1. . www.InsuranceCommunityUniversity.com Homeowners Class

2. . www.InsuranceCommunityUniversity.com Insurance forms and endorsements vary based on insurance company; changes in edition dates; regulations; court decisions; and state jurisdiction. The instructional materials provided by The Insurance Community Center and its authors is intended as a general guideline and any interpretations provided by The Community do not modify or revise insurance policy language. Information which is copyrighted and proprietary to Insurance Services Office, Inc. (“ISO Material”) is included in this publication. Use of the ISO Material is limited to ISO Participating Insurers and their Authorized Representatives. Use by ISO Participating Insurers is limited to use in those jurisdictions for which the insurer has an appropriate participation with ISO. Use of the ISO Material by Authorized Representatives is limited to use solely on behalf of one or more ISO Participating Insurers. The authors of these materials, Insight Insurance Consulting and The Insurance Community Center assumes neither liability nor responsibility to any person or business with respect to any loss that is alleged to be caused directly or indirectly as a result of the instructional materials provided. Insight Insurance Consulting 714 803-5830 laurie@insightinsuranceconsulting.com www.insightinsuranceconsulting.com www.theinsurancecommunity.com Copyright 2010 All Rights Reserved 2

3. . www.InsuranceCommunityUniversity.com What this class will cover  Steps in reviewing the residential property and identifying exposures  Underwriting Considerations for the Homeowners Policy  Policy Review 3

4. . www.InsuranceCommunityUniversity.com Steps in reviewing residential properties and identifying exposures 4

5. . www.InsuranceCommunityUniversity.com Steps in reviewing the residential property and identifying exposures 1.Conduct a Residence Inspection 2.Identify the types of residences to be insured 3. Identify the types of occupancy for each residence 4.Obtain information on the insured, ownership of the residence, and occupants 5.Identify “hazards” 5

6. . www.InsuranceCommunityUniversity.com Steps in reviewing the residential property and identifying exposures 9.Complete the Homeowners Application 10.Determine which insurance companies are best suited for the risk in terms of eligibility, coverages and pricing 11.Submit the applications to the insurance companies 6

7. . www.InsuranceCommunityUniversity.com Identify Type of Residential Property  An insured might have multiple residences that they own and/or rent. Some of the residences may be owner occupied as primary residences while others could be seasonal; part time; or rented to others. 7

8. . www.InsuranceCommunityUniversity.com Identify Type of Occupancy  Own the residence and Occupy as primary residence  Own the residence and Occupy as a secondary or part time residence  Own the residence and Occupy as a residence on a farm  Own the residence on a farm and rent it out  Own and Occupy in part and rent out part of the residence (Duplex, 3-4 Family Dwelling)  Own and Rent to Others  Rent 8

9. . www.InsuranceCommunityUniversity.com Identify Type of “Ownership”  Husband and Wife (Vesting)  Husband or Wife (Vesting)  Domestic Partners (Vesting)  Individuals  Co-Owners  Estate Arrangement  Family or “other” Trust  Contract of Sale  LLC 9

10. . www.InsuranceCommunityUniversity.com Underwriting Considerations for Homes  Occupancy  Owner  Tenant  Seasonal  Secondary  Condition of the home  Age  Upgrades  Renovations  Vacancy 10

11. . www.InsuranceCommunityUniversity.com Underwriting Considerations for Homes  Construction Details (such as)  Roof  Electrical  Heating 11

12. . www.InsuranceCommunityUniversity.com Underwriting Considerations for Homes  Natural Hazards  Location  Flood, EQ, Wind  Proximity to hazards like distance to tidal waters  Brush  Protection Class 12

13. . www.InsuranceCommunityUniversity.com Underwriting Considerations for Homes  Hazards Related to Occupancy  Trampolines  Dogs  Swimming Pools  Wood Burning Stoves  Fuel Tank Storage 13

14. . www.InsuranceCommunityUniversity.com Underwriting Considerations for Homes  Hazards relating to the Insured  Occupation  Financial Stability  Foreclosures/Bankruptcy  Pride of Occupancy (Maintenance) 14

15. . www.InsuranceCommunityUniversity.com Underwriting Considerations for Homes  Usage of Home  Residence  Business, Agriculture, etc.  Limits of Insurance Required  Insurance to Value 15

16. . www.InsuranceCommunityUniversity.com Underwriting Considerations for Homes  Security  SL  Burglar Alarms  Fire Protection  Gated Community 16

17. . www.InsuranceCommunityUniversity.com Homeowners Insurance 17

18. . www.InsuranceCommunityUniversity.com What Types of Properties Are Insured On A Homeowner’s Policy  A Single Family Dwelling  A Multiple Family Dwelling (1-2 units)  A Townhouse Unit 18

19. . www.InsuranceCommunityUniversity.com Townhouse  Similar to an individual home  Two or more units  Sharing of a common wall with individual ownership up to the middle  There is joint ownership of common property and a property owners association 19

20. . www.InsuranceCommunityUniversity.com Townhouse  The owner owns the land beneath the home and the air above.  All improvements to their land i.e., the dwelling portion to the undivided shared wall and an undivided interest in common areas.  Pool, recreation areas, landscaping, etc.  Homeowners Policy HO3 20

21. . www.InsuranceCommunityUniversity.com Homeowners Forms Available  There are several “homeowners” forms available.  However, not all of the forms listed are written in all states  Specifically the HO 0001, HO 0002, HO 0005, and HO 0008 are written in limited states. 21

