless caused by a PerilInsured Against.

No deductible applies to this coverage.The Power Failure exclusion does not apply to this coverage.13.

b.This coverage is additional insurance.

This coverage does not increase the limit applying to theproperty being repaired.

COVERAGE A - DWELLING AND DWELLING EXTENSION

LOSSES NOT COVERED

Losses excluded under EXCLUSIONS - SECTION I.2.3.

a. maintain heat in the building; orb. shut off the water supply and drain the system andappliances of water.5.

a.

1.

4.

6. Other Causes of Loss:a. wear and tear, marring, scratching, deterioration;b. inherent vice, latent or inherent defect, mechanicalbreakdown;c. smog, rust, corrosion, frost, condensation, mold, wet or dryrot;d. smoke from agricultural smudging or industrial operations;e.

7.

8.

a. grown for business purposes; or

10.

settling, cracking, shrinking, bulging, or expansion ofpavements, patios, foundations, walls, floors, roofs orceilings;birds, vermin, rodents, insects or domestic animals.

We do not cover loss to the system or appliance from whichthis water or steam escaped.

f.

Freezing, Thawing, Pressure or Weight of Water or Ice,whether or not driven by wind, to:

b.

However, we do cover any resulting loss to property described inCoverage A - Dwelling and Dwelling Extension from items 2through 8 above, not excluded or excepted in this policy.

If any of these cause water or steam to escape from aplumbing, heating, air-conditioning or automatic fire protectionsprinkler system or household appliance, we cover loss causedby the water or steam. We also cover the cost of tearing outand replacing any part of a building necessary to repair thesystem or appliance.

This coverage is additional insurance.

PERILS INSURED AGAINST - SECTION I

HO-3 (NV) Ed. 6/94

We do not cover loss on the insured premises if the dwellinghas been vacant for more than 30 consecutive daysimmediately before the loss.

theft from premises which are vacant for more than 30consecutive days immediately before the loss;

Vandalism or Malicious Mischief, meaning only willful ormalicious damage to or destruction of property. We do notcover loss to property on the insured premises if the dwellinghas been vacant for more than 30 consecutive daysimmediately before the loss.

Stock No. 16985

theft from the insured premises while the dwelling isunder construction, until the dwelling is completed andoccupied;

Volcanic Eruption other than loss caused by earthquake, landshock waves or tremors.

Property of a student, who is an insured, is coveredwhile at a residence occupied by the student whileaway at school.

any type of watercraft, including their trailers,equipment and accessories, and outboard motors;

any type of watercraft, including their trailers, equipmentand accessories, and outboard motors, unless inside a fullyenclosed building or structure.

caused by or resulting from water which backs up throughsewers or drains or water which enters into and overflowsor accidentally discharges from within a sump pump, sumppump well, sump pump well discharge system or othertype system designed to remove subsurface water which isdrained from the foundation area.

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Falling Objects. We do not cover loss to:

We will also pay for the cost to remove the ash, dust orparticulate matter which has caused direct loss to propertyinside a dwelling.

We do not cover loss on the insured premises while theresidence is vacant, unoccupied or under construction. Thisexclusion does not apply if you have taken precaution to:

on the insured premises caused by accidental discharge oroverflow which occurs away from the insured premises;

Accidental Discharge or Overflow of Water or Steam from aplumbing, heating, air-conditioning or automatic fire protectionsprinkler system or household appliance. (Gutters anddownspouts are not part of a plumbing system.) We do notcover loss:

Sudden and Accidental Tearing Apart, Burning, Bursting orBulging of a heating, air-conditioning or automatic fireprotection sprinkler system or a water heater. We do not coverloss:

Weight of Ice, Snow or Sleet. We do not cover loss toproperty outside of a building.

Breakage of Glass, meaning damage to personal propertycaused by breakage of glass which is a part of any building onthe insured premises, but excluding loss or damage to theglass.

We do not cover:

Theft, including damage from attempted theft, and loss ofproperty from a known place only when it is likely that a theftoccurred.

Smoke, if the loss is sudden and accidental. We do not coverloss caused by smoke from agricultural smudging or industrialoperations.

Aircraft, including self-propelled missiles and spacecraft.

Windstorm or Hail. We do not cover loss to:

We cover risks of accidental direct physical loss to propertydescribed in Coverage B - Personal Property when caused by aperil listed below, unless the loss is excluded in this policy.

COVERAGE B - PERSONAL PROPERTY

Fire or Lightning.

a.

3. Explosion.4. Riot or Civil Commotion.

Vehicles.7.

8.

the property inside a building caused by rain, snow, sleet,sand or dust unless the direct force of wind or haildamages the building causing an opening in a roof or walland the rain, snow, sleet, sand or dust enters through thisopening; orb.

5.6.

1.2.

9.

a.

10.

11. a. the property inside a building, unless the falling object firstdamages the outside of the building;b. outdoor equipment and yard fixtures not permanentlyinstalled; orthe object which falls.12.

13.

a. caused by continuous or repeated seepage or leakagewhich occurs over a period of weeks, months or years; orb. caused by or resulting from freezing.14.

a. caused by continuous or repeated seepage or leakagewhich occurs over a period of weeks, months or years;b. caused by or resulting from freezing;c.d. to the system or appliance from which the water or steamescaped; ore.

15.

a. maintain heat in the building; orb. shut off the water supply and drain the system andappliances of water.Sudden and Accidental Damage from Artificially GeneratedElectrical Currents.

17.

All eruptions that occur within a 72-hour period will beconsidered as one volcanic eruption.

c.

16.

theft committed by any insured or by any other personregularly residing on the insured premises;(1)(2)

loss of a precious or semi-precious stone from itssetting;(3)theft from that part of the insured premises whilerented by you to other than an insured;(4)

(5)loss of personal property obtained voluntarily from anyinsured by swindling, fraud, trick or false pretense; or(6)loss resulting from the theft of any credit/debit card orsimilar device except as provided under SupplementaryCoverages.

(7)

We do not cover theft occurring away from the insuredpremises of:b.

Freezing of a plumbing, heating, air-conditioning or automaticfire protection sprinkler system or household appliance.

(1)trailers, campers and camper bodies; or(2) other property while on the part of any other residentialtype premises owned, rented, used or occupied by anyinsured, except while an insured is living theretemporarily.

(3)

HO-3 (NV) Ed. 6/94

Appraisal. If you and we fail to agree on the amount of loss,either may demand an appraisal of the loss. In this event, eachparty will choose a competent and disinterested appraiserwithin 20 days after receiving a written request from the other.The two appraisers will choose a competent and disinterestedumpire. If they cannot agree upon an umpire within 15 days,you or we may request that the choice be made by a judge of

Stock No. 16985

Pollution, meaning any actual, alleged or threatened discharge,dispersal, release, escape, seepage, trespass, wrongful entry ormigration of pollutants from any source.

