Filed Under:Claims, Education & Training

Know Your CE: Homeowners 3--Special Form

Each issue, Claims CE provides several continuing education-based questions designed to test claim professionals on their knowledge of a particular topic. This is in an effort to help educate and inform adjusters and supervisors on appropriate claim-handling techniques. For this edition, we take a look at the Homeowners 3--Special Form (HO 00 03 10 00).

The question-and-answer format is meant to be general in nature and does not necessarily account for the differences in law and practice in different venues. The authors of this question-answer column are not attorneys; content should not be construed as legal advice for the unique circumstances of any particular claim.

Answer and explanation

The best answer is "b," coverage is available for damage to the dwelling as a result of both the neighbor's actions and the decomposition of human remains. However, there is no coverage for damage to the personal property.

Question #2: The Stolen Boat

The insured owns a 12-foot fishing boat that is powered by an electric motor attached to its transom. After hearing from a friend that the fish are biting at a local lake, she hooks up her trailer and heads for the nearest boat ramp. After launching the boat and carefully tying it to the dock, the insured takes her fishing poles and tackle box from her truck and places them in the boat along with a set of oars and the battery that she uses to power the motor. She then leaves the parking lot briefly to pick up some extra supplies for her day out on the water.

The best answer is "c," coverage is available for the fishing poles and tackle box with no applicable sublimit.

While the HO 00 03 10 00 policy form does not provide coverage for theft away from the residence premises for "watercraft of all types, and their furnishings, equipment, and outboard engines or motors," the use of the word "their" in the policy language specifically connects the furnishings, equipment, and outboard engines or motors to the watercraft that is the subject of the exclusion. Since the fishing poles and tackle box have no fixed connection to the boat and could easily be used elsewhere (on another boat, from the shore, on a dock, etc.), the watercraft theft exclusion probably should not be applied to these items.

Question #3: The Underground Rusted Pipe

The insured has a water supply line that travels underground from the meter box at the street, through the concrete block foundation of the insured's dwelling, and into the interior of the home. The insured has noticed that an area of earth beside the driveway remains saturated with water for several days. A plumber comes out to excavate a section of the driveway and finds a leak in the supply line where rust had deteriorated the pipe resulting in a perforation. There is no damage to the dwelling itself.

The best answer is "a," there is no coverage for the loss.

Earlier editions of the HO 00 03 policy did not mention "water" as property not covered. Under those earlier policies, it is possible that the entire claim would be covered with the exception of the cost to repair the leaking pipe itself. Coverage applied because there was covered property (i.e., the water itself) that was lost or damaged from the peril of accidental discharge.

Question #4: The Frozen Pipe

The insured owns a vacation home insured under a Homeowners 3--Special Form (HO 00 03 10 00). While the insured is away, a strong winter storm moves through the area, causing temperatures to fall below freezing for several days. As a result of the unusually cold temperatures, water in the copper supply lines in the basement ceiling freezes and causes the pipes to split. When the temperatures begin to rise again, the ice melts and water leaks from the damaged pipes into the interior of the home, causing damage to both the dwelling and to personal property.

The best answer is "d," all of the above.

The HO 00 03 10 00 policy requires that an insured uses reasonable care to: "(a) Maintain heat in the building; or (b) Shut off the water supply and drain all systems and appliances of water."

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