The defense coverage is standard to most insurance policies. The carrier generally will defend the insured, with counsel of its choice, against suits alleging bodily injury or physical damage covered by this policy. This is key; the carrier does not owe a defense if the cause of the loss is not covered by this policy. Note that if some allegations within a suit are not covered by this policy, then the entire suit is not covered.

 Likewise, if the limit of liability has been used in the payment of judgments and settlements, the carrier owes no defense coverage. Covered expenses include costs incurred by the carrier, pre and post judgment interest, costs taxed against the insured and expenses incurred by the insured at the request of the carrier, as well as earnings up to $250 per day as long as the absence from work is at the request of the carrier.

 First aid expense provides coverage when the insured provides first aid to others and incurs some expense. Again, the cause of loss must be something covered by this policy; if the cause of loss is not covered by this policy, then first aid expenses incurred by the insured will not be covered.

 5. INCIDENTAL BUSINESS AND RELATED ACTIVITIES COVERAGE

 The liability coverage for incidental business and related activities provides coverage for activities that relate to a business but are not done for business. For example, an insurance agent speaks to drivers education students about automobile insurance and how it works. The agent does no advertising for his agency. This is related to his business, but is not for business. Childcare activities are not included.

 Part time or seasonal business activities of a student under the age of twenty-one are covered as long as the student is self-employed and has no employees. For example if the student has a dog walking or yard mowing business, that would be covered.

Jobs involving cashier, clerical or sales activities are covered as long as the jobs do not involve installation, demonstration , or servicing of equipment. Likewise, the insured cannot be the owner or operator of the business. Note that professional liability is not included here.

 Liability coverage is provided when the insured premises is rented by the insured on an occasional basis as a residence, for use as a residence with no more than two lodgers per family unit, or for use as an office, private garage, school, or studio. For example, it is not unusual for local residents in Annapolis to rent their homes for a week when the Naval Academy holds its graduation; if the tenant has an accident for which the insured is legally liable, coverage is provided. Coverage is not provided, however, for activities in connection with supplemental coverages 1 and 6, or involving injury to a fellow worker arising out of and in the course of work. Work related injuries should be handled by the employer's workers compensation coverage.

 The next section provides coverage for written contracts an insured makes prior to the effective date of the policy. The policy covers liability of others assumed by the insured (a hold-harmless agreement) and the maintenance, use or ownership of an insured premises. Liability for loss assessments is not provided nor is damage by explosion, fire, or smoke. Explosion, fire, and smoke are generally beyond the insured's control and the physical damage coverage of the other party should apply.

 Incidental vehicles are always a confusing issue. Automobiles or anything like them should be covered under the personal automobile policy, but there are some motorized vehicles that do not fit those parameters. Golf carts and recreational vehicles such as ATVs are the most common. Coverage is provided for injury or damage caused by golf carts when the cart is used at a golfing facility to play golf or other allowed leisure activities, including crossing roads to get from a parking area to other parts of the golfing facility. Coverage also applies when using the cart within a private residential community where the residence premises is located and the community includes a golf course and is subject to the authority of a property owners association. Also included is the public roads on which a golf cart can legally travel.

 Recreational vehicles designed for off road use other than golf carts that are not subject to motor vehicle registration are covered when they are not owned by the insured or are on the insured premises at the time of the occurrence. If the insured goes four-wheeling with a friend and uses the friend's four-wheeler, coverage applies when the two are away from the insured's premises. If the insured owns an ATV, the ATV must be on the insured's premises in order for coverage to be provided. The policy then specifies what vehicles that are not subject to motor vehicle registration are covered. Vehicles designed for assisting the handicapped are covered as long as the vehicle was being used to assist the handicapped individual or the vehicle was parked on the insured premises. Vehicles that are in dead storage on the insured premises or vehicles used solely to service the insured premises are also covered. Note that the vehicle must be solely used to service the insured's premises; the vehicle may not be used to assist neighbors in servicing their premises.