22. . www.InsuranceCommunityUniversity.com Homeowners Forms Available Homeowners Basic Form HO 0001 Not widely used Homeowners Broad Form HO 0002 Not widely used Homeowners Special Form HO 0003 Coverage A, B, C, D 22

23. . www.InsuranceCommunityUniversity.com Homeowners Forms Available Contents Broad Form HO 0004 Coverage C,D Homeowners Comprehensive Form HO 0005 Coverage A, B, C, D Homeowners Unit Owners HO 0006 Coverage A, C, D 23

24. . www.InsuranceCommunityUniversity.com Homeowners Forms Available Homeowners Modified Form HO 0008 Coverage A, B, C,D 24

25. . www.InsuranceCommunityUniversity.com Components of the Policy 1.Agreement 2.Definitions 3.Deductible 4.Section I Property Coverages 5.Section I Perils Insured Against 6.Section I Exclusions 7.Section I Conditions 25

26. . www.InsuranceCommunityUniversity.com Components of the Policy 8.Section II Liability Coverages 9.Section II Liability Exclusions 10.Section II Additional Coverages 11.Section II Conditions 12.Section I & II Conditions 26

27. . www.InsuranceCommunityUniversity.com Definitions  In the Homeowners Forms whenever a word is defined it is in parentheses in the policy language.  Definitions are key to understanding the intent of the coverage and to determine whether coverage applies and if endorsements are required. 27

28. . www.InsuranceCommunityUniversity.com “You,” “We,” “Us,” “Our”  In this policy, "you" and "your" refer to the "named insured" shown in the Declarations and the spouse if a resident of the same household. "We," "us," and "our" refer to the Company providing this insurance.  Lead-in language to the DEFINITIONS 28

29. . www.InsuranceCommunityUniversity.com “You,” “We,” “Us,” “Our”  In this policy, "you" and "your" refer to the "named insured" shown in the Declarations and the spouse if a resident of the same household.  Note: Some carriers will write coverage for domestic partners.  Note: There is a problem when a spouse is not named in the policy as a Named Insured if they are not residing with the spouse named on the policy. 29

30. . www.InsuranceCommunityUniversity.com “You”, “We”, “Us”, “Our”  Solution:  Name the spouse as a Named Insured.  Add the spouse as an Additional Insured using HO 04 41.  Trusts should be listed along with the individuals making up the trusts 30

31. . www.InsuranceCommunityUniversity.com Definitions (“Aircraft….) 1. Aircraft Liability, Hovercraft Liability, Motor Vehicle Liability and Watercraft Liability  All definitions are put into the contract to define what is NOT covered on a Homeowners Policy 31

32. . www.InsuranceCommunityUniversity.com Definitions “Bodily Injury”  Bodily injury" means bodily harm, sickness or disease, including required care, loss of services and death that results. 32

33. . www.InsuranceCommunityUniversity.com Definitions “Bodily Injury”  Problem:  Coverage is limited to only the defined term of “Bodily Injury”.`  An insured who, in addition to the residence premises on the HO 00 03 has a rental property that liability coverage has been extended to include, in the event of invasion of privacy, wrongful eviction, etc., has coverage gap exists.  An insured who is operating a business as a sole proprietor, employee, or partnership in the event of libel, slander, has a coverage gap. 33

34. . www.InsuranceCommunityUniversity.com Definition “Business”  Prior to the Homeowners 2000 form the definition of “business” was:  "Business" includes trade, profession or occupation.  The definition was vague and open to interpretation. 34

35. . www.InsuranceCommunityUniversity.com Definition “Business”  Most courts who have examined the issue of defining “business” and “business pursuits” agree that two criteria must be satisfied for a business to exist: (a) Expectation of gain (b) At least some degree of continuity 35

36. . www.InsuranceCommunityUniversity.com Definition “Business” "Business" means: A trade, profession or occupation engaged in on a full-time, part-time or occasional basis; or Any other activity engaged in for money or other compensation, except the following: One or more activities, not described in (2) through (4) below, for which no "insured" receives more than $2,000 in total compensation for the 12 months before the beginning of the policy period; 36

37. . www.InsuranceCommunityUniversity.com Definition “Business” (2)Volunteer activities for which no money is received other than payment for expenses incurred to perform the activity; (3)Providing home day care services for which no compensation is received, other than the mutual exchange of such services; or (4)The rendering of home day care services to a relative of an "insured". 37

38. . www.InsuranceCommunityUniversity.com Definitions “Employee”  "Employee" means an employee of an "insured", or an employee leased to an "insured" by a labor leasing firm under an agreement between an "insured" and the labor leasing firm, whose duties are other than those performed by a "residence employee." 38

39. . www.InsuranceCommunityUniversity.com Definition “Insured” "Insured" means: You and residents of your household who are: (a) Your relatives; or (b) Other persons under the age of 21 and in the care of any person named above; 39

40. . www.InsuranceCommunityUniversity.com Definition “Insured” b. A student enrolled in school full time, as defined by the school, who was a resident of your household before moving out to attend school, provided the student is under the age of: (1) 24 and your relative; or (2) 21 and in your care or the care of a person described in a.(1) above; or 40

41. . www.InsuranceCommunityUniversity.com Additional Insured – Student Living Away From The Residence Premises - HO 05 27 10 00  Allows the definition of “insured” to be expanded to include an older student.  Must have originally been a resident of the household.  Must be a relative (any age) or a non- relative under the age of 21 and under the care of another insured.  Must be enrolled in school and reside at the scheduled address. 41

