Analysis

A $1,500 limit (increased from the 1991 $1,000 limit) applies in the aggregate to all watercraft, be they bowriders or sailboards, including their trailers, furnishings, equipment, and outboard motors. With this low a limit, together with the exclusions of wind or hail loss to this property (unless in a fully enclosed building), and of theft away from the premises, it is generally better to provide separate coverage for watercraft and their accessories, either by a watercraft endorsement to the homeowners or by a separate policy.

Analysis

There is no limit as to type of trailer, so a horse trailer or pull-behind camper is covered. Generally, however, a trailer of greater value may be covered separately under the auto policy—depending, of course, on underwriting criteria. This limit has been increased from the 1991 $1,000 limit.

Analysis

Theft losses of jewelry, precious and semiprecious stones, watches, and furs are covered up to $1,500. The stated limit applies to each theft of property in any or all of the named categories, so that if one theft results in loss of a $1,000 watch and a $600 necklace, the insured's limit is still $1,500. When coverage C is on a special perils basis (as with the HO 00 05 or by attaching endorsement HO 17 31 to form HO 00 06), the limit applies to lost or misplaced items as well as to items that have been stolen. The limit applies to loss by theft. If the jewelry was damaged by fire, the full coverage C amount is available.

Disagreement sometimes arises as to the scope of the terms jewelry and furs. Standard dictionary definitions of jewelry make it applicable to costume jewelry as well as to items containing genuine stones or precious metals, e.g., the Random House Dictionary: “any ornament for personal adornment . . . including those of base metals, glass, plastic and the like.”

With respect to the meaning of furs, courts have most often adopted an interpretation advantageous to the insured. In Starry v. Horace Mann Insurance Co., 649 P.2d 937 (Alaska 1982), the supreme court ruled that a bear hide wall mount worth $5,000 was not subject to the fur limitation since, in the court's opinion, the language of the limitation made it applicable only to “common, everyday effects in the nature of jewelry and fur-bearing garments.”

On the other hand, a district court of appeals in Asbury v. Indiana Union Mutual Insurance Co., 441 N.E.2d 232 (Indiana 1982), held that animal pelts acquired through the insured's hunting hobby had the status of “furs” within the scope of the limit. The insurer denied any coverage at all on the pelts, contending that they were excluded as business property held for sale, since the insured did customarily sell the animal skins from his hunting trips. But the court found an ambiguity between the exclusion of furs when offered for sale as part of a business and the fur limitation which, it said, could be understood as a specific provision of coverage on furs of any kind in the limited amount. In light of this perceived ambiguity, the Indiana court overturned a judgment for the insurer and ruled that the status of the pelts with respect to homeowners coverage was a factual question to be determined by a jury.

The common element in both the Indiana and the Alaska courts' different readings of the fur limitation is that both interpretations worked to the insured's advantage.

Analysis

Again, the limitation is for theft. If the firearms were damaged by being run over by a vehicle, the full amount of coverage C is available. The $2,500 limit, increased from $2,000 in the 1991 edition, includes losing or misplacing in the case of special perils coverage of the HO 00 05. “Firearms” is a more limited term than “guns,” usually applying only to small arms capable of being carried easily by an individual, but not to artillery weapons. In the 1991 edition, the limit applied only to the firearms themselves, and not to accessories, such as detachable gunsights, carrying cases, slings, cartridges or shells, and extra magazines or clips. But this is no longer the case, and the limit includes equipment such as a gun case or a cleaning kit.

Analysis

This is the last of the theft-only special limits. This category includes items often associated with the table: flatware or cutlery; hollowware, which generally means bowls, cups, or vases; and tea sets. Trophies made of or including any of these metals are also limited in coverage. It could be argued, given the wording of the limitation, that any item that is not listed—a silver figurine, for instance—is not subject to the special limit.

Analysis

Special limit h. imposes a $2,500 limit on business property on the residence premises and special limit i. limits coverage for business property away from the premises to $500 (increased from $250). These limits can be increased, using endorsement HO 04 12 10 00, except with respect to business property (a) in storage or held as a sample or for sale or delivery after sale, or (b) pertaining to a business actually conducted on the residence premises. Increasing the limit on premises automatically increases the off-premises limit as well, so that the off-premises limit is always 20% of the on-premises limit. In the case of a business actually conducted on the premises, endorsement HO 04 42 10 00 can be used to increase business property limits on furnishings, supplies, and equipment.