 Boat, camping, home, or utility trailers are covered as long as they are not attached to, carried on, or towed by a motorized land vehicle. When such vehicles are attached to or towed by a vehicle, then the auto insurance should apply.

 8. INCIDENTAL WATERCRAFT LIABILITY COVERAGE

 The liability coverage for incidental watercraft is limited to particular types of watercraft and in particular situations. Covered watercraft include the following:

 ·sailing vessels with or without auxiliary power that are less than twenty-six feet long,

· watercraft both designed to be and operated as manually propelled,

·outboard motors owned or leased by the insured with less than twenty-six horsepower for all motors combined,

·outboard motors owned or leased by an insured with more than twenty-five total rated horsepower as long as they are acquired during the current or acquired prior to the current term and insured within sixty days of acquisition,

· watercraft while ashore at an insured premises.

 Some parameters apply to craft not owned by the insured. These craft include the following:

 ·Watercraft rented to an insured with inboard or outboard engines less than fifty horsepower,

·craft not owned or rented to any insured if the occurrence arises out of the direct act of any insured,

·outboard motors not wholly or partially owned by or leased to any insured.

 Coverage is provided for all of the aforementioned craft. MSO provides coverage for craft that is manually propelled, craft while ashore at the insured premises, craft not owned or rented to any insured if the occurrence arises out of the direct act of an insured, and outboard motors not wholly or partially owned or leased to any insured. So an insured can borrow a friend's boat and coverage applies. Likewise, if a friend docks his boat on the insured property there is coverage.

 Loss assessment coverage applies when the insured lives in a community with an association; associations tend to restrict the looks of the exterior of premises, maintain a community pool or clubhouse, and other such communal items. When an insured is assessed by the association or corporation for something that all members are assessed for, coverage is available. There is a $200 deductible that applies to this coverage. Coverage applies only when the assessment is made due to an occurrence that would be covered under section II of the policy, or the liability of directors, officers, or trustees acting in their capacity if they are elected by the community members and are serving without receiving income. If the assessment results from a deductible in insurance that is purchased by the corporation or arises from the lack of insurance, a limit of $1,000 applies.

 Section II C—Conditions

 1. DUTIES OF INSUREDS – WHAT TO DO IN CASE OF ACCIDENT, CLAIM, OR OCCURRENCE

 Analysis

 Section C includes conditions of the policy. Requirements of the insured in event of a loss and maximum limits, aggregate limits, and coverage when two policies are in force are described. These are conditions for liability coverage.

 The requirements of the insured in event of a loss are fairly standard. The insured must report the loss, send the carrier bills, documents, summonses, cooperate with the carrier in its investigation, submit to examination under oath if required, and refrain from making any voluntary payments or incur expenses unless written permission is received from the carrier. First aid expenses are an exception. Written proofs of loss and physical examinations by the physician of the carrier's choice are also required. Should the insured fail to adhere to any of these conditions, the carrier can void the carrier's obligation to make payment for any claim.

 This section clearly explains that the limit of liability is the maximum that is paid out in a loss. If an aggregate limit applies, then that is a limit for all occurrences that happen during the policy period. The limit of liability may be $250,000 while the aggregate limit may be $1,000,000. For example the insured has a loss worth $200,000, a second loss worth $100,000, and three more losses of $250,000; those losses total $1,050,000. This sum is applied to the aggregate limit and since the total of losses is over the aggregate limit, there is $50,000 from the last claim that is not paid that is the responsibility of the insured. However, the policy states that additional coverage may be purchased. Likewise the procedures for when two policies apply to the same policy are explained.

 Section II D—Liability Not Insured

 1. AIRCRAFT, MOTOR VEHICLES, AND WATERCRAFT EXCLUSION

 Analysis

 Section II D, liability not insured, begins with an anticoncurrent causation clause. Losses caused by an excluded peril are not covered even if a nonexcluded peril is a contributing factor in the loss.