9.

water from any source which backs up through sewers ordrains, or water which enters into and overflows oraccidentally discharges from within a sump pump, sumppump well, sump pump well discharge system or othertype system designed to remove subsurface water which isdrained from the foundation area; or

8.

Weather Conditions which contribute in any way with a causeor event excluded in Part A above to produce the loss.

b.a.

c.b.a.

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Abandoned Property. You may not abandon property to usunless we specifically agree to it.

However, we do cover any resulting loss to property described inCoverage A - Dwelling and Dwelling Extension not excluded orexcepted in this policy.

of part or all of the insured premises or any other property.

Planning, Construction or Maintenance, meaning faulty,inadequate or defective:

Acts or Decisions, including the failure to act or decide, of anyperson, group, organization or governmental body.

The following exclusions apply to Coverage A - Dwelling andDwelling Extension. We do not insure for loss caused by any of thefollowing.

flood, surface water, waves, tidal water or overflow of abody of water, from any cause. We do not cover sprayfrom any of these, whether or not driven by wind;

Water Damage, meaning:

War (declared or undeclared), civil war, insurrection, rebellion,revolution or discharge of a nuclear weapon or device, even ifaccidental.

We do cover loss caused by actions of civil authorities toprevent the spread of a fire caused by an insured peril.

Ordinance, Law or Regulation, meaning enforcement of anyordinance, law or regulation which regulates the construction,repair or demolition of a building or other structure, unlessspecifically provided under this policy. This includes, but is notlimited to the removal and disposal of damaged or undamagedproperty which results from such enforcement.

Nuclear Hazard, meaning nuclear reaction, radiation,radioactive contamination or any consequence of any of these.Loss caused by nuclear hazard is not considered loss by perilsof Fire, Explosion or Smoke. Direct loss by fire resulting fromnuclear hazard is covered.

Neglect of any insured to use all reasonable means to protectcovered property at and after the time of loss.

by or at the direction of any insured; andIntentional Loss, meaning any loss or damage arising out ofany act committed:

We do cover only direct resulting loss when caused by:

Earth Movement, meaning any loss caused by, resulting from,contributed to or aggravated by earthquake; landslide;subsidence; sinkhole; erosion; mudflow; earth sinking, rising,shifting, expanding or contracting; volcanic eruption, meaningthe eruption, explosion or effusion of a volcano.

The following exclusions apply to Coverage A - Dwelling andDwelling Extension, Coverage B - Personal Property, Coverage C -Loss of Use and the Supplementary Coverages - Section I. We donot insure for loss caused directly or indirectly by any of thefollowing. Such loss is excluded regardless of any other cause orevent contributing concurrently or in any sequence to the loss.1.

This exclusion applies whether or not the earth movement iscombined with water or rain.fire;explosion other than the explosion of a volcano; orif an insured peril, breakage of glass or safety glazingmaterial which is a part of a building.

2.

with the intent to cause a loss.3.4.

5.

6.

a.

b.

The following exclusion applies to Coverage A - Dwelling andDwelling Extension, Coverage B - Personal Property, Coverage C -Loss of Use and the Supplementary Coverages - Section I.

1.

2.a. construction, reconstruction, repair, remodeling orrenovation;b. materials used in construction, reconstruction, repair,remodeling or renovation;c. design, workmanship or specifications;d. siting, surveying, zoning, planning, development, grading orcompaction; ore. maintenance;

3.

The following conditions apply to all of Section I of this policy.1.

EXCLUSIONS - SECTION IPART A

PART B

PART C

CONDITIONS - SECTION I

regardless of its source, water below the surface of theground. This includes water which exerts pressure on orflows, seeps or leaks through any part of a building or otherstructure, sidewalk, driveway or swimming pool.

c.

We do cover direct loss that follows, caused by Fire orExplosion.

Power Failure, meaning the failure of power or other utilityservice if the failure takes place away from the insuredpremises. If a Peril Insured Against ensues on the insuredpremises, we will pay only for loss caused by that peril.

7.

Fraud. We will not provide coverage for all or any part of a lossif, before or after the loss, any insured has committed fraud.Fraud means any concealment, misrepresentation or attempt todefraud by any insured either in causing any loss or inpresenting any claim under this policy.

1.

a court of record in the state where the insured premises islocated. The appraisers will separately set the amount of loss. Ifthe appraisers submit a written report of an agreement to us,the amount agreed upon will be the amount of loss. If they failto agree within a reasonable time, they will submit theirdifferences to the umpire. Written agreement signed by anytwo of these three will set the amount of the loss. Eachappraiser will be paid by the party selecting that appraiser.Other expenses of the appraisal and the compensation of theumpire will be paid equally by you and us.

2.

HO-3 (NV) Ed. 6/94

there is a filing of an appraisal award with us.

Loss Payment. We will adjust all losses with you. We will payyou unless some other party is named in the policy or islegally entitled to receive payment. Loss will be payable 60days after we receive your properly completed proof of lossand:

Stock No. 16985

We will pay the smaller of:the actual cash value at the time of loss but notmore than the cost to repair or replace thedamaged property with property of like kind andquality; or

property under Coverage B - Personal Property;

To determine the full replacement cost of thecovered building immediately prior to the loss:

Procedures to Claim Replacement Coverage.

If at the time of loss, the building is not repaired orreplaced, we will pay the actual cash value at the timeof loss of that part of the building damaged up to thelimit applying to the building, but not exceeding thereplacement cost of the damaged building.

Loss Payable Clause. Loss will be adjusted only with theinsured named and payable to the insured and the lienholdershown in the Declarations as their respective interests mayappear, subject to all the terms of this policy.

Page 8 of 16

Insurable Interest and Our Liability. In the event of a coveredloss, we will not pay for more than the insurable interest aninsured has in the covered property, nor more than theamount of coverage afforded by this policy in any one loss.

notifies us of any change in ownership, occupancy orsubstantial change in risk of which the mortgagee is aware;

If a mortgagee is named in this policy, any loss payable onbuildings will be paid to the mortgagee and you, as interestsappear. If more than one mortgagee is named, the order ofpayment will be the same as the order of precedence of themortgages. If we deny your claim, that denial will not apply toa valid claim of the mortgagee, if the mortgagee:

you notify us within 180 days after the loss of yourdecision to repair or replace the damaged or stolenproperty; and

If you receive an actual cash value settlement for damagedor stolen property covered by replacement coverage andyou have not reached your limit, you may make a furtherclaim under this condition for any additional payment on areplacement cost basis provided:

If at the time of loss, the amount of insurance inthis policy on the damaged building is less than80% of the full replacement cost of the buildingimmediately prior to the loss, and the building isrepaired or replaced, we will pay the larger of thefollowing amounts, but not exceeding the limitunder this policy applying to the building:

the limit in this policy for the building,including any additional amount of insurance asprovided by the Inflation Protection Coverage;

If at the time of loss, the amount of insurance inthis policy on the damaged building is 80% or moreof the full replacement cost of the buildingimmediately prior to the loss, and the building isrepaired or replaced, we will pay the full cost torepair or replace the damaged building withoutdeducting for depreciation, but not exceeding thesmallest of:

any policy limit which applies.