42. . www.InsuranceCommunityUniversity.com Other Members Of Your Household - HO 04 58 10 00  Expands the definition of “insured” to include any scheduled person.  Allows the off-premises personal property coverage to apply for this person’s benefit.  The coverage for this person’s personal property is part of Coverage C.  Provides that the named insured will fairly represent this person to the insurance company and will act on that person’s behalf. 42

43. . www.InsuranceCommunityUniversity.com Assisted Living Care Coverage - HO 04 59 10 00  This endorsement schedules a person living in an assisted living facility, such as long term nursing, assisted living, nursing home, rest home, etc.  This person must be related to the insured by blood, marriage or adoption.  This endorsement provides “insured” status for this scheduled person. 43

44. . www.InsuranceCommunityUniversity.com Residence Held In Trust – HO 05 43 10 00  Expands the definition of insured to include a “trustee”, who is not named in the Declarations page.  Includes specific members of their family. 44

45. . www.InsuranceCommunityUniversity.com Other “Insured” considerations  It is very common for a home owner to have a loan on their home or other types of property.  The Lenders Loss Payable Endorsement 438 BFU NS (05 42) is attached to the policy to provide “non-derivative” protection for the lender.  Additionally the lender is named on the declaration page. 45

46. . www.InsuranceCommunityUniversity.com Additional Interests Residence Premises  In addition to the Mortgagee this endorsement allows for other persons or organizations who have an interest in the “residence premises” to be listed on the policy. The form does provide cancellation and non renewal notification to the parties so indicated. 46

47. . www.InsuranceCommunityUniversity.com Definition-“Insured location” “Insured location” means: a.The residence premises; b.The part of other premises, other structures and grounds used by you as a residence; and (1)Which is shown in the Declarations; or (2)Which is acquired by you during the policy period for your use as a residence; c.Any premises used by you in connection with a premises described in 4.a. and 4.b. above; 47

48. . www.InsuranceCommunityUniversity.com Definition-“Insured location” d.Any part of a premises: (1) Not owned by an insured; and (2)Where an insured is temporarily residing; e.Vacant land, other than farm land, owned by or rented to an insured; 48

49. . www.InsuranceCommunityUniversity.com Definition-“Insured location”” f.Land owned by or rented to an insured on which a one, two, three or four family dwelling is being built as a residence for an insured; g.Individual or family cemetery plots or burial vaults of an insured; or h.Any part of a premises occasionally rented to an insured for other than business use. 49

50. . www.InsuranceCommunityUniversity.com Definition- “Motor Vehicle” "Motor vehicle" means: a.A self-propelled land or amphibious vehicle; or b.Any trailer or semitrailer which is being carried on, towed by or hitched for towing by a vehicle described in a. above. NOTE: Definition is included to indicate what is NOT covered on a Homeowners Form 50

51. . www.InsuranceCommunityUniversity.com Definition — “Occurrence” "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in: a.Bodily injury; or b.Property damage. 51

52. . www.InsuranceCommunityUniversity.com Definition— “Property Damage” "Property damage" means physical injury to, destruction of, or loss of use of tangible property. 52

53. . www.InsuranceCommunityUniversity.com Definition “Residence Employee”  An employee of an “insured” or an employee leased to an "insured” by a labor leasing firm, under an agreement between an “insured” and the labor leasing firm; whose duties are related to the maintenance or use of the “residence premises” including household or domestic services; or 53

54. . www.InsuranceCommunityUniversity.com Definition “Residence Employee”  One who performs similar duties elsewhere not related to the “business” of an “insured”.  A “residence employee” does not include a temporary employee who is furnished to an “insured” to substitute for a permanent “residence employee” on leave or to meet seasonal or short tem workload conditions. 54

55. . www.InsuranceCommunityUniversity.com Definition “Residence Premises” 8. "Residence premises" means: a. The one family dwelling, other structures, and grounds; or; b. That part of any other building; where you reside and which is shown as the “residence premises” in the Declarations. 55

56. . www.InsuranceCommunityUniversity.com Definition “Residence Premises” “Residence premises” also means a two family dwelling where you reside in at least one of the family units and which is shown as the residence premises” in the declarations. 56

57. . www.InsuranceCommunityUniversity.com Deductible  The deductible is applicable only to Section1—Property Coverages  The deductible will be indicated on the Declarations Page 57

58. . www.InsuranceCommunityUniversity.com Coverages Provided Homeowners HO 0003 58

59. . www.InsuranceCommunityUniversity.com Coverage Provided  There are four “coverages” provided in the Homeowners. 59 A.DwellingInsured to 100% Replacement Cost B. Other Structures10% of Coverage A Dwelling C. Personal Property50% of Coverage A Dwelling D. Loss of Use20% of Coverage A Dwelling

60. . www.InsuranceCommunityUniversity.com Additional Limits Of Liability For Coverages A, B, C, And D - HO 04 11 10 00  Used to increase the dwelling limit of coverage to apply when the loss exceeds the limit shown on the Declarations page.  Specifies that the same policy percentages for Coverages B, C and D apply. 60

61. . www.InsuranceCommunityUniversity.com Section 1 Property Coverage Coverage A Dwelling Coverage 61

62. . www.InsuranceCommunityUniversity.com Dwelling  The dwelling must be used for dwelling purposes to qualify for a Homeowners Policy  It must be occupied for qualification  Typically the forms will state will limit recovery if the building has been vacant for 60 consecutive days for Vandalism and Malicious Mischief and exclude theft to a home under construction  Some forms exclude all coverage if the building has been vacant 60 days. 62