A strict reading of the language of the business property special limit in the 1991 edition treated any of the household property that was used at any time for any business activity as subject to the special limit. Thus, a retired mechanic's tools were subject to the limit. But in the 2000 edition, the word “primarily” is the key. Many people, for example, use a home computer for household records and accounts, but may also use it to work on a business report. So long as the business use is not “primary”—that is, first in importance—there is coverage.

Analysis

The 1991 edition's limit of $1,000 is increased to $1,500 for these categories of property. Limit j. applies to adaptable electronic apparatus that can be operated off the power of the motor vehicle's electrical system, but which may also be operated independently, such as certain portable televisions, cellular phones, CD players, or laptop computers. This category of property also includes antennas, tapes, wires, records, discs, or other media that are used with the electronic apparatus. Compare coverage for this type of apparatus with “property not covered: motor vehicles,” below. There is coverage for tapes, discs, or other media while in a motor vehicle only if such media can be used with the adaptable electronic apparatus described.

The limit applies to electronic property used in business as well as to personal property. If such property is used primarily for business while away from the residence premises, and is not in or upon a motor vehicle, a $1,500 limit also applies. The person operating a mobile office, including laptop computer, should be aware of these limitations. However, this type of apparatus is fully covered at any place other than in or on the vehicle if only put to personal use.

The question is often raised about how the homeowners deductible affects recovery under the special limits. The deductible provision form does not clearly spell out how to apply the deductible in adjusting a claim where loss exceeds one or more of the special limits. A general rule, though, is to pay the insured the maximum amount that can be justified.

As an example, assume an insured with a $75,000 coverage C personal property limit and a standard $250 deductible is robbed of jewelry and watches with a value of $2,500, cash totaling $500, and other personal property amounting to $1,000—for a total loss of $4,000. According to policy provisions regarding the coverage C special limits of liability, the insured can recover no more than $1,500 from the special limit for jewelry and watches and $200 from the special money limit, leaving an $1,300 excess of loss ($1,000 of jewelry; $300 of money).

Since the loss exceeds the special limits that are available (and the coverage C limit is adequate), the $250 deductible can apply against the excess of loss above the special limits ($1,300) and does not serve to reduce the special limit amounts that are available. Therefore, the total recoverable amount is $2,700—$1,500, the total special limit for jewelry and watches; $200, the total special limit for money; and $1,000 towards the other stolen personal property.

Analysis

The policy reference to “articles” that are “specifically” insured by another policy or under another coverage of the homeowners policy makes this exclusion applicable only to other coverage written on a more specific basis than the broad, blanket terms of coverage C.

The restriction is most often applicable when personal property has also been scheduled under a personal articles floater, scheduled personal property endorsement to the homeowners policy, or other inland marine policy. In any of these situations, a homeowners insured should be certain that the separate scheduled coverage is for the full amount of protection desired on the property because homeowners coverage C will not contribute in the event of a loss. Say an insured has a scheduled silver service for six, and a nonscheduled silver vase and bowl. The “property not covered” applies to the silver service, but not to the vase and bowl. Special limit g. applies to those.

The question is sometimes raised whether this exclusion does not also apply to property on which there is other insurance that describes the particular kind of property more specifically than does the homeowners policy, and covers any property that fits that description. The exclusion does not apply in such a case, as it refers only to “articles,” meaning specific, identifiable objects, each described separately and insured individually. Therefore, the normal rules for apportioning loss among nonconcurrent policies apply.

Analysis

Animals, birds, and fish are not covered. Not mentioned in the exclusion are insects or any other forms of lower animal life, subclasses of animal life as separate from the narrow concept of “animals” as are fish or birds. While the apparent spirit of the exclusion would suggest no intent to cover any kind of animal life, the bee keeper or the biology student with a collection of living lower animal specimens might well argue for coverage and perhaps a court would agree.

Analysis

Motor vehicles are excluded, along with their equipment, parts (an addition in the 2000 edition), and accessories. In the 1991 edition, there was no coverage only while the property was in or upon the vehicle. That provision has been removed in the 2000 edition, so that it does not matter whether the equipment or parts are attached to their particular vehicle or not. For example, a pair of snow tires stored in the garage and belonging to the family auto is not covered. If an insured collects vintage hub caps, or any vehicle-related items, the safest procedure is to schedule them so as to avoid the preclusion of coverage.