Loss to a Pair or Set. We may repair or replace any part ofthe pair or set to restore it to its value before the loss, or wemay pay the difference between the actual cash value of theproperty before and after the loss.

we reach agreement with you;

Loss Deductible. We will pay only that part of a covered lossover any deductible which applies.

Glass or Safety Glazing Replacement. Damage to glasscaused by a Peril Insured Against will be settled on the basis ofreplacement with safety glazing when required by law.

Dwellings Under Construction. This policy may cover adwelling under construction. If so, until the dwelling iscompleted and occupied, the limit will be determined by theactual value of the dwelling at the time of loss, but not greaterthan the limit shown in the Declarations.

Contract of Sale Clause. If a contract for sale of the propertydescribed in this policy has been made between the insuredand the titleholder shown in the Declarations, the interest ofthe titleholder is also covered, but without any increase in thelimit, and subject to all other terms of this policy, includingany mortgage clause forming a part of this policy. If there isother insurance on the property described, we will not be liablefor a greater part of any loss than the amount covered bears tothe whole amount of insurance on the property, whethercollectible or not.

3.

4.

5.

6.

7.

8.

9.

a.b. there is an entry of a final judgment; orc.

10.

11. Loss Value Determination.a. Personal Property, Structures, Awnings, Carpeting,Household Appliances and Outdoor Antennas.(1) Loss to covered:(a) awnings;(b) carpeting;(c) household appliances;(d) outdoor antennas and outdoor equipment, whetheror not attached to buildings;(e) other structures covered under the DwellingExtension that are not buildings and buildingswithout a permanent foundation;(f)

(a)

(b)b. Buildings Which Have a Permanent Foundation and

Roof.

Buildings which have a permanent foundation and roof willbe settled at replacement cost without deduction fordepreciation, subject to the following:(1) Actual Cash Value.

(2) Replacement Cost.(a)

i.

ii. the cost to replace the damaged building withlike construction for similar use on the samepremises; oriii. the amount actually and necessarily spent forrepair or replacement of the damaged building.(b)

i. the actual cash value of that part of the buildingdamaged; orthe amount of insurance on the building dividedby 80% of its full replacement cost times theamount of the loss.(c)i. where there is a basement, do not include thevalue of excavations, foundations, piers andother supports which are below any basementfloor nor underground pipes, wiring and drains;orii. where there is no basement, do not include thevalue of underground pipes, wiring and drains.c.

(2) repair or replacement is completed within one year ofthe date of loss.12. Mortgage Clause.The word "mortgagee" includes trustee or contract of saletitleholder.

a.

(1)

ii.

will be settled subject to the following:

HO-3 (NV) Ed. 6/94 Stock No. 16985

What You Must Do in Case of Loss. In the event of a loss toproperty that this insurance may cover, you and any personclaiming coverage under this policy must:

let us record your statements and submit toexaminations under oath by any person named by us,while not in the presence of any other insured, andsign the transcript of the statements and examinations;

show us the damaged property before permanentrepairs or replacement is made;

Page 9 of 16

receipts for any increased costs to maintain yourstandard of living while you reside elsewhere, andrecords pertaining to any loss of rental income; and

OUR OBLIGATION TO DEFEND ANY CLAIM OR SUIT ENDS WHENTHE AMOUNT WE HAVE OFFERED OR PAID FOR DAMAGESRESULTING FROM THE OCCURRENCE EQUALS OUR LIMIT.

to a person on the insured premises with the permission ofany insured; or

We will pay the medical expenses which are incurred or medicallyascertained within three years from the date of an accident causingbodily injury covered by this policy. This coverage applies only:If a suit is brought against any insured for damages because ofbodily injury or property damage caused by an occurrence towhich this policy applies, we will provide a defense at our expenseby counsel of our choice. We will defend any suit or settle anyclaim for damages payable under this policy as we think proper.

We will pay, up to our limit, compensatory damages for which anyinsured is legally liable because of bodily injury or propertydamage caused by an occurrence covered by this policy.

evidence supporting a claim under the Credit/DebitCard, Forgery and Counterfeit Money protection. Thisshould state the cause and amount of loss.

the plans and specifications of any damaged dwellingor structure we may request;

the interest you and others have in the property,including any encumbrances;

submit to us, within 60 days after we request, your signed,sworn proof of loss which sets forth, to the best of yourknowledge and belief:

provide us with records and documents we request andpermit us to make copies; and

as often as we reasonably require:

promptly separate the damaged and undamaged personalproperty.

give notice as soon as reasonably possible to us or ouragent. Report any theft to the police immediately. If theloss involves a credit/debit card, written notice must alsobe given to the company that issued the card;

Suit Against Us. No action can be brought unless it is startedwithin one year after the date of loss.

Recovered Property. If you or we recover any property forwhich we have made payment under this policy, you or we willnotify the other of the recovery. At your option, the property

Permission Granted to You. You may make alterations,additions and repairs to your building and complete structuresunder construction. The insured premises may be vacant orunoccupied without limit of time, except where this policyspecifies otherwise. A dwelling under construction is notconsidered vacant.

If we give you notice within 30 days after we receive anacceptable proof of loss, we may repair or replace any part ofthe damaged property with like property.

We may take the salvage of all or any part of the coveredproperty at its agreed or appraised value. Property paid for orreplaced by us becomes ours, if we choose.

In the event of a covered loss, we have the option to:15. Our Settlement Options.a. make a cash settlement for all or part of the damaged,destroyed or stolen property; orb. pay the cost to repair, rebuild or replace all or thenecessary part(s) of the damaged, destroyed or stolenproperty with like property, as of the time of loss, less anallowance for depreciation when replacement cost coveragedoesn't apply.

16.

18.

19.

a.

protect the property from further damage, make reasonableand necessary repairs to protect the property and keeprecords of the cost of these repairs;c.

(1)(2)(3)

e.

(1) the date, time, location and cause of loss;(2)(3) the actual cash value and amount of loss of each itemdamaged or destroyed;other insurance that may cover the loss;changes in title, use, occupancy or possession of theproperty during the policy period;(6)(7) detailed estimates for repair of the damage;

(9)

Give us a detailed list of the damaged property, showingthe quantities, when and where acquired, original cost,current value and the amount of loss claimed;d.

will be returned to or retained by you or it will become ourproperty. If the recovered property is returned to or retainedby you, the claim payment, or any lesser amount to which weagree, must be refunded to us.