63. . www.InsuranceCommunityUniversity.com Section I - Property  Property Coverages  Explains the categories of property covered, special limits, excluded property, and additional coverages  Perils Insured Against  Describes the perils covered for direct loss to covered property 63

64. . www.InsuranceCommunityUniversity.com Section I - Property  Exclusions  Lists the perils that are uniformly excluded for all covered property  Conditions  Establishes the insurer’s and policyholder’s responsibilities, and defines how losses will be settled 64

65. . www.InsuranceCommunityUniversity.com Coverage A - Dwelling  The dwelling must be insured for 100% of the replacement cost.  The dwelling amount is used to determine the coverages under B, C, and D as they are percentages of Coverage A 65

66. . www.InsuranceCommunityUniversity.com Extended Replacement Cost (ERC)  Many homeowners carriers are including Extended Replacement Cost for Coverage “A” on the policies.  The ERC can be expressed as a percentage such as 125% or 150% of the coverage “A” limit.  Or the ERC can be expressed in an additional amount of insurance on the Declarations Page 66

67. . www.InsuranceCommunityUniversity.com Inflation Guard  H0 243 (04-84)-Inflation Guard Endorsement  Allows coverages A, B, C, D to be increased annually by a stated percentage. 67

68. . www.InsuranceCommunityUniversity.com Coverage A - Dwelling  Dwelling provides coverage on the dwelling structure located on the residence premises including structures attached to the dwelling for the amount indicated on the declarations page 68

69. . www.InsuranceCommunityUniversity.com Coverage A - Dwelling  Under Coverage “Dwelling:” materials and supplies located on or next to the residence premises used to construct, alter, or repair the dwelling or other structure on the residence premises.  Land is not covered. 69

70. . www.InsuranceCommunityUniversity.com Coverage A - Dwelling  Problem:  Definition of construction.  There is no coverage for “theft in or to a dwelling under construction, or of materials and supplies for use in the construction until the dwelling is finished and occupied. 70

71. . www.InsuranceCommunityUniversity.com Coverage A - Dwelling  Coverage “A “is generally provided on a replacement cost basis.  The limit for coverage a must be at least 80% of the current replacement cost of the dwelling in order for losses to be settled at replacement cost.  Replacement cost means the cost of replacing property without a reduction for depreciation.  You must replace property or valuation reverts to actually cash value. 71

72. . www.InsuranceCommunityUniversity.com Coverage A--Dwelling  There is an exclusion for Ordinance or Law which means the enforcement of any ordinance or law regulating the construction, repair, or demolition of a building or other structure, unless specifically provided under this policy.  There is an endorsement available to remove the exclusion 72

73. . www.InsuranceCommunityUniversity.com Ordinance Or Law - Increased Amount Of Coverage - HO 04 77 10 00  The homeowner’s policy allows for 10% of the limit of coverage for Coverage A – Dwelling to apply to building ordinance compliance.  This endorsement allows that percentage to be increased.  Does not apply coverage to Coverage B, C or D. 73

74. . www.InsuranceCommunityUniversity.com Functional Replacement Cost Loss Settlement - HO 05 30 10 00  Allows for functionally equivalent building to replace the original structure.  Buildings under Coverages A or B are eligible.  Must be insured at least 80% to functional value.  Must contract to rebuild within 180 days of loss. 74

75. . www.InsuranceCommunityUniversity.com Coverage A - Dwelling  Some companies have special reproduction provisions for older homes especially those on the registry 75

76. . www.InsuranceCommunityUniversity.com Coverage B Other Structures Provided for Automatically for 10% of the Coverage A Dwelling Amount 76

77. . www.InsuranceCommunityUniversity.com Coverage B – Other Structures  Coverage on a garage or other private structures not attached to or part of the dwelling.  Includes such things as swimming pools, fences, tool sheds, tennis courts, and greenhouses. 77

78. . www.InsuranceCommunityUniversity.com Coverage B – Other Structures We cover other structures on the residence premises set apart from the dwelling by clear space. This includes structures connected to the dwelling by only a fence, utility line, or similar connection. 78

79. . www.InsuranceCommunityUniversity.com Coverage B – Other Structures  We do not cover:  Land…  Other structures rented or held for rental to any person not a tenant of the dwelling unless used solely as a private garage  Other structures from which any “business” is conducted; or 79

80. . www.InsuranceCommunityUniversity.com Coverage B – Other Structures  Other structures used to store “business” property. However, we do cover a structure that contains “business” property solely owned by an “insured” or a tenant of the dwelling provided that “business property” does not include gaseous or liquid fuel other than fuel in a permanently installed fuel tank of a vehicle or craft parked or stored in the structure. 80

81. . www.InsuranceCommunityUniversity.com Coverage B – Other Structures  The 10% of coverage “A” that is automatically provided as a coverage “B” limit is increased by some carriers or specific coverage on scheduled structures can be obtained by endorsement. 81

82. . www.InsuranceCommunityUniversity.com Coverage B – Other Structures The limit of liability for this coverage will not be more than 10% of the limit of liability that applies to Coverage A. Use of this coverage does not reduce the Coverage A limit of liability. 82

83. . www.InsuranceCommunityUniversity.com Coverage B – Other Structures  Problem:  If the insured operates an incidental business in the home, coverage for the dwelling is provided.  If the insured operates an incidental business or stores business personal property in the “other structure” the “other structure” is not covered.” 83