There is also an exclusion applicable to “electronic apparatus that is designed to be operated solely by use of the power from the electrical system of motor vehicles or all other motorized land conveyances.” Electronic apparatus includes accessories, antennas, tapes, wires, records, discs, or other media for use with the electronic apparatus. The exclusion applies to all such property while in or upon the vehicle. There is a difference between the coverage grant of the special limits, above, and the exclusion here. If the media is used with the in-dash CD player, for example, there is no coverage. But if the media is used with a portable CD player in the vehicle, the special limit of $1,500 applies.

Exempt from the motor vehicle exclusion are vehicles not subject to motor vehicle registration “used solely to service an insured's residence” or designed to assist the handicapped. Because of the addition of “solely,” the coverage in the 2000 edition for vehicles such as lawn tractors has become more restrictive than in the 1991 edition. In the past, an insured could take his tractor to his parents' to mow their grass and coverage would apply; now it can be argued that such usage removes the vehicle from being used “solely” for an insured's residence, and therefore no coverage applies. Although the intent of the language may be to prevent an insured from arguing that the three golf carts in his garage are used to service his premises, the impact is something else.

This exclusion is more encompassing than the motor vehicle exclusion of the section II liability coverage in that golf carts and other unlicensed recreational vehicles, for which there is some liability protection, are excluded as to damage under coverage C unless solely used to service the residence. However, ISO has introduced endorsement HO 05 28 10 00 owned motorized golf cart—physical loss coverage which may be used to fill this gap. (For more information, see “Standard Homeowners Endorsements”, Personal Lines Volume, Dwellings section.)

Analysis

Aircraft and parts are excluded from coverage C. Aircraft, under the definition of “any contrivance used or designed for flight,” therefore includes hang gliders and ultra-lites. On the other hand, aircraft accessories or equipment used in the aircraft but not physically attached to it—navigational maps, parachutes, etc.—are not subject to the exclusion, unlike comparable equipment for a motor vehicle.

An exception to the exclusion clarifies that model and hobby aircraft not used or designed to carry people or cargo are covered property. Note that a similar exception applies to the section II liability aircraft exclusion, but not to the peril of aircraft. To summarize, model and hobby aircraft are treated as aircraft in providing coverage against the peril of damage to insured property by aircraft, but they are not aircraft for the two aircraft exclusions—so the insured has coverage in all three instances.

New in the 2000 edition is an exclusion of coverage for ground effect and hovercraft vehicles. A hovercraft generates a static cushion of air on which to move, while a ground effect vehicle creates the cushion through its own forward motion. A ground effect vehicle has wings (a flarecraft has reverse-delta wings), and may travel up to a height of about 1-1/2 times wing span on this cushion. Obviously, these vehicles are best insured elsewhere. 

Analysis

The homeowners policy contains four business-related exclusions. The first is for personal property belonging to roomers, boarders, and other tenants. This is not covered except for property belonging to roomers or boarders who are related to an insured. Therefore, resident relatives who pay rent or board money to the named insured do not lose the coverage on personal property that they would otherwise have as insureds if they did not pay.

Analysis

In another business-related exclusion, personal property of an insured who is a landlord of an apartment regularly rented or held for rental to others is not covered, except as provided in additional coverage 10 (see below). Property of a relative renting an apartment is not covered even though it would be if the relative rented a room or lived as a boarder. Therefore, if coverage is desired, separate insurance should be arranged, such as under a dwelling contents form.

Analysis

The third business-related exclusion applies to rented property away from the residence premises (furnishings in an off-premises apartment rented to others, for example). This exclusion, strictly applied, could rule out coverage for any property, whether real or personal, rented by the insured to others while it is off-premises.

Analysis

The final business-related exclusion rules out coverage for the expense of reproducing business records otherwise insurable as personal property. The 1991 edition precluded coverage for business data stored in electronic data processing tapes, wires, records, discs or other software media; now such data is not covered if stored in computers or related equipment, which encompasses the previous wording. The cost of blank or unexposed records and media is covered. There is coverage for the cost of blank recording or storage media, and for pre-recorded computer programs the insured has purchased through retail outlets.

Analysis

Credit and fund transfer cards are not covered as personal property. Some coverage for losses arising out of the misuse of such cards is provided by additional coverage six (see below). Note the addition of “access devices used solely for deposit, withdrawal, or transfer of funds.” This is in recognition of on-line banking, in which an insured can electronically transfer funds by means of a home computer. But unless such transfer is the computer's sole purpose, the computer is covered.

