Summary: A choice of three progressively broader levels of coverage — with respect to the perils insured against — is provided by the Insurance Services Office homeowners 2011 program under forms HO 00 08 05 11, HO 00 02 05 11, HO 00 03 05 11, HO 00 05 05 11, and HO 00 06 05 11. The HO 00 08 insures against ten named perils: fire or lightning; windstorm or hail; explosion; riot or civil commotion; aircraft; vehicles; smoke; vandalism; theft; and volcanic eruption. Forms HO 00 02, HO 00 04, HO 00 06, and the personal property coverage of the HO OO 03 insure against these perils, and add: falling objects; weight of ice, snow, and sleet; accidental discharge; sudden and accidental rupture; freezing; and sudden and accidental artificial current. The final level of coverage, open perils, is found in coverages A and B of the HO 00 03, the HO 00 05, and the HO 00 04 and HO 00 06 when endorsed. At this level, coverage is defined by exclusions. If a cause of loss is not specifically excluded, it is covered. This discussion centers on named perils coverage. For a discussion of form HO 00 08, see Homeowners Form HO 00 08. For a discussion of open perils coverage, including form HO 00 05, see Homeowners Exclusions. Finally, although occasional reference is made to the HO 00 06, for a complete discussion see Homeowners Form HO 00 06—Insurance for Unit Owners. These forms have been revised in 2011, and revisions in this article have been made as appropriate.
Topics covered:
Vandalism or malicious mischief
Rupture of heating or air conditioning systems
The ISO homeowners program provides progressively broader levels of coverage with respect to the perils insured against. At the base are the perils common to all forms: fire or lightning; windstorm or hail; explosion; riot or civil commotion; vehicles; aircraft; smoke; vandalism or malicious mischief; theft; and volcanic eruption. These perils are insured against under modified coverage form HO 00 08, although the theft peril in that form is subject to restrictions not found in other homeowners forms.
The second level of coverage is included in broad form HO 00 02, contents broad form HO 00 04, condominium unit owners form HO 00 06, and the personal property coverage of special form HO 00 03. This level of coverage incorporates the broad form perils, including both additional perils not covered in the modified form and expanded definitions of many of the basic perils. The added perils are: falling objects; weight of ice, snow, or sleet; plumbing discharge; rupture of steam or hot water heating systems, air conditioning systems, or water heaters; freezing of plumbing or similar devices; and damage from artificially generated electricity. There is broader coverage than is provided in the modified form under the perils of vehicles and smoke.
The third level of coverage is represented by coverages A (dwelling) and B (other structures) of special form HO 00 03, and by coverages A, B, and C of comprehensive form HO 00 05. The same level of coverage is available for unit owners coverage A (dwelling and other structures) when form HO 00 06 is endorsed by HO 17 32 05 11. Special personal property coverage for unit owners can be added by endorsement HO 17 31 05 11. Tenant homeowners can also purchase open perils coverage for contents through endorsement HO 05 24 05 11.
Perils at this level of coverage are not named; only restrictions on coverage are specified, by means of exclusions, limitations, and exceptions applying to certain categories of property and certain causes of loss. Any loss to insured property not reached by one of these restrictions is covered. With the forms providing open perils coverage, it is up to an insurer to prove a loss is excluded; with named perils coverage, the burden of proof is on an insured to prove a loss is covered.
The named perils that follow are discussed in their order of appearance in the forms. They apply to dwellings, other structures, and personal property in form HO 00 02. As named perils they apply only to personal property in form HO 00 03; some of them also appear in the “section I — perils insured against” section of that policy. These instances are noted where relevant.
1.Fire or lightning.
Analysis
Three elements must be present for a fire to occur — oxygen, fuel, and a heat source. Combustion results. Closely akin to “fire” is “scorch”; however, something may be scorched without actually bursting into flame. Scorching may be the result of intense heat without actual combustion, as when curtain fabric is scorched by the sun's rays coming through a window.
“Direct loss caused by fire” is understood to include damage that may be caused by firefighters in extinguishing the blaze. Though “fire” is not a defined term in the policy, questions of coverage involving this peril often center on the doctrine of “friendly” vs. “hostile” fire. A friendly fire is one that is intentionally kindled and remains in the place it was intended to be. A hostile fire, on the other hand, is one that is either not confined to the place intended, or one not started intentionally. Though many courts have held that coverage is intended only for the “hostile” fire, this is by no means definitive.