 Liability from the maintenance, operation, use, or ownership of aircraft, watercraft or motor vehicles owned by, rented or loaned to any insured is excluded. This is fairly standard language for excluding such vehicles. Automobiles should be covered on automobile policies, and likewise there are special policies for aircraft and certain watercraft. Any entrustment by the insured of such equipment to others, whether under supervision or not, is excluded as is vicarious liability of parents for acts of minors for using such vehicles. Whether the insured, the insured's minor children, or someone else the insured allows to use these vehicles is involved, liability for such actions does not belong on a homeowners policy and therefore is excluded.

 Exceptions are made for hobby aircraft not designed to carry persons or property for a fee, and for injury to a person while performing duties as a residence employee. Limited coverage is explained in the supplemental coverages section of the policy.

 Business activities are excluded as well, as is the rental of a premises by an insured. Again, limited coverage is provided in the supplemental coverages section. Liability assumed under contract by the insured is excluded expect for what is provided in the supplemental coverages section. Other than the supplemental coverages section, the above mentioned possessions and activities are excluded.

 The endangerment or harm exclusion states that injury or damage, whether or not it is intended or expected, is excluded as long as it was the result of an insured's willfully harmful act or knowing endangerment. If the insured engaged in an activity that he knew could be harmful to a bystander, even if the insured intended no harm there is no coverage. For example an insured goes out into the backyard with a bow and arrow and shoots into the field behind the house. The insured knows there is a house on the other side of the field and the field is not that large. The arrow hits the house and causes damage to the siding. Even though the insured meant no harm, it was an act where the insured knew he could be endangering the neighbors; there is no coverage.

 The injury to specified persons exclusion specifies that bodily injury is not covered for insureds or those eligible for coverage under a disability, workers compensation, or similar law where the insured is to provide such benefits. The insured should be maintaining those policies for his workers, and those policies should cover any injuries. Coverage F, medical payments to others, does not apply to anyone other than residence employees who reside at the residence, residence employees off the insured premises while not performing their official duties, or anyone paid for the bodily injury to others coverage. If the insured has employees who the state mandates that the insured provide workers compensation or other such coverage, then there are policies available designed to provide such coverage. The homeowners liability is not designed for such coverage. Likewise, residents of the premises are insureds, and should not be covered by the policy for medical expenses related to occurrences in their home.

 6. LOCATIONS NOT INSURED EXCLUSION

 Analysis

 Unless a property is an insured premises covered by this policy, any injury or damage that arises out of any premises owned, rented, or controlled by the insured is not covered. The only injury that is covered on another premises is that of a residence employee while performing such duties at the other premises. For example, an insured has a cabin by the lake that he uses in the summer. The cabin is not listed on the policy. Friends visit and get injured at the cabin; there is no coverage since the premises is not an insured location. However, if the housekeeper is working at the beach house and gets injured, there is coverage since she is a residence employee.

 A similar exclusion applies for nonowned property; property in the care of, occupied or used by, or rented to any insured is not covered. However there is some limited coverage for this in supplemental coverage 1.

 Likewise, damage to property owned by any insured is not covered; this may seem odd; however, remember this is the liability section of the policy; physical damage is covered under the physical damage section of the policy.

 Professional liability is also excluded; this is a standard exclusion for homeowners policies. Professional liability of physicians, attorneys, and other professionals is best handled on a professional liability policy, and not a homeowners policy.

 There are many homes that use heating oil to warm the house. The fuel oil exclusion is directed at those homes. Property damage caused by discharge, dispersal, leaking, leaching, release, seepage, or spill of fuel oil regardless of where or how such may take place is excluded. This is a very broad exclusion, and leaves no room for coverage. If there is a spill of fuel oil of any sort, there is no coverage. The policy then continues and excludes expenses, costs, liability, or losses from any demand, directive, order, or request of the insured to clean up, detoxify, monitor, neutralize, remove or test for fuel oil or fuel oil contamination. So not only is the spill itself excluded, but any testing or removal costs are excluded as well. It is common for states to require an insured to prove that the ground and groundwater have not been polluted when a spill occurs. Likewise if a governmental authority cleans up, contains, detoxifies or otherwise handles a spill and looks for reimbursement for expenses, those expenses are not covered.