84. . www.InsuranceCommunityUniversity.com Coverage B – Other Structures  Solution:  H0 04 42 --Permitted Incidental Occupancies - Residence Premises  Covers an other structure being used for a “business” conducted by an “insured” at a specified limit..  Identify on the endorsement the type of business and if it is operated in the Dwelling or Other Structure.  The business MUST be operated as the named insured appears. 84

85. . www.InsuranceCommunityUniversity.com Other Structure Endorsements  H0 04 40 --Structures Rented to Others Residence Premises  Covers described rental structures for a specified limit. 85

86. . www.InsuranceCommunityUniversity.com Other Structure Endorsements  H0 04 48 -Other Structures - Increased Limits  Increases coverage on detached structures for an amount excess of the policy amount.  The structure(s) that necessitates the increase must be described. 86

87. . www.InsuranceCommunityUniversity.com Coverage C Personal Property Provided for Automatically for 50% of the Coverage A Dwelling Amount 87

88. . www.InsuranceCommunityUniversity.com Coverage C—Personal Property  The ISO Homeowners Form provides for the percentage of Coverage A to be 50%  There are insurance companies who will issue the coverage with a higher percentage automatically  Some carriers will allow the percentage to be higher by endorsement 88

89. . www.InsuranceCommunityUniversity.com Coverage C—Personal Property We cover personal property owned or used by an insured while it is anywhere in the world.  Covers the insured’s personal property worldwide, with no territorial restrictions 89

90. . www.InsuranceCommunityUniversity.com Coverage C—Personal Property After a loss and at your request, we will cover personal property owned by: a.Others while the property is on the part of the residence premises occupied by an insured; b.A guest or residence employee, while the property is in any residence occupied by an insured. 90

91. . www.InsuranceCommunityUniversity.com Coverage C – Limit for Property at Other Residences Our limit of liability for personal property usually located at an insured’s residence other than the residence premises is 10% of the limit of liability for Coverage C, or $1000, whichever is greater. However, this limitation does not apply to personal property: 91

92. . www.InsuranceCommunityUniversity.com Coverage C – Personal Property  Clarification:  There is 100% off premises coverage available under Coverage C for covered personal property not subject to special limitation anywhere in the world.  There is a 10% limitation in a secondary Residence Premises. 92

93. . www.InsuranceCommunityUniversity.com Personal Property Endorsement  H0 04 50 10 00— Personal Property At Other Residences—Increased Limit  Increases the 10% of Coverage C at an other “residence” by a specified amount. 93

94. . www.InsuranceCommunityUniversity.com Coverage C – Personal Property  Special Limits of Liability.  There are special limits for different categories of coverage  Insurance companies vary as to the amount of coverage they provide automatically  Insurance companies will allow increases in these coverages or specific insurance by category added by endorsement 94

95. . www.InsuranceCommunityUniversity.com Types of Special Limits on Personal Property 1.Money, Gold, Coins, Etc. 2.Securities, Etc. 3.Watercraft, 4.Trailers & Equipments 5.Theft of Jewelry, watches, furs… 6.Theft of firearms 7.Theft of silverware… 8.Property on the “residence premises” used primarily for business 95

96. . www.InsuranceCommunityUniversity.com Endorsements To Increase Internal Limits  HO 04 12 Increase Limits on Business Property allows the limit to be increased to a maximum of $10,000 on premises and 10% of the increased limit away from premises.  The HO 04 12 DOES NOT provide stored property or stock. It may not be used for a business being conducted BY THE INSURED on the residence premises.  The insured can purchase broader coverage on an Inland Marine basis. 96

97. . www.InsuranceCommunityUniversity.com Types of Special Limits on Personal Property 9.Property away from the “residence premises” used primarily for “business purposes. 10.Electronic apparatus and accessories while in our upon a “motor vehicle”, but only if the apparatus is equipped to be operated by power from the “motor” vehicles’ electrical system while still capable of being operated by other power source. 97

98. . www.InsuranceCommunityUniversity.com Assisted Living Care Coverage - HO 04 59 10 00  This endorsement provides limited coverage for certain types of specified property, subject to the policy deductible.  $250 for each hearing aid or other similar audio enhancement device.  $100 for each pair of eyeglasses.  $100 for all contact lenses.  $500 for all false teeth or dentures.  $500 for each medi-alert device.  $250 for all walking aids and devices such as walkers or canes.  $500 for each wheelchair 98

99. . www.InsuranceCommunityUniversity.com Loss Settlement--Endorsements  H0 290 (04-84) Property Replacement Cost  Replaces ACV with RCV for Personal Property and awnings, carpeting, household appliances, outdoor antennas and outdoor equipment.  H0 243 (04-84)-Inflation Guard Endorsement  Allows coverages A, B, C, D to be increased annually by a stated percentage. 99

100. . www.InsuranceCommunityUniversity.com Property Not Covered a.Articles separately described and specifically insured in this or other insurance b.Animals, birds or fish (Mortality) c.Motor vehicles and parts (PAP) d.Aircraft and parts (Personal Aircraft) e.Hovercraft f.Property of roomers, boarders, and other tenants (Personal HO4) 100

101. . www.InsuranceCommunityUniversity.com Property Not Covered h.Property in an apartment regularly rented or held for rental to others by an “insured” i.“Business” data including such data stored in ….Credit Cards,Electronic Fund Transfers… j.Water or Steam 101