(4)(5)

(8)

COVERAGE D - PERSONAL LIABILITY COVERAGE

Defense Provision. COVERAGE E - MEDICAL EXPENSE COVERAGE

1.

LIABILITY COVERAGES - SECTION II

b.

17.

pays any premium due under this policy on demand if youhave neglected to pay the premium; andb.submits a signed, sworn statement of loss within 60 daysafter receiving notice from us of your failure to do so.c.

As to only the interest of a lienholder or mortgagee declared inthis policy, this insurance will terminate only if we give suchlienholder or mortgagee at least 10 days written notice oftermination. If we pay the mortgagee for any loss and denypayment to you:we are subrogated to all the rights of the mortgageegranted under the mortgage on the property; ora.at our option, we may pay to the mortgagee the wholeprincipal on the mortgage plus any accrued interest. In thisevent, we will receive a full assignment and transfer of themortgage and all securities held as collateral to themortgage debt.

b.

Subrogation will not impair the right of the mortgagee torecover the full amount of the mortgagee's claim.No Benefit to Bailee. This insurance will not, in any way,benefit any person or organization who may be caring for orhandling property for a fee.

13.

Other Insurance. If both this and other insurance apply to aloss, we will pay our share. Our share will be the proportionateamount that this insurance bears to the total amount of allapplicable insurance.

14.

HO-3 (NV) Ed. 6/94 Stock No. 16985

to property, other than a rented golf cart, owned by orrented to any insured, a tenant of any insured or aresident in your household; or

sexual molestation or contact;

Page 10 of 16

reasonable expenses (other than loss of earnings) anyinsured incurs at our request;

caused intentionally by any insured who has attained theage of 13;

We will not pay for property damage:

This $1000 limit is the most we will pay for any one loss,regardless of the number of assessments.

business pursuits;

Acts or Omissions. We will not cover bodily injury orproperty damage arising out of any act or omission of anyinsured as an officer or member of the board of directors ofany corporation, municipality, political unit or other

Abuse. We will not cover bodily injury or property damagearising out of or resulting from any actual or alleged:

Emergency First Aid. We will pay reasonable expensesincurred by any insured for first aid to persons, other thaninsureds, at the time of the accident, for bodily harm coveredunder this policy.

At our option, we will either:

any insured's loss of earnings (but not loss of otherincome) up to $200 per day, to attend trials or hearings atour request;

all expenses we incur and costs taxed against any insured;

Claim and Defense Expenses. We will pay the expensesdescribed below for a claim or suit we are obligated to defendunder the Personal Liability Coverage:

2.

1.

a.

d.

e.

2.

a. pay the actual cash value of the property; orrepair or replace the property with other property of likekind and quality.to the extent of any amount recoverable under Section I ofthis policy;a.

b.

d. resulting from:(1)(2)

(3) the ownership, maintenance or use of a land motorvehicle, aircraft, watercraft or iceboat.3.

a.b. damages which the association may be obligated to paybecause of any personal injury arising out of:(1) false arrest, detention or imprisonment;(2) malicious prosecution;(3) libel, slander, humiliation or defamation of character;(4) invasion of privacy, wrongful eviction or wrongful entry.

Section II - Coverage D - Personal Liability Exclusion 2 doesnot apply to this coverage.c.

a.b. corporal punishment; orc. physical or mental abuse of a person.2.

3. Aircraft.a.

SUPPLEMENTARY COVERAGES - SECTION II

EXCLUSIONS - SECTION II

c.4.

is caused by a person while performing duties as adomestic employee of any insured;c.is caused by an animal owned by or in the care of anyinsured; ord.is suffered by a domestic employee in the course ofemployment by any insured.e.is caused by the activities of any insured;

arises out of a condition on the insured premises or theways immediately adjoining;a.b.

1.organization, except the acts of an unpaid volunteer director,officer or trustee of a religious, charitable or civic non-profitorganization. An elected, public official does not qualify as anunpaid volunteer director, officer or trustee.

This coverage applies only to loss assessments charged againstyou as owner or tenant of the insured premises.

any act or omission in connection with premisesowned, rented or controlled by any insured, other thanan insured premises; or

We do not cover loss assessments charged against you or acorporation or association of property owners by anygovernmental body.

Coverage D - Personal Liability and Coverage E - MedicalExpense do not apply to:

to a person away from the insured premises if the bodilyinjury:

We will pay the following in addition to the limits. All terms of thispolicy remain unchanged, except where modified by theSupplementary Coverage.

f.

In the event of an assessment, this coverage is subject to allother terms of this policy. This coverage is excess insuranceover any insurance collectible under any policy or policiescovering the association of property owners.

Loss Assessments. We will cover an amount up to $1000 foryour share of special loss assessments charged during thepolicy period and levied against you by a corporation orassociation of property owners in accordance with thegoverning rules of the association, when the assessment ismade as a result of:each occurrence to which Section II of this policy wouldapply; or

prejudgment interest awarded against any insured on thepart of the judgment that we are obligated to pay. However,we will not pay any such interest which accrues aftersuch time that we make an offer to pay our limit;interest accruing on our share of the amount of anyjudgment between the time the judgment is entered andthe time we pay or tender or deposit in court that part ofthe judgment which does not exceed our limit.

premiums on bonds required in any suit we defend, but notfor bond amounts more than our limit. We need not applyfor or furnish any bond;

Damage to Property of Others. We will pay up to $500 peroccurrence for property damage to property of others causedby any insured, even if not negligent or legally liable.

We will not cover bodily injury or property damagearising out of the ownership, supervision, entrustment,maintenance, operation, use, loading or unloading of anytype of aircraft, glider, balloon, parachute or other airconveyance and their facilities. We do cover model aircraftnot used or designed for transporting cargo or persons.

b.

b.

HO-3 (NV) Ed. 6/94 Stock No. 16985

used for the service of the insured residence;

We will not pay for any loss, cost, expense, fine or penalty totest for, monitor, clean up, remove, contain, treat, detoxify,neutralize or dispose of pollutants, whether or not such actionsare done voluntarily or at the direction, request or demand ofany governmental body or agency, any other authority, personor organization, or as a result of any suit.

Pollution Damage. We will not cover bodily injury or propertydamage arising out of the actual, alleged or threateneddischarge, dispersal, release, escape, seepage, trespass,wrongful entry, migration, ingestion, inhalation or absorption ofpollutants from any source.