 The next exclusion is for injury or damage due to violation of any ordinance, regulation, or statute that prohibits or limits the communicating, distributing, or sending of material or information. These governmental regulations include the Telephone Consumer Protection Act (TCPA), the CAN-SPAM Act, the Fair Credit Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA), or the Fair and Accurate Credit Transaction Act (FACTA). The TCPA deal with telemarketing activities including autodialers and recorded messages, and the CAN-SPAM Act deals with standards for the sending of commercial emails. The FCRA deals with the dissemination of consumer information, the FDCPA promotes fair debt collection and provides consumers with a way to dispute incorrect information. Lastly, the FACTA allows a consumer to obtain a free credit report once every twelve months from the three major credit reporting agencies. It is unlikely that bodily injury would result from any of the above acts, and physical damage is likewise unlikely. However, the violation of these acts is still excluded.

 The end note is simply a reminder that this is where form MDL 02 ends, and that if MDL 01 has been listed in the declarations then the provisions of MDL 02 are replaced by the provisions of MDL 01.

 Sections I and II—Other Loss and Liability Not Insured

 We provide no insurance for any sort of damages, expenses, liability, or loss directly or indirectly, wholly or partially, aggravated by, consisting of, or resulting from the following – even if loss or an occurrence otherwise covered contributes to such concurrently or in any sequence.

 Analysis

 Like previous sections, this section is preceded by anti-concurrent causation language. If a covered peril and an excluded peril contribute to a loss, the loss is excluded.

 The standard exclusion for acts of war, insurrection, rebellion, or revolution is present. The confiscation of property that is contraband or illegally traded is excluded. If an insured has illegal fruits, drugs, or animal skins and the government confiscates them, the loss of the property is not covered. The insured should not have illegal items.

 If a civil or military authority orders damage or destruction of the insured's property, there is no coverage unless the destruction was for the prevention of the spread of fire. The government is granted great leeway in the ability to destroy an individual's property for official purposes.

 Illegal activity committed by or with the consent of the insured is not covered, nor is knowing violation of governmental regulations. If the insured hires someone to burn down the house in hopes of collecting the insurance proceeds, that is not covered. Likewise, if the insured deliberately pollutes a stream there is no coverage.

 The standard exclusion for nuclear explosion, reaction, radiation, or contamination applies. If any nuclear act results in fire that is otherwise covered there is coverage for that ensuing loss. However, the nuclear explosion, reaction, or radiation itself is not considered to be a fire. For example, a nuclear weapon is detonated and the blast wave causes a home to collapse and ruptures the gas line which starts a fire. The resulting fire is covered.

 Section I and II—General Conditions

 The following conditions apply to the entire policy unless otherwise stated. These conditions may be modified or supplemented by provisions that apply to specific coverages.

 Analysis

 The general conditions section is just that; conditions that apply to the entire policy, not just the property damage or liability section. If the insured wants to file suit against the carrier he must refer to the state endorsement. Naturally this will vary by state.

 The insured cannot assign the benefits of this policy to another individual without the carrier's written consent. However, upon the death of the insured, the insurance applies to those with custody of the property until a legal representative is appointed, and once the representative is appointed that individual is covered within the representative's duties.

 The insured may cancel the policy with written notice to the carrier or the agent. The carrier may cancel or nonrenew the policy according to the state mandatory endorsement covering cancellations and nonrenewal.

 Acts of fraud, misrepresentation, or the concealment of material facts can cause the carrier to void the policy if the carrier relied on the false information in the issuance of the policy. If the carrier decides not to void the policy, coverage still does not apply to any insureds involved in the misrepresentation or fraud.