Analysis

A new exclusion in the 2000 edition is for water or steam. Previously, it was possible to argue that once water had passed through the insured's water meter it became personal property. Now, water and steam are not covered property no matter how delivered—whether by municipal service or from the insured's own well.

Analysis

Three related coverages are grouped under the title “Loss of Use” as homeowners coverage D. The first is Additional Living Expense. The period for which additional living expense will be paid is limited to the shortest time required to repair or replace the premises or, if the household moves to a new permanent residence, the shortest time required for the relocation to be completed. These coverage periods apply even if the policy expires in the meantime.

Many an increase above normal in household expenses can be paid under this coverage. Although the most common examples are meals in a restaurant or lodging in a hotel, an insured may incur additional expense to keep the family pet in a kennel, or even to lodge a relative who was visiting to help out during a family illness at the time of the loss. Remember, the coverage is designed for the family to maintain its normal standard of living. 

Analysis

If a part of the residence premises is rented or held for rental to others and a covered section I loss makes that part of the premises not fit to live in, this coverage will pay the lost rental value. To be deducted from the amount paid is any expense that does not continue during the rented premises' period of uninhabitability (disconnected utilities, for example). Loss or expense due to cancellation of a lease or agreement is not covered. Like additional living expense, this coverage provides payment only for the shortest period required to repair or replace the affected premises and is not terminated by expiration of the policy.

Sometimes the question arises as to whether the rental value is for furnished or unfurnished premises. The form does not state. Therefore, if an insured normally rents the premises on a furnished basis, rental value would encompass this amount.

Analysis

Additional living expense and fair rental value coverages are triggered by damage to the residence premises making it unfit to occupy only as a result of a covered section I loss to those premises. But there are circumstances in which insureds may be barred from access to their own residences as a result of damage to surrounding premises (as in the case of major fires or windstorms) that leaves their own homes with little or no damage and fit for occupancy. Prohibited use coverage pays additional living expense and fair rental value when an insured is prohibited from the use of the residence premises by a civil authority as a result of damage from an insured peril to neighboring premises. It is important to note the damage must be caused by an insured peril. However, in the 1991 edition, the wording was “a Peril Insured Against in this policy.” For example, if rising flood waters prevented access to the residence premises, there was no coverage since “flood” was not covered by the policy. But the 2000 edition has removed “in this policy.” If an insured has flood insurance and is prohibited from accessing the residence premises because of a flood, an argument can be made for coverage, since the capitalized words appear as a preface to the section I property coverages and elsewhere in the policy, but have no particular status.

The maximum period during which this coverage applies is two weeks. Like the other loss of use coverage, prohibited use coverage may continue beyond the expiration date of the policy.

The limit of liability specified for coverage D in the policy declarations constitutes an aggregate limit for the three loss of use coverages. The policy deductible is applied to coverage D losses. Since an additional living expense or fair rental value claim can arise only in connection with an insured property loss substantial enough to make the premises uninhabitable, the standard policy deductible of $250 will, in virtually all cases, be used up by the direct loss itself. The deductible will be a factor, for the most part, only in the event of a prohibited use claim, which may occur without any other section I loss at all.

In forms HO 00 02, HO 00 03, and HO 00 05, twelve “additional coverages” round out the section I coverage agreements of the homeowners policy. HO 00 04 has twelve additional coverages, but does not include landlord's furnishings. Instead, the form provides an additional coverage for building additions, alterations, fixtures, improvements, and installations, made or acquired by the named insured, to the part of the residence premises used exclusively by the named insured (with a limit of liability for this coverage that is 10% of the coverage C amount). Form HO 00 06 is identical to forms HO 00 02 and 00 03 in additional coverages one through nine, but omits coverage for landlord's furnishings. Additional coverage ten in the HO 00 06 is ordinance or law.

Six of the additional coverage agreements (debris removal; trees, shrubs and other plants; fire department service charge; credit card, etc., loss assessment, and ordinance and law) specifically state that they constitute an additional amount of insurance. Conversely, six of the agreements specifically state that they do not constitute additional coverage amounts (reasonable repairs, property removed, collapse, glass or safety glazing material, landlord's furnishings, and grave markers).