102. . www.InsuranceCommunityUniversity.com Endorsements To Increase Internal Limits  Increased Special Limits Of Liability  H0 04 65 04 91 / H0 04 66 (with H0 00 15 and H0 17 31 only)  Money, securities, jewelry, firearms, silverware, electronic apparatus while in or while out of a vehicle are the classes of property that may be increased with this endorsement. 102

103. . www.InsuranceCommunityUniversity.com Endorsements To Increase Internal Limits  H0 04 61 —Scheduled Personal Property Endorsement  Allows certain classes of property to have specific coverage with broader perils and no deductible. 103

104. . www.InsuranceCommunityUniversity.com Scheduled Personal Property Endorsement  The Scheduled Personal Property Endorsement Provides Coverage for a Schedule (List) of Specific Items. 104

105. . www.InsuranceCommunityUniversity.com Scheduled Personal Property Endorsement  A Loss to a Scheduled Item (Other Than Fine Art) Is Settled at the Lesser Of:  Actual Cash Value  The Cost to Repair the Item  The Amount for Which the Item Could Be Replaced With on Substantially Identical to the Lost or Damaged Item. 105

106. . www.InsuranceCommunityUniversity.com Scheduled Personal Property Endorsement (With Agreed Value Loss Settlement) - HO 04 60 10 00  Allows for scheduled items to be paid at the scheduled amount shown.  HO 04 61 still provides coverage at ACV, except for fine arts, which are covered as scheduled.  Expands the coverage to worldwide for all types of scheduled property.  This endorsement also contains broad form pair and set coverage.  This endorsement allows for a buy back of surrendered property. 106

107. . www.InsuranceCommunityUniversity.com Identity Fraud Expense Coverage HO 04 55 03 03  The endorsement provides up to $15,000 for “expenses” incurred by an “insured” as the direct result of any one “identity fraud” first discovered or learned of during the policy period. 107

108. . www.InsuranceCommunityUniversity.com Loss of Use Additional Living Expense Provided for Automatically for 20% of the Coverage A Dwelling Amount 108

109. . www.InsuranceCommunityUniversity.com Coverage D—Loss of Use There are four insuring agreements 1.Additional Living Expense 2.Fair Rental Value 3.Civil Authority Prohibits Use 4.Loss or Expense Not Covered 109

110. . www.InsuranceCommunityUniversity.com Coverage D – Loss of Use 2000 Edition Date Changes 3.Civil Authority Prohibits Use  If a civil authority prohibits you from use of the "residence premises" as a result of direct damage to neighboring premises by a Peril Insured Against, we cover the loss as provided in 1. Additional Living Expense and 2. Fair Rental Value above for no more than two weeks. 4.Loss Or Expense Not Covered  We do not cover loss or expense due to cancellation of a lease or agreement. 110

111. . www.InsuranceCommunityUniversity.com Coverage D – Loss of Use  Loss of Use is provided for 20% of the dwelling amount  If a covered loss makes the insured dwelling uninhabitable, the policy allows two methods of compensation for such loss: 111

112. . www.InsuranceCommunityUniversity.com Coverage D – Loss of Use  Some insurance companies do limit Loss of Use with a percentage.  Some companies will provide for unlimited Loss of Use but will specify the length of time they will pay for example 18 months. 112

113. . www.InsuranceCommunityUniversity.com Coverage D – Loss of Use  Additional Living Expenses- the necessary increase in living expenses incurred by the insured to maintain the insured’s normal standard of living.  Fair Rental Value- the amount of rent that could reasonably be charged for the premises, less any expenses that do not continue while the premises are uninhabitable. 113

114. . www.InsuranceCommunityUniversity.com Coverage D – Loss of Use 4.We will pay for the necessary increase in your normal living expense if: a.Your residence is made untenantable by an off-premises power stoppage; and b.This power stoppage is caused by a peril insured against under Coverage A, B, or C 114

115. . www.InsuranceCommunityUniversity.com Coverage D – Loss of Use This coverage extension will not start until the residence premises has been untenantable for 48 hours and will continue for no longer than 7 days. 115

116. . www.InsuranceCommunityUniversity.com Additional Coverages Subject to Certain Limitations for Specific Perils and Types of Losses 116

117. . www.InsuranceCommunityUniversity.com Additional Coverages 1.Debris Removal 2.Reasonable Repairs 3.Trees, Shrubs, and Other Plants 4.Fire Department Service Charge 5.Property Removed 6.Credit Card, Fund Transfer Card, Forgery, and Counterfeit Money 117

118. . www.InsuranceCommunityUniversity.com Additional Coverages 7.Loss Assessment 8.Collapse 9.Glass or Safety Glazing Material 10.Landlord’s Furnishings 11.Ordinance or Law** 12.Grave Markers  **New in 2000 118

119. . www.InsuranceCommunityUniversity.com Loss Assessment  We will pay up to $1,000 for your share of loss assessment charged during the policy period against you, as owner or tenant of the "residence premises", by a corporation or association of property owners. 119

120. . www.InsuranceCommunityUniversity.com Loss Assessment  The assessment must be made as a result of direct loss to property, owned by all members collectively, of the type that would be covered by this policy if owned by you, caused by a Peril Insured Against under Coverage A, other than: (1) Earthquake; or (2) Land shock waves or tremors before, during or after a volcanic eruption. 120

121. . www.InsuranceCommunityUniversity.com Loss Assessment Endorsements  H0 04 35--Loss Assessment Coverage  Increases the limit for loss assessments (up to $50,000 maximum).  Limits deductible Loss Assessments to $1,000.  Optional limits available for other specified locations. 121