Controlled Substances. We will not cover bodily injury orproperty damage arising out of the use, sale, manufacture,delivery, transfer, possession or administration of a controlledsubstance(s) as defined by 21 U.S.C.A. Sections 811 and 812.Controlled substances include but are not limited to cocaine,LSD, marijuana and all narcotic drugs. However, this exclusiondoes not apply to the legitimate use of prescription drugs by aperson following the orders of a licensed physician.

Page 11 of 16

kept in dead storage on the insured premises;

We will provide specific coverage on only the followingtypes owned or operated by or rented or loaned to anyinsured:

Professional Liability. We will not cover bodily injury orproperty damage arising out of the rendering or failing torender professional services.

This exclusion does not apply to bodily injury to any domesticemployee arising out of and in the course of employment byany insured.

Premises Owned, Rented or Controlled. We will not coverbodily injury or property damage arising out of any act oromission occurring on or in connection with any premisesowned, rented or controlled by any insured other than aninsured premises.

Nuclear Energy. We will not cover a nuclear energyoccurrence for which any insured under this policy:would be an insured under that policy but for theexhaustion of its limit.is also an insured under a nuclear energy liability policy; or

Intra-insured Suits. We will not cover bodily injury to anyinsured.

Illegal Consumption of Alcohol. We will not cover bodilyinjury or property damage arising out of the insured'sknowingly permitting or failing to take action to prevent theillegal consumption of alcohol beverages by an underageperson.

Employees. We will not cover bodily injury to any employee(other than a domestic employee) of any insured arising outof and in the course of their employment by any insured.

4.

6.

7.

12.a.

A nuclear energy liability policy is one issued by:a. American Nuclear Insurers;b. Mutual Atomic Energy Liability Underwriters;c. Nuclear Insurance Association of Canada;or any of their successors.13.

14.

15.

16. Vehicles.

(1) a motor vehicle or motorized land conveyance which isnot subject to motor vehicle registration and is:(a)(b) designed to assist the handicapped; or(c)(2) a motorized golf cart while used for golfing purposes ona golf course;(3)

8.

10.

11.

9. Imputed Liability. We will not cover bodily injury or propertydamage arising out of any liability imputed to any insuredwhich is otherwise excluded in this policy.

Business. We will not cover bodily injury or property damagearising out of business pursuits or the rental or holding forrental of any part of any premises except:a. activities which are normally considered non-business;b. the rental or holding for rental of an insured premise:on an occasional basis if used only as a residence;(2)(1)

the occasional or part-time business activities of anyself-employed insured under 19 years of age.d.

the additional premises of a one or two family dwellingwhen specifically insured under Option 7 - AdditionalPremises Coverage; or

in part, as an office, school, studio or private garage;c. (3)

This exclusion does not apply to bodily injury to any domesticemployee arising out of and in the course of employment byany insured.Communicable Disease. We will not cover bodily injuryarising out of the actual or alleged transmission of acommunicable disease.

5.

b.

a motorized land conveyance including a motorizedbicycle, tricycle or similar type of equipment designedprincipally for recreational use off public roads, which isnot subject to motor vehicle registration and is:(a) not owned or leased by an insured; orowned or leased by an insured and while on theinsured premises;(b)

We will not cover bodily injury or property damagearising out of the ownership, supervision, entrustment,maintenance, operation, use, loading or unloading of anytype of motor vehicle, motorized land conveyance or trailer,except:

a.

in part, for use only as a residence, unless a singlefamily unit is intended for use by the occupying familyto lodge more than two roomers or boarders; or

We will not cover bodily injury or property damagearising out of any vicarious parental liability, whether ornot statutorily imposed by law, for the actions of a child orminor regarding any type of vehicle described in a. above.

This exclusion does not apply to bodily injury to anydomestic employee arising out of and in the course ofemployment by any insured.

a trailer of the boat, camp, home or utility type whennot attached to or towed by or carried on a motorvehicle or motorized land conveyance.(4)

b.

b.

This exclusion does not apply to bodily injury to anydomestic employee arising out of and in the course ofemployment by any insured.We will not cover bodily injury or property damagearising out of any vicarious parental liability, whether ornot statutorily imposed by law, for the actions of a child orminor regarding any type of aircraft described in a. above.

Intentional Injury. We will not cover bodily injury or propertydamage caused intentionally by or at the direction of anyinsured even if the actual bodily injury or property damageis different than that which was expected or intended from thestandpoint of any insured.

HO-3 (NV) Ed. 6/94 Stock No. 16985

War. We will not cover any occurrence due to:

property owned by a corporation or association of propertyowners of which any insured is a member.We will, if any insured is legally obligated, pay for propertydamage to item b above caused by fire, smoke or explosion.

Page 12 of 16

Bankruptcy of any Insured. Bankruptcy or insolvency of anyinsured will not relieve us of our obligations under this policy.

Residents. We will not cover bodily injury to any insured orother person, other than a domestic employee, regularlyresiding on any part of the insured premises.

Property Owned or Controlled. We will not cover propertydamage to:

No Admission of Liability With Medical Expense Coverage.Payment under this coverage is not an admission of liabilityby any insured or us.

Domestic Employees. We will not cover bodily injury to adomestic employee if it occurs off the insured premises anddoes not arise out of or in the course of the domesticemployee's employment by any insured.

Coverage E - Medical Expense does not apply to:

Punitive Damages. We will not cover punitive or exemplarydamages.

property borrowed, used or occupied by, rented to, or inthe care of any insured; orproperty owned by any insured;

in which the insured assumes the liability of others prior tothe occurrence.

directly relating to the ownership, maintenance or use ofthe insured premises not excluded in 2 below orelsewhere in this policy; or

Contractual Liability. We will not cover personal liabilityunder any contract or agreement.

Coverage D - Personal Liability does not apply to:

Workers Compensation. We will not cover any obligation ofthe insured under a workers compensation, disability benefits,unemployment compensation law or any other similar law.

This exclusion does not apply while such crafts are storedon the insured premises nor to bodily injury to anydomestic employee arising out of and in the course ofemployment by any insured.

powered by one or more outboard motors with morethan 50 total horsepower, owned by any insured.

that is a sailing vessel, with or without auxiliary power,26 feet or more in length owned by or rented to anyinsured;

with inboard or inboard-outdrive motor power of morethan 50 horsepower rented to any insured;

with inboard or inboard-outdrive motor power ownedby any insured;

We will not cover bodily injury or property damagearising out of the ownership, supervision, entrustment,maintenance, operation, use, loading or unloading of awatercraft:

Violation of Law. We will not cover bodily injury or propertydamage arising out of:

violation of any criminal law for which any insured is notconvicted due to mental incapacity.

violation of any building or housing code for which anyinsured is convicted; or

violation of any criminal law for which any insured isconvicted;

c.