Previously, the 1991 edition was silent as to the additional coverages for loss assessment and landlord's furnishings. This left an insured the opportunity to argue (if necessary) that the provisions including the no-additional-amount statements would not need them if there were not a presumption that “additional coverages” means additional amounts of insurance. This is no longer the case.

Analysis

If a covered loss leaves debris of covered property that must be removed, this coverage pays for the cost of that removal. These costs are included in the limit of liability applicable to the covered property, except when payment of the covered loss, including the debris removal, exhausts the applicable coverage limit. In that case, debris removal coverage will pay up to an additional five percent of the exhausted limit. Also covered is the cost of removing volcanic ash and dust causing direct damage to a building or property in a building.

Coverage is also provided—subject to a $1,000 aggregate limit—for debris removal of fallen trees. Coverage is limited to the insured's trees felled by windstorm, hail, or the weight of ice, snow, or sleet, or to a neighbor's trees that are felled by a coverage C peril. But before coverage under this provision is triggered, the tree must either damage a covered structure or must block a driveway or ramp designed to assist the handicapped. This latter provision is new in the 2000 edition. But in the case of the driveway, the felled tree(s) must block access to the residence premises. A drive that leads from the dwelling to an outbuilding, but does not provide access to the residence premises, does not meet this criterion. 

A question raised by the additional coverage for removal of trees is whether the limit applies to the cost of removing the part of the tree that rests on the damaged structure, or whether that cost is considered to be part of the cost of repairing the structure. For example, if a tree is felled by windstorm and falls onto the dwelling, causing extensive damage, no repairs can begin until the parts of the tree resting on the building are cut away, so it would seem logical to categorize such costs as repair costs. However, the policy language, if strictly interpreted, would include those costs within the $1,000 limit. The policy provides that the insurer “will also pay [the] reasonable expense, up to $1,000, for the removal from the 'residence premises' of” trees felled by the described perils. “Residence premises” is defined in the policy as “the one to four family dwelling, other structures, and grounds…where [the insured] reside[s].” Thus, the $1,000 limit appears to apply to the removal from the dwelling and other structures as well as to removal from the grounds. However, under this arrangement the cost of removing the tree from the structure should still be considered part of the repair cost. If the insurance coverage for repairs is insufficient, the “additional coverage” (coverage in addition to that otherwise provided for in the policy) may then be called upon.

Analysis

When insured property has been damaged by a covered peril, this additional coverage pays the reasonable cost of necessary measures (note, not necessary repairs ) taken solely to protect covered property from further damage. Necessary measures taken to protect covered property may include repairs, but only those repairs made to covered property. Say, for example, a tenant may decide to clean up graffiti on the wall of a rented dwelling. The rented dwelling is not covered property, and so there is no coverage for this expense, unless the vandalism extended to the insured personal property. Payments under the additional coverage are part of the limit of liability applicable to the property being repaired. Further, the coverage does not relieve the insured of duties as prescribed under section I condition B.4., namely, to “protect the property from further damage.” Therefore, the insured is obligated to make repairs to protect covered property but may not be able to recover all the monies expended.

Reasonable repairs coverage is designed principally to address loss situations in which quick action must be taken to minimize the extent of a loss. An insured with a broken picture window or smashed door cannot wait to file a claim before getting the damage repaired since damage of this sort exposes the interior of the building and its contents to additional loss. When such a loss results from a covered peril, the repair made exclusively to protect any covered property from further damage, and made to property covered by the policy, will be reimbursed for the cost of the repair.

Sometimes coverage is not clearly defined. For example, coverage for the cost of digging down to a broken underground water line on the insured's property to repair a leak is not specifically addressed in homeowners forms, although the cost of tearing out part of a building or other structure is included in special perils coverage on the dwelling. The cost of getting at broken pipes, however, may constitute part of the cost of repairs to prevent further damage—if actual damage is caused—and thus would be a subject of reasonable repairs coverage if coverage is not otherwise spelled out. Under the current language of the coverage, digging down to get to a leaking pipe is covered as a necessary measure “to prevent further damage,” but the actual repair of the pipe is covered only if the pipe is covered property (not the case where a tenant is involved) and the damage to the pipe is caused by a covered peril.