122. . www.InsuranceCommunityUniversity.com Loss Assessment Endorsements  H0 04 36 -Loss Assessment Coverage For Earthquake  Adds coverage for earthquake damage at specifically described locations for a purchased limit at each location using a percentage deductible. 122

123. . www.InsuranceCommunityUniversity.com Ordinance or Law  You may use up to 10% of the limit of liability that applies to Coverage A for the increased costs you incur due to the enforcement of any ordinance or law which requires or regulates  This is new to the 2000 series.  This can be increased with the HO 04 77 Ordinance or Law Increased Amount of Coverage. 123

124. . www.InsuranceCommunityUniversity.com Perils of Insurance 124

125. . www.InsuranceCommunityUniversity.com Perils for Coverages A and B  “We insure against risk of direct loss to property described in coverage A and B only if that loss is a physical loss to property” 125

126. . www.InsuranceCommunityUniversity.com Perils for Coverages A and B  Perils excluded for Coverages A and B  Coverage is limited by the perils excluded.  If a peril is not listed within these exclusions, it is covered. 126

127. . www.InsuranceCommunityUniversity.com Perils for Coverage C  We insure for direct physical loss to property described in Coverage C caused by a peril listed below unless the loss is excluded in Section 1—Exclusions 127

128. . www.InsuranceCommunityUniversity.com Perils for Coverage C 1.Fire or Lightning 2.Windstorm or Hail 3.Explosion 4.Riot or Civil Commotion 5.Aircraft 128

129. . www.InsuranceCommunityUniversity.com Perils for Coverage C 6.Vehicles 7.Smoke 8.Vandalism or Malicious Mischief 9.Theft 10.Falling Objects 11.Weight of Ice, Snow, or Sleet 129

130. . www.InsuranceCommunityUniversity.com Perils for Coverage C 12.Accidental Discharge or Overflow of Water or Steam 13.Sudden and Accidental Tearing Apart, Cracking, Burning, or Bulging or a Steam, Hot Water, Air Conditioning or Automatic Sprinkler System, or Appliance for Heating Water 130

131. . www.InsuranceCommunityUniversity.com Perils for Coverage C 14.Freezing 15.Sudden and Accidental Damage from Artificially Generated Electrical Current 16.Damage by glass or safety glazing material 17.Volcanic Eruption 131

132. . www.InsuranceCommunityUniversity.com Water Back-Up and Sump Discharge or Overflow HO 04 95 01 09  Provides for up to $5,000 for direct physical loss not caused by the negligence of an “insured” to property covered under Section 1 caused by water, or waterborne material which backs up through sewers or drains or overflows from a sump pump 132

133. . www.InsuranceCommunityUniversity.com Section I--Exclusions 1.Ordinance or law 2.Earth movement 3.Water damage 4.Power failure 5.Neglect 6.War 7.Nuclear hazard 8.Intentional loss 9.Governmental Action 133

134. . www.InsuranceCommunityUniversity.com Section I--Exclusions a.Weather Conditions b.Acts or decisions including the failure to act c.Faulty, inadequate or defective:  Planning, zoning, development, surveying, siting  Design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction  Materials used in repair, construction, renovation or remodeling; or Maintenance 134

135. . www.InsuranceCommunityUniversity.com Conditions A.Insurable Interest and Limit of Liability B.Duties After the Loss C.Loss Settlement D.Loss to a Pair or Set E.Appraisals F.Other Insurance and Service Agreement G.Suit Against Us H.Our Option 135

136. . www.InsuranceCommunityUniversity.com Conditions I.Loss Payment J.Abandonment of Property K.Mortgagee Clause L.No Benefit to Bailee M.Nuclear Hazard Clause N.Recovered Property O.Volcanic Eruption Period 136

137. . www.InsuranceCommunityUniversity.com Conditions P.Policy Period Q.Concealment or Fraud R.Loss Payable Clause 137

138. . www.InsuranceCommunityUniversity.com Section II—Liability Coverages 138

139. . www.InsuranceCommunityUniversity.com Section II Liability  Coverage E—Personal Liability  If a claim is made or a suit is brought against an “insured” for damages because of “bodily injury” of “property damage” caused by an “occurrence” to which this coverage applies,we will 139

140. . www.InsuranceCommunityUniversity.com Section II Liability 1.Pay up to our limit of liability for the damages for which an “insured” is legally liable. Damages include prejudgment interest awarded against an “insured” and 2.Provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent We may investigate and settle any claim or suit that we decide is appropriate. Our duty to settle or defend ends when our limit of liability for the “occurrence” has been exhausted by payment of a judgment or settlement. 140

141. . www.InsuranceCommunityUniversity.com Who Is an Insured for Section II - Liability Coverage?  The named insured’s spouse, if a resident of the same household.  Note that it is always correct to show both spouses as named insureds, even if only one of them is on the deed.  Show the “owner” on the first line with the correct trust deed ownership information and then the second spouse. 141

142. . www.InsuranceCommunityUniversity.com Who Is an Insured for Section II - Liability Coverage?  Relatives of the named insured, if residents of the same household.  Anyone under the age of 21, if in the care of the named insured or resident relative and if residents of the same household. 142

143. . www.InsuranceCommunityUniversity.com Coverage E – Personal Liability  It also may be extended beyond bodily injury and property damage to include liability for personal injury with the personal injury endorsement (HO 24 82). 143