18. a. war, including undeclared war;b. civil war, insurrection, rebellion or revolution; orc. warlike act by a military force or military personnel,destruction or seizure or use for a military purpose;and including any consequence of any of these.Discharge of a nuclear weapon will be deemed a warlike acteven if accidental.19. Watercraft.a.

(1)(2)(3)

(4) that is an iceboat, airboat, air cushion or similar type ofcraft; or(5)

17.

b.

1.This exclusion does not apply to written contracts:a.

b.

2.

3.a.b.

2.

3.

The following conditions apply to all of Section II of this policy.1.

2.

3.

CONDITIONS - SECTION II

a.b.

20.

c.

4.

1.

All bodily injury and property damage resulting from any oneaccident or from continuous or repeated exposure tosubstantially the same general harmful conditions will beconsidered to be the result of one occurrence.Our total liability under Coverage E for all medical expensespayable for bodily injury to one person as the result of oneaccident will not exceed the Coverage E limit stated in theDeclarations.

Severability of Insurance. This insurance applies separately toeach insured. This condition will not increase our limit for anyone occurrence.

Other Insurance - Coverage D - Personal Liability. Thisinsurance is excess over any other collectible insurance.However, if the other insurance is specifically written as excessinsurance over this policy, the limits of this policy apply first.

4.

5.

Nuclear Hazard. We will not cover bodily injury from anynuclear reaction, radiation or radioactive contamination, allwhether controlled or uncontrolled or however caused, or anyconsequence of any of these.We will not cover bodily injury or property damagearising out of any vicarious parental liability, whether or notstatutorily imposed by law, for the actions of a child orminor regarding any type of watercraft described in a.above.

Loss Assessments. We will not cover personal liability for yourshare of any loss assessment charged against all members ofa corporation or association of property owners other than asprovided by Supplementary Coverages - Section II, under LossAssessments.

Limit of Liability. Regardless of the number of insureds,claims made or persons injured, our total liability underCoverage D - Personal Liability for all damages resulting fromany one occurrence will not exceed the Coverage D - PersonalLiability limit stated in the Declarations.

Concealment or Fraud. With respect to all insureds, we willnot provide coverage if, before or after a loss, any insured has:

Engaged in fraudulent conduct; orIntentionally concealed or misrepresented any material factor circumstance;

HO-3 (NV) Ed. 6/94

This can be done by notifying you at least 30 daysbefore the date cancelation takes effect.

relating to this insurance.Made false statements;c.

With respect to a policy written for a period of morethan one year or for an indefinite term: In addition toour right to cancel as provided in b(1), b(2) and b(3),we may cancel for any reason at anniversary bynotifying you at least 30 days before the datecancelation takes effect.

When this policy has been in effect for less than 70days and is not a renewal with us, we may cancel forany reason other than nonpayment by notifying you atleast 10 days before the date cancelation takes effect.

We may cancel this policy by notifying you in writing of thedate cancelation takes effect and the reasons forcancelation. The delivery of this cancelation notice will besubject to the laws of the state of Nevada.

Stock No. 16985

When you have not paid the premium, whether payableto us or to our agent or under any finance or creditplan, we may cancel at any time by notifying you atleast 10 days before the date cancelation takes effect.

Conformity to State Law. If any part of this policy is contraryto a law of the state in which the described property is located,we agree to alter that part of our policy and make it conformwith that state law. However, all other parts of this policy willremain in force and unaltered.

You may cancel this policy at any time by returning it to usor advising us of the current or future date when it shouldbe canceled.

as often as we reasonably require, let us record yourstatements and submit to examinations under oath byany person named by us, while not in the presence ofany insured, and sign the transcript of the statementsand examinations;

What You Must Do in Case of Loss. In the event of anaccident or occurrence which this insurance may cover, youand any person claiming coverage under this policy must:

Page 13 of 16

Cancelation by us may only be for the following reasons:

permit doctors we select to examine the injured personwhen we may reasonably require.

authorize us to obtain copies of medical reports andrecords; and

give us prompt written proof of claim, under oath ifrequired;

not voluntarily make any payment, nor assume anyobligation or incur expenses except for Emergency FirstAid, except at your own cost.the time, place and circumstances of the accident oroccurrence;the identity of the policy and insured;

give prompt notice to us or our agent, including:

Assignment. Assignment of this policy will not be valid unlesswe give our written consent.

7.

a. (1)(2)(3) names and addresses of any claimants and witnesses;and(4)

(3)

Under Coverage E - Medical Expense, the injured person orsomeone acting on their behalf will:a.b.c.

Unless otherwise noted, the following conditions apply to allsections of this policy.

2. Cancelation.

b.

(1)

(2)

(4)

1.

a.

Inspection. We are permitted but not obligated to inspect yourproperty and operations. Our inspection or any resultingadvice or report does not warrant that your property oroperations are safe or healthful or are in compliance with anylaw, rule or regulation.

Cooperation. You must cooperate with us in performing allacts required by this policy.

4.

5.6.

When this policy is canceled, the premium for the periodfrom the date of cancelation to the expiration date will berefunded pro rata.c.

any matter relating to a claim or suit;

e.

under the Damage to Property of Others coverage, give usa sworn statement of the loss. This must be made within60 days after our request. Also, be prepared to show usany damaged property under any insured's control;

d.

at our request, assist us in:c.enforcing any right of contribution or indemnity againstany person or organization who may be liable to anyinsured; and

(2) making settlement;(1)

b. promptly forward to us any notice, demand or legal paperrelating to the accident or occurrence;

until the obligation of any insured has been determined byfinal judgment or by agreement signed by us.

Suit Against Us. No legal action can be brought against us:6.a. unless there has been full compliance with all the terms ofthis policy; andb.No person or organization has the right to join us as a party toany legal action against any insured.

a determination by the commissioner that thecontinuation of the policy would violate, or placethe insurer in violation of, any provision of thecode.

a determination by the commissioner thatcontinuation of the insurer's present volume ofpremiums would jeopardize the insurer's solvency

(f)

(e)

a material change in the nature or extent of therisk, occurring after the first effective date of thecurrent policy, which causes the risk of loss to besubstantially and materially increased beyond thatcontemplated at the time the policy was issued orlast renewed;

(d)

discovery of an act or omission; or a violation ofany condition of the policy, which occurred afterthe first effective date of the current policy andsubstantially and materially increases the hazardinsured against;

discovery of fraud or material misrepresentation inthe obtaining of the policy or in the presentation ofa claim under the policy;

Conviction of the insured of a crime arising out ofacts increasing the hazard insured against;

When this policy has been in effect for 70 days ormore, or at any time if it is a renewal with us, we maycancel for one or more of the following reasons:(a)(b)

(c)

(3) 3.

b.a.