Analysis

Property in this category, eligible for neither coverage A as part of the dwelling nor coverage C (since it is technically part of the realty), is insured on a limited basis by this additional coverage. Trees, shrubs, plants, and lawns on the residence premises are covered only against the perils of fire, lightning, explosion, riot, civil commotion, aircraft, vehicles (if not owned or operated by a resident of the residence premises), vandalism, malicious mischief, and theft, but not wind, hail, weight of ice or snow, or any unnamed peril that would be covered under special perils coverage. The aggregate limit for a loss under this coverage is five percent of the coverage A limit, provided as an additional amount of insurance, with a sublimit of $500 ($250 in the case of form HO 00 08) for loss to any one tree, shrub, or plant.

Analysis

If the named insured is liable under a contract or other agreement for fire department charges when firefighters are called to protect covered property from an insured peril, this coverage will pay up to $500 (free of deductible) for such charges. Coverage does not apply if the property is located within the governmental unit or protection district providing the fire protection.  There need not be a formal contract or agreement with the fire department that provides service in order for the additional coverage to apply.

Analysis

This coverage applies to insured property removed from a premises endangered by a covered peril and applies anywhere, against loss from any cause, for up to 30 days while the property is removed. This coverage does not increase the limit of liability on the removed property. If contents are removed from a dwelling threatened by a forest fire, the contents are covered. The fire does not actually have to be burning the dwelling while the property is being carried out.

Analysis

Although the 2000 edition reorganizes this coverage somewhat, it is similar to that in the 1991 edition, except for the addition of “electronic” preceding the words “fund transfer card,” and “access device.” With the advent of on-line banking, an insured can electronically transfer funds via a home computer. Therefore, the coverage grant has been revised to reflect this. Five hundred dollars of coverage is provided under this heading for four categories of loss: (1) the legal obligation of an insured to pay for unauthorized use of credit cards issued to an insured or registered in an insured's name; (2) loss resulting from theft or unauthorized use of an insured's electronic fund transfer card (often referred to as an ATM card) or other access device; (3) loss caused by forgery or alteration of a check; and (4) loss caused by the good-faith acceptance of counterfeit United States or Canadian paper money. In order for coverage to apply, the insured must comply with the terms and conditions under which the credit card is issued. Losses involving use of a card by a member of the named insured's household or anyone who has been entrusted with the card are not covered. Losses arising out of business use or the dishonesty of an insured are also excluded. The $500 limit functions as an aggregate with respect to a series of acts committed by one person. The limit may be increased by adding endorsement HO 04 53 10 00.

Since this coverage has as its subject certain legal liabilities of the insured (to pay for purchases illicitly made by others through use of a stolen credit card, for instance, or to meet the obligations imposed by the amount of a forged or altered check), it also includes an element of defense coverage similar to that associated with liability insurance.

Analysis

Loss assessments charged against the insured as owner or tenant of the residence premises are covered for up to $1,000 when the assessments are made by a corporation or association of property owners as a result of direct loss to property owned by all members collectively. The $1,000 limit is the maximum amount available for all assessments arising from one loss. Loss must be caused by a coverage A peril (or coverage C peril, in the case of an HO 00 04) other than earthquake or land shock waves or tremors before, during or after volcanic eruption. It is required that the assessments occur during the policy period, but the event(s) causing the assessments may occur before the policy takes effect.

The coverage does not apply to assessments made by a government body. If, for example, an association fails to comply with a fine assessed for failure to comply with a building code, there is no coverage.

There are some changes in the 2000 edition. The first is that the insurer will apply a deductible. Although it appears the intent is that only one deductible will apply to any one covered loss, no matter how many assessments arise from that loss, the language “We will only apply one deductible, per unit, to the total amount of any one loss to the property described above” is misleading. The property described is the property owned by all members collectively; the homeowners insurer cannot apply one deductible per unit to that loss. That function belongs to the condominium association insurer.

The second change is that it is specifically stated that the coverage is additional insurance.

Endorsements are available to increase the amounts of loss assessment coverage—both for additional coverage seven and the companion section II liability additional coverage D—and to add earthquake loss assessment coverage. Endorsement HO 04 35 10 00 is used to increase the limit and endorsement HO 04 36 10 00 is used to add earthquake loss assessment. Endorsement HO 04 35 may also be used to add loss assessment coverage for up to two additional locations.