144. . www.InsuranceCommunityUniversity.com Liability Coverages  Coverage F—Medical Payments To Others  To others  Incurred within three years  Reasonable charges  On the “insured location”:  Persons on the insured location with the insured’s permission. 144

145. . www.InsuranceCommunityUniversity.com Coverage F – Medical Payments to Others  Off the “insured location”:  Arises out of a condition on the insured location or adjoining ways.  Is caused by the activities of an insured.  Is caused by a residence employee in the course of employment by an insured.  Is caused by an animal owned by or in the care of an insured. 145

146. . www.InsuranceCommunityUniversity.com Section II Exclusions  Motor Vehicles - Coverage is Excluded  Registered for use on public roads  Used for  Auto racing, or other competition  Rented to others  Carrying persons or cargo for a fee  Business purposes 146

147. . www.InsuranceCommunityUniversity.com Section II Exclusions  Motor Vehicles -Coverage Applies  In dead storage  Solely for residence servicing  Designed to assist the handicapped  Being used as such  Parked on an insured location  Recreational use off public roads  Not owned by an insured  Owned by insured and on premises 147

148. . www.InsuranceCommunityUniversity.com Section II Exclusions  Motorized golf carts – coverage applies  Parked at a golf course  In use at a golf course  Travel to and from the course  Crossing roads in the course of play  Private residential community 148

149. . www.InsuranceCommunityUniversity.com Section II Exclusions  Watercraft - Coverage is Excluded  Organized race or other competition  Give back sailboats  Predicted log cruises  Rented to others  Used to carry persons or cargo for a fee  Used for business purposes 149

150. . www.InsuranceCommunityUniversity.com Section II Exclusions  Watercraft - Coverage Applies  Stored  Sailboat  Less than 26 feet  More than 26 feet not owned or rented  Motorboat  Inboard/Outdrive not owned 150

151. . www.InsuranceCommunityUniversity.com Section II Exclusions  Watercraft - Coverage Applies  25 Hp or less  More than 25 Hp  If not owned or rented  Acquired during the policy period  Reported or not  Coverage applies for the policy period  Acquired before the policy period  Declared at policy inception  Reported within 45 days of inception 151

152. . www.InsuranceCommunityUniversity.com Endorsements  H0 24 64 --Snowmobile  Provides Liability and Medical Payments coverage for owned snowmobiles specifically described on the endorsement.  HO 24 97--Snowmobile  Provides Liability and Medical Payments coverage for owned snowmobiles specifically described on the endorsement. 152

153. . www.InsuranceCommunityUniversity.com Endorsement  H0 24 75--Watercraft  Provides Liability and Medical Payments coverage for described watercraft. 153

154. . www.InsuranceCommunityUniversity.com Section II Exclusions  Aircraft  This policy does not cover “aircraft liability.”  Hovercraft  This policy does not cover “aircraft liability.” 154

155. . www.InsuranceCommunityUniversity.com Section II Exclusions Coverage E&F  Expected Or Intended Injury  Business**  Professional** Services  “insured’s” Premises Not An “Insured Location”  War  Communicable Disease  Sexual Molestation, Corporal Punishment Or Physical Or Mental Abuse  Controlled Substances 155

156. . www.InsuranceCommunityUniversity.com Business Exclusion  Business Pursuits of the Insured, or the Rental or Holding for Rental of Any Premises by the Insured, Except If:  Rented on an Occasional Basis  Rented to No More Than Two Roomers or Boarders for a Single Family Unit  Rented Only As an Office, School Studio, or Private Garage 156

157. . www.InsuranceCommunityUniversity.com Business Endorsements  HO 04 96 No Section II—Liability Coverages For Home Day Care Business Limited Section I—Property Coverages For Home Day Care Business  HO 05 90 Home Business Insurance Coverage 157

158. . www.InsuranceCommunityUniversity.com Business Endorsements  HO 07 01 Home Day Care Coverage  HO 24 71 Business Pursuits 158

159. . www.InsuranceCommunityUniversity.com Professional Exclusion  "Bodily injury" or "property damage" arising out of the rendering of or failure to render professional services; 159

160. . www.InsuranceCommunityUniversity.com Exclusions for Coverage E Only  Personal Liability Does Not Apply To:  Liability for the insured’s share in any loss assessment as a member of an association, corporation, or community of property owners.  Liability assumed under any contract or agreement.  Property damage to property owned by the insured. 160

161. . www.InsuranceCommunityUniversity.com Exclusions for Coverage E Only  Property Damage to Property Rented To, Occupied, Used by or in the Insured Care but Covers Damage Caused by Fire, Smoke, or Explosion.  Bodily injury to any person eligible to receive benefits under any Workers compensation law; Non-occupational disability law; or Occupational disease law. 161

162. . www.InsuranceCommunityUniversity.com Exclusions for Coverage E Only  All Bodily Injury or Property Damage Covered Under a Nuclear Energy Liability Policy.  Workers Compensation  Intra-family Suits 162

163. . www.InsuranceCommunityUniversity.com Exclusions for Coverage F Only  Coverage does not apply to “bodily injury”  To a “residence employee”  To any person eligible to receive benefits voluntarily  From any nuclear reaction, nuclear radiation, or radioactive contamination 163

164. . www.InsuranceCommunityUniversity.com Section II - Additional Coverages  Claims expenses  First Aid expenses  Damage to property of others  Loss assessment  Limit of Liability  Severability  Duties after an Occurrence 164