If the return premium is not refunded with the notice ofcancelation or when this policy is returned to us, we willrefund it within a reasonable time after the date cancelationtakes effect.

d.

or be hazardous to the interests of policyholders ofthe insurer, its creditors or the public; or

GENERAL CONDITIONS

We will pay only that part of the covered loss that exceeds thedeductible percentage (shown in the Declarations) that applies tothe total limit applicable to the destroyed or damaged property. Thedeductible is stated as a percentage (%).

HO-3 (NV) Ed. 6/94

Our request for appraisal or examination does not waive ourrights.

14.

13.

The reasons for non-renewal and delivery of this terminationnotice will be subject to the laws of the state of Nevada.

Non-Renewal. We may elect not to renew this policy. We maydo so by delivering to you, or mailing to you at the mailingaddress shown in the Declarations, written notice, including ourreasons for non-renewal, at least 30 days before theexpiration date of this policy.

Stock No. 16985

Waiver or Change of Policy Provisions. You are authorized torequest changes in this policy, on behalf of all insureds, if weagree to those changes. A provision of this policy is waived orchanged only if we put it in writing.

You are responsible for the payment of all premiums and willbe the payee for any return premiums we pay.

12.11.

Option and Endorsement Changes. Any option orendorsement made a part of this policy, whether at the time ofissue or during the policy period, amends the terms of thispolicy. Where the policy terms differ from similar terms in anyoption or endorsement, the terms of that option orendorsement will prevail.

Policy Period, Renewal of Coverage, Premiums andChanges. Insurance begins and ends at 12:01 A.M. StandardTime at the location of the property described and on the datesshown in the Declarations.

Page 14 of 16

Each option you choose and for which you pay an additionalpremium, where applicable, applies only as indicated and will beidentified in the Declarations.

If an assignment is sought, an insured must sign and deliverall related papers and cooperate with us. Our right to recoverwill apply only after you have been fully compensated for theloss.

Subrogation. An insured may waive in writing before a loss allrights of recovery against any person. If not waived, we mayrequire an assignment of rights of recovery for a loss to theextent that payment is made by us.

As to only the interest of a lienholder or mortgagee declared inthis policy, this insurance will terminate only if we give suchlienholder or mortgagee at least 10 days written notice oftermination.

If this policy form or any endorsement attached is revised, wemay substitute or add, at any anniversary date, forms orendorsements which are authorized for use on this policy inaccordance with our manual rules in effect at the time.

Policy Non-Assessable. This policy is non-assessable.

Membership, Voting, Annual Meeting and Participation. Youare a member of the American Family Mutual InsuranceCompany of Madison, Wisconsin, and are entitled to one voteeither in person or by proxy at its meetings. The AnnualMeetings are held at its Home Office in Madison, Wisconsin, onthe first Tuesday of March at 2:00 P.M. Notice printed in thispolicy will be your notification of the time and place. If anydividends are distributed, you will share in them according tolaw and under conditions set by the Board of Directors.

Liberalization Clause. Forms or endorsements may be revisedduring the policy period. If any coverage is broadened underthis policy without additional premium, the broadened coveragewill apply.8.

7.

9.

This policy may be continued for successive policy periods bypayment of the required premium on or before the effectivedate of each renewal period. If the premium is not paid whendue, this policy expires at the end of the last policy period forwhich the premium was paid.

If this policy replaces coverage in other policies terminating at12:00 Noon Standard Time on the inception date of this policy,this policy will be effective at 12:00 Noon Standard Timeinstead of at 12:01 A.M. Standard Time.

Where prohibited by law, subrogation does not apply underSection II to Medical Expense Coverage or Damage to Propertyof Others.

These coverages are subject to all terms of this policy, exceptwhere modified by the option chosen.

The premium for each policy period will be based on ourcurrent manuals. This premium is determined by informationin our possession at the inception of each policy period. Anychanges in this information during that policy period whichwould affect the rating of your policy, will allow us to make anadditional charge or refund on a pro rata basis. If a premiumadjustment is necessary, we will make the adjustment as of theeffective date of the change.

10.

ADDITIONAL PROTECTION YOU MAY BUY

We do not cover any loss caused by any earthquake orvolcanic eruption that occurs before this option is effective, norfor any loss caused by any earthquake or volcanic eruption thatoccurs after this option expires.

The following is the only deductible that applies to each coveredloss caused by earthquake or volcanic eruption:

This coverage does not increase the limits stated in this policy.

One or more earthquake shocks or volcanic eruptions thatoccur within a 168-hour period will be considered a singleearthquake or volcanic eruption.

Additional Conditions

We will cover direct loss caused by earthquake or volcanic eruptionto property described in Section I Coverage A - Dwelling, DwellingExtension and Coverage B - Personal Property and covered by thispolicy. This Volcanic Eruption Coverage replaces any VolcanicEruption peril included in this policy.

OPTION 1 - EARTHQUAKE AND VOLCANIC ERUPTIONCOVERAGE.

1. 1.

2. 2.

Special Exclusions

Special Deductible

This deductible percentage applies separately to the total limit onCoverage A - Dwelling, separately to the total limit on Coverage A- Dwelling Extension, and separately to the total limit on CoverageB - Personal Property. The minimum deductible amount for anyone covered loss under each coverage applicable will be $250.

We do not cover loss resulting directly or indirectly from floodof any nature or tidal wave, whether caused by, resulting from,contributed to or aggravated by earthquake or volcanic eruption.

HO-3 (NV) Ed. 6/94 Stock No. 16985

The Section II Coverages are extended to cover the businesspursuits of an insured who is a clerical office employee,salesperson, collector, messenger or teacher as described in theDeclarations or Additional Protection Schedule Endorsement. Thiscoverage does not apply:

This option applies only with respect to the location shown in theDeclarations or Additional Protection Schedule Endorsement.

our limit for any covered loss will be $1500 on any one article,$2500 in the aggregate;

Our limit for covered other structures under Coverage A - DwellingExtension is amended to include the additional limit(s) shown inthe Declarations or Additional Protection Schedule Endorsement.

The Section II Coverages are extended to cover the one or twofamily dwelling(s) shown in the Declarations or AdditionalProtection Schedule Endorsement. Item b in the definition ofinsured premises is amended to include such premises.

The Section II Coverages are extended to cover the watercraftpowered by outboard motor(s), owned by an insured and describedin the Declarations. Exclusion 19a(5) does not apply to suchdescribed watercraft.