 The liberalization clause is standard language; if the carrier changes provisions during the policy that broaden coverage and an additional premium is not required, such changes automatically apply to this policy. The changes must be within 45 days of the inception date or within the policy period.

 6. OTHER INSURANCE OR MULTIPLE COVERAGE CONDITION

 Analysis

 The next several sections are standard policy language. The other insurance section explains how coverage applies when there are multiple policies involved. The policy adheres to state statutes, and when the carrier makes a payment they have a right of recovery against others, and the insured is to do what the carrier requires in order to secure said right.

 The policy period begins and ends at the standard 12:01 a.m. standard time, and coverage is provided only when a limit is shown for such coverage in the declarations. The policy may be changed only in writing with consent of the carrier, and the carrier has a right to inspect the property at any time.

 Sections I and II Glossary

 Those words shown in italics are defined for the purposes of this insurance to mean the following:

 Analysis

 This final section provides the defined terms of the policy. Certain terms are defined so that their meaning within the policy is clear in order to lessen confusion.

 Actual cash value is defined as the lesser of the cost to repair, replace, or reconstruct less depreciation. This definition also allows for consideration for age, condition, market value, economic value, obsolescence and other factors. This allowance of other factors gives the carrier more leeway in determining the value of the property.

 The definition of bodily injury is standard; bodily harm, disease, or sickness and resulting care, death and loss of services is considered bodily injury. Note that mental injury is not included, nor is the transmission of any communicable disease. While people tend to think of communicable diseases as sexually transmitted, they do not have to be. Chicken pox, and H1N1 are communicable as well.

 Because of the prevalence of side jobs and little businesses people may start, the definition of business is important. Included in this definition is child care as long as it is undertaken for a fee or payment. There is no limit in this definition that makes certain small income activities non business. Any occupation, profession, trade or commercial activities undertaken for a fee is a business. The child's dog sitting, lemonade stand, babysitting is therefore a business. However, there is supplemental coverage provided in section 5 of supplemental coverages. This is a much broader definition than is found in other standard policies.

 Collapse is something that needs to be defined because of how commonly the word is used for various situations. Collapse is defined as the abrupt falling down or caving in of a building; it must suddenly fall, it cannot slowly deteriorate. Also, a building or part of a building that is in danger of collapsing or is still standing although separated from another part of the building is not collapsed. Basically the structure must suddenly fall into a pile of rubble, not lean, sag, or otherwise seem to be in danger of collapsing. Bulging, cracking, expanding, settling or shrinking are not considered collapse.

 There are three definitions involving computers; data, media, and software. Data is the records and information stored on media or in a computer; an insured's pictures, tax records, emails, and other such information. Media is the material on which the data and records are stored; flash drives, CDs, disks. Software are the programs containing facts, concepts or instructions such as Photoshop, Word, Excel, or Turbo Tax.

 Insured

 Analysis

 The definition of insured is broken into two sections, part A for the property section of the policy, and part B for the liability section. Part B is in addition to those covered in part A. Part A includes the named insured, a resident spouse, resident relatives, anyone under twenty-one in the care of a resident relative, full time students as long as they were a resident of the home before going to school and they are either under the age of twenty-four and a relative or under twenty-one and in the care of the named insured or a resident relative. Also included is a legal representative at the time of the named insured's death, and in event of death any insured on the policy remains an insured as long as they continue to live in the residence premises.

 Under part B, for liability coverage only, persons or organizations legally held responsible for any animal or watercraft owned by the insured are covered as long as those persons are not in possession of the insured's property as part of their business or without the insured's consent. For example, Sam next door agrees to watch the insured's dog while the insured is on vacation. Sam would be covered if Sam became legally liable for an occurrence involving the dog. However, if the insured puts the dog in the Pampered Pooch Dog Hotel, the hotel is not covered since that is the hotel's business, to board dogs when their owners are away.

 Likewise thieves and others who take the insured's property without permission are not covered.