Analysis

Damage both to buildings and personal property by collapse caused by any of these perils is covered, except for form HO 00 08, which does not include collapse coverage. ISO has changed the additional coverage of collapse, probably as a response to some jurisdictions' findings that “collapse” did not necessarily mean a falling to a state of rubble, but could mean structural impairment. (See Meaning of Collapse, for a review of judicial decisions.) The 2000 edition now defines collapse as “an abrupt falling down or caving in, with the result that the building or part of the building cannot be occupied for its intended use.”

Heretofore, if overhead kitchen cabinets came loose and fell because of the weight of their contents, it was easy to find that “collapse” was the cause. But now, it must be somewhat circuitously argued that the cabinets—the part of the building—collapsed, and therefore the cabinets cannot be used to store contents—”occupied for [their] current intended purpose.” Under the 1991 edition, if a chandelier crashed onto a table, damaging both, coverage was clear. But now, what part of the building cannot be occupied for its current intended purpose?

Note that a deck that collapses because of the weight of the people on it is not covered.

Analysis

In forms HO 00 04 and HO 00 06, additional coverage nine, glass or safety glazing material, requires that the glass or safety glazing material be covered as building additions and alterations (see below). Damage to covered property by glass or safety glazing material, however, is covered in all forms. The damage must be caused by pieces of the glass. For example, suppose sun shining directly through a broken window (previously glazed with low-E type glass) scorches a piece of furniture. Since the damage was not caused solely by the broken glass, the scorching is not covered.

If the building has been vacant for more than 60 consecutive days immediately before the loss, only glass breakage resulting from earth movement is covered. The 1991 form did not provide coverage after 30 consecutive days. A building under construction is not considered vacant.

Notably absent from the 2000 edition is the provision that broken glass will be replaced by safety glazing material if required by ordinance or law. The additional coverage for ordinance or law (see below) will fulfill this purpose in all but the HO 00 08, which does not contain this coverage. (The provision for replacing glass with safety glass where required by law has been removed from the HO 00 08 additional coverage, as well.)

The coverage does not increase the limit that applies to the damaged property. A $100 limit applies to this additional coverage in the case of form HO 00 08.

Analysis

This coverage is specific to form HO 00 04. Ten percent of the coverage C amount may be used to cover items such as built in bookshelves installed by the named insured in his or her apartment. It is an additional amount of insurance.

Analysis

This additional coverage was introduced in the 1991 edition. It is not included in forms HO 00 04, HO 00 06, or HO 00 08. Landlord's property is covered for the same perils as apply to coverage C in the particular form, except that theft coverage is omitted. All of the forms provide up to $2,500 coverage for loss to the landlord's appliances, carpeting, and other household furnishings located in each apartment, on the residence premises, that is regularly rented or held for rental. Remember, the homeowners forms may now be written for one to four family dwellings. The insured must reside in one unit; however, the others may be rented. Since the coverage is on a per-unit basis, up to $7,500 is available if the entire building is destroyed by a covered cause of loss.

The form is silent as to application of the deductible if property in all units were damaged as a result of one covered event; therefore, the insured is entitled to a favorable reading and one deductible should be applied.  

Analysis

Previously excluded unless purchased by endorsement, coverage for certain increased costs of demolition, construction, remodeling or repair because of enforcement of an ordinance or law is now included as an additional coverage, except for HO 00 08. Ten percent of the limit of liability that applies to Coverage A, and in form HO 00 04, up to 10% of the amount that applies to building additions and alterations, is available. So, if a dwelling is insured for $150,000, $15,000 is available to meet increased expense resulting from enforcement of any law or ordinance governing repair or rebuilding. Endorsement HO 04 77 10 00 may be used to increase the amount of coverage.

A covered building or other structure must have been damaged by a peril insured against. There is no coverage for loss in value or for removal or cleanup of pollutants.

Previous wording precluded coverage for compliance with any ordinance or law pertaining to pollutants on any covered building or structure; current wording is in or on any covered building or structure. Therefore, asbestos in a building—perhaps wrapping furnace pipes—is excluded as is asbestos on a building—shingles, perhaps.

Analysis

New to the 2000 edition is an additional coverage for grave markers, except in form HO 00 08. Previously, there was confusion as to whether these were other structures, and therefore covered under coverage B (by endorsement, since they were often away from premises), or personal property, and therefore covered under coverage C. The editors of the FC&S Bulletins are of the opinion that they are personal property, since in essence they are the property of various family members, although “affixed” to realty.

The addition of this coverage represents either a broadening or a decrease in coverage, depending upon the point of view.