Jewelry, watches, precious and semi-precious stones, gems andfurs will be insured for risks of accidental direct physical loss ordamage, subject to the following additional exclusions andlimitations:

Page 15 of 16

Section II: The insured premises will not be consideredbusiness property because an insured occupies a part of it asan incidental office, school or studio as described. Section IIExclusion 4 Business is amended to add:

Section I: Coverage B - Personal Property is extended for up toan additional $5000 to cover business personal property of thisdescribed incidental occupancy. This includes equipment,supplies, stock of merchandise in storage and furnishings usualto the described occupancy while such property is on theinsured premises.

to bodily injury or property damage arising out of thebusiness pursuits of an insured in connection with abusiness owned or financially controlled by such insured orby a partnership or joint venture of which such insured is apartner or member;

The Section II Coverages are extended to cover an insured whoprovides home day care. The definition of insured premises isamended to include that part of the premises occupied for homeday care. Section II Exclusion 4 Business is amended to add:

We will pay the cost of repair or replacement of property listedbelow and owned by an insured, without deducting fordepreciation.

The interest of the named additional insured(s) will be terminatedonly if we give such additional insured at least 10 days writtennotice of termination.

Section II: Coverage D - Personal Liability and Coverage E -Medical Expense but only with respect to ownership,maintenance or use of the insured premises.

The definition of insured in this policy includes the person ororganization named as an additional insured in the Declarations orAdditional Protection Schedule Endorsement with respect to:

owned, operated, or hired by or for the insured or employer orused by the insured for the purpose of instruction in their use.

to bodily injury to a fellow employee of an insured injured inthe course of employment;

to bodily injury or property damage arising out of therendering or failing to render professional services (other thanteaching);

business pursuits of an insured which are necessary orincidental to the use of the insured premises as thedescribed office, school or studio.

(Applies only to the occupancy by the insured as shown in theDeclarations or Additional Protection Schedule Endorsement.)

owned, operated, or hired by or for the insured oremployee or used by the insured for the purpose ofinstruction in their use.

This coverage does not apply to bodily injury or propertydamage arising out of the supervision, entrustment,maintenance, use, loading or unloading of:

home day care service regularly provided by an insured onthe insured premises for which an insured receivesmonetary or other compensation.

OPTION 2 - EXTENDED COVERAGE ON JEWELRY, WATCHESAND FURS.

OPTION 3 - HOME DAY CARE.

e.

(1) saddle animals and vehicles for use with them;(2) any type of aircraft, glider, balloon, parachute or otherair conveyance;(3) any type of motor vehicle or motorized landconveyance; or(4) watercraft of all types;

OPTION 4 - EXTENDED WATERCRAFT LIABILITY AND MEDICALEXPENSE COVERAGE.

OPTION 5 - OFFICE, SCHOOL OR STUDIO USE.

1.

Any deductible shown in the Declarations also applies to lossunder this coverage.2.

e.

OPTION 6 - BUSINESS PURSUITS.

1.

2.

3.4.

a. saddle animals and vehicles for use with them;b. any type of aircraft, glider, balloon, parachute or other airconveyance;c. any type of motor vehicle or motorized land conveyance; ord. watercraft of all types;

OPTION 7 - ADDITIONAL PREMISES COVERAGE.

OPTION 12 - NAMED ADDITIONAL INSURED(S).

1. Section I: Coverage A - Dwelling and Dwelling Extension;2.

OPTION 13 - OTHER STRUCTURES.

OPTION 14 - PERSONAL PROPERTY REPLACEMENT COVERAGE.

1. This coverage applies to:a. awnings;carpeting;household appliances;b.c.

when the insured is a member of the faculty or teaching staffof any school or college to bodily injury or property damagearising out of the supervision, entrustment, maintenance, use,loading or unloading of:

(Applies only to the described premises.)

the insurance provided by this coverage applies instead of andnot in addition to that provided in Coverage B - PersonalProperty;1.

2.we do not cover loss or damage caused by mechanical orelectrical breakdown, wear and tear, gradual deterioration,insects, vermin or inherent vice;

3.

if any property covered consists of two or more parts, we willonly be liable for the value of the part lost or damaged. TheLoss to a Pair or Set condition under Conditions - Section Idoes not apply to loss under this option.

4.

Any deductible shown in the Declarations also applies to lossunder this coverage.

f.

other structures covered under the Dwelling Extension thatare not buildings and buildings without a permanentfoundation;personal property under Coverage B - Personal Propertyand not excluded below.

e. outdoor antennas;d.

HO-3 (NV) Ed. 6/94 Stock No. 16985

records, films, tapes or other magnetic recordings;

Page 16 of 16

IN WITNESS WHEREOF, this policy is signed at Madison, Wisconsin, on our behalf by our President and Secretary. If required by statute, itis countersigned on the Declarations page by our authorized representative.

If you receive an actual cash value settlement for damagedor stolen property covered by replacement coverage andyou have not reached your limit, you may make a furtherclaim under this condition for any additional payment on areplacement cost basis provided:

any policy limit which applies.

the actual cash value at the time of loss up to thelimit applying to the property, if the property isnot actually repaired or replaced;

land motor vehicle equipment and accessories for vehiclesyou no longer own;

you notify us within 180 days after the loss of yourdecision to repair or replace the damaged or stolenproperty; and

We will pay the cost of repair or replacement but notexceeding the smallest of:

Loss Value Determination. The Loss Value Determinationcondition in Conditions - Section I is amended to add thefollowing as item a(2):

business property and property of others, on or off thedescribed premises;a.b. paintings, etchings, pictures, tapestries, statuary, articlesmade of marble, bronzes, antiques, rare books and papers,porcelains, rare glassware or any other property whichbecause of its inherent nature, cannot be replaced withnew property;

property whose age or history contributes substantially toits value including, but not limited to, memorabilia,souvenirs and collectors items;property which because of age or condition has becomeobsolete or unusable for its originally intended purpose;

property not maintained in good or workable condition;

3.

a. (2) Loss to covered property covered by Option 14 -Personal Property Replacement Coverage will be settledsubject to the following:

(a)

(b) the amount actually and necessarily spent for thereplacement of an item with a similar item of likekind and quality at the time of loss;(c) the amount actually and necessarily spent for repairor restoration;(d)The following procedure applies to loss to covered propertyunder this option:

Procedures to Claim Replacement Coverage.

(1)

This coverage does not apply to:2.

(2) repair or replacement is completed within one year ofthe date of loss.OPTION 16 - PREMISES ALARM OR FIRE PROTECTIONSPRINKLER SYSTEM.

c.

For a premium credit, we acknowledge the installation of an alarmsystem and/or an automatic fire protection sprinkler systemapproved by us on the insured premises. You agree to maintainthe system(s) in working order and to notify us promptly of anychanges made to or removal of the system(s).

f.

other structures covered under the Dwelling Extension thatare not buildings and buildings without a permanentfoundation;personal property under Coverage B - Personal Propertyand not excluded below.

e. outdoor antennas;d.

property that is outdated or obsolete and is stored or notbeing used.h.g.f.

d.

e.

This is not a complete and valid contract without an accompanying DECLARATIONS PAGE.