 While vehicle coverage is limited, there is some liability coverage for employees of the insured performing their duties as long as they are not part of a business. The insured's private housekeeper on an errand for the insured would be covered. The housekeeper must be using a vehicle covered by the policy. Also, other persons using the vehicle on the insured premises with the insured's permission is covered. For example, if a neighbor is helping the insured harvest the garden and in using the ATV runs into another neighbor causing injury, that would be covered. Note that the vehicle in question must be covered on the homeowners policy, and not just any vehicle.

 The definition of insured premises is likewise broken into two sections, part A and part B. Part A can be considered to be the main residence, while part B includes other premises under certain conditions, access ways, and other extraneous properties. The insured premises as shown in the declarations must be one of the following:

 ·A one- to four-family, or half of a two-family house, and related structures and grounds owned by the named insured and exclusively used by the named insured's household.

·the part of a row or townhouse owned by the named insured and related structures and grounds exclusively used by the named insured's household.

·A one- or two-family, or half of a two-family mobilehome, and related structures and grounds owned by the named insured and exclusively used by the named insured's household.

·An apartment, rented premises, condominium, or cooperative, the named insured resides in and those parts of the building exclusively used by the insured's household, or a family unit in a multi-family unit owned by the named insured and covered by form MHO 4.

 The premises must be used solely as a private residence or as otherwise allowed in the policy. Included in "exclusive use" is property normally occupied by the named insured or his household that is rented to others within the parameters on the policy.

 Part B of the definition includes items that are not necessarily part of the residence structure. Included in part B are as follows:

 ·Access ways and grounds immediately joining the premises and are used in connection with the premises.

·Cemetery or burial vaults of an insured.

·other premises used in connection with the premises described in A

·The part of other premises including grounds, structures and ways used by the household as a residence, as long as the property is specified in the declarations or is newly acquired during the policy period.

·The part of another premises that is not owned by the insured but where an insured is temporarily residing, or a premises occasionally rented to an insured for private (nonbusiness) use.

·Vacant land owned or rented to an insured, or land on which a 1 or 2 family dwelling is being constructed for an insured. Farm land is not included.

  Not all of these items are self-explanatory; other premises used in connection with the premises described in A, a premises occasionally rented to an insured for private use and vacant land often require further explanation.

 Other premises used in connection with the premises described in A can be a rented property for a special occasion; the insured rents a hall for the daughter's wedding, or rents a park area for a family reunion. These premises are being used because the insured's residence is too small, therefore these rented premises are used in connection with the insured premises. As far as premises occasionally rented to an insured for private use, this could be the renting of a garage or a loft for creating art work or other crafts which the insured does not sell but creates simply for fun. With vacant land the question comes up as to what exactly is vacant? Is land with only a fence on it vacant, or does the fence count as a structure? The policy does not define vacant, and in such instances courts turn to standard desk references. Merriam Webster Online defines vacant as "not put to use"; Couch on Insurance Third Edition defines vacant land as " land unoccupied, unused, and in its natural state". Therefore, as long as land has any structure on it, whether a shed, a fence, or something else, that land is not considered vacant.

 Money

 Analysis

 The remaining definitions are straightforward. The definition of occurrence does not include actual or alleged misrepresentation or omissions of any kind in the sale of real or personal property. For example if the insured sells a piece of furniture without disclosing that it has bedbugs or termites and the purchaser seeks recourse, the policy does not provide coverage.

 The pollution definition is standard as well. One thing that repeatedly comes up is whether or not remains of a deceased individual are pollutants. Remains are not something that can be reclaimed, reconditioned, or recycled. Reviewing the definition the items are generally the result of a manufacturing processes, and not natural decomposition. Since policy terms must be read in context, even though those cleaning up remains may wear special suits, human remains are not considered to be pollutants.

 A residence employee is an insured's employee as long as that individual is not performing any duties in the insured's business; duties performed are domestic or household duties for the insured premises.

 The residence premise is defined as what is shown as the residence premises as shown on the declarations and fits the description in part A of the insured premises definition. The remaining definitions are standard and direct.