In one case, excessive heat was held to be a fire loss. A defective thermostat failed to cut the heat in a hog barn, and several sows died. The court ruled that the loss was covered under the peril of fire. The case is Engel v. Redwood County Farmers Mutual Ins. Co., 281 N.W.2d 331 (Minnesota, 1979). For further information, see What is 'Fire'?.
2.Windstorm or hail.
This peril includes loss to watercraft of all types and their trailers, furnishings, equipment, and outboard engines or motors, only while inside a fully enclosed building.
This peril does not include loss to the (form HO 00 02: “inside of a building or”] property contained in a building caused by rain, snow, sleet, sand or dust unless the direct force of wind or hail damages the building causing an opening in a roof or wall and the rain, snow, sleet, sand or dust enters through this opening.
Analysis
Many courts have followed the rule that a “direct” loss from windstorm is established when it is shown that the force or strength of the wind caused the damage. Some jurisdictions hold that there is no coverage unless the winds are “tumultuous” and have the nature of a storm. Other courts have addressed the issue of whether there is direct loss from windstorm when the property that was damaged was in poor physical condition, generally finding that there is such a loss if the windstorm was the proximate cause of the loss.
In the named perils forms, there must first be wind or hail damage to the exterior of the dwelling that creates an opening before damage to the interior or contents caused by rain, snow, sleet, sand, or dust is covered. The peril provides no coverage for such losses as rain entering the home through an open window, or a water stain on the ceiling or wall due to a leaky roof (unless the leak was caused by the windstorm). An advantage to the HO 00 03 open perils is that while coverage for personal property is excluded, coverage for the dwelling is not.
Sometimes the approach is taken that the damage to the building must be obvious, as when the wind rips off several shingles. This is a narrow reading of the policy, which only states that an “opening” need be created. The opening could well be capricious, as when a strong gust of wind during a severe storm causes shingles to momentarily lift and then lie back down. Certainly, in event of a loss, a check with the local weather service can easily establish whether wind gusts were sufficient to create an opening.
That was the case in D'Agostino v. State Farm Fire & Casualty Co., 1994 U.S. Dist. Lexis 5340 (Pennsylvania, 1994). The insured claimed strong winds had dislodged a lighting fixture outside the patio doors, allowing water to enter through the exposed holes. The insurer's witness proved the wind on the day in question to have been no stronger than 16 MPH, and that winds of over 400 MPH would have been necessary to dislodge the fixture.
Also excluded is wind or hail damage to all types of watercraft, their trailers, furnishings, equipment, and outboard motors except while inside a fully enclosed building. Note that the word their makes the exclusion apply only to property specifically used with the particular watercraft and exposed to the same risks as the watercraft, not to boating equipment in general.
The question has arisen as to whether there is coverage for a boat damaged by a tree felled by wind. Since there is no nonconcurrent causation language prefacing the named perils, it is reasonable for an insured to find coverage with “falling objects” being the efficient proximate cause of the loss. It is a judicial principle that provisions of coverage are construed broadly for the insured; exclusions narrowly against the insurer.
3.Explosion
Analysis
Explosion is included as a homeowners named peril without definition or limitations. Coverage under the peril therefore is applicable with respect to any cause of loss that can reasonably be described as an “explosion” in any of the ordinarily understood senses of that term. A standard dictionary entry for explode cites both the technical meaning involving “a rapid chemical or nuclear reaction with the production of noise, heat, and violent expansion of gases” and the more general use of the word to describe any violent bursting “as a result of pressure from within.” For example, damage to property caused by a gunshot or rifle shot is covered under the explosion peril. For court cases on the explosion peril, see Explosion Coverage.
4.Riot or Civil Commotion
Analysis
Riot and civil commotion are undefined terms in the current homeowners forms. Black's Law Dictionary (Fifth Edition) defines a “riot” as “a public disturbance involving … an act or acts of violence by one or more persons part of an assemblage of three or more persons, which act or acts shall constitute a clear and present danger of, or shall result in, damage or injury to the property of any other person…” “Civil disorder” (there is no definition for civil commotion) is “any public disturbance involving acts of violence by assemblages of three or more persons which causes an immediate danger of or results in damage or injury to the property or person of any other individual.” In the past, the peril specifically applied to direct loss from pillage and looting that occurred during and at the immediate place of the riot or civil disturbance. Perhaps no change in coverage was intended. In any case, theft coverage, except for form HO 00 08 which provides limited theft coverage, would also apply to looting arising from riot or civil commotion. For a review of court cases on the meanings of “riot” and “civil commotion,” see Riot or Civil Commotion Coverage.
5.Aircraft
This peril includes self-propelled missiles and spacecraft.
Analysis
The homeowners aircraft peril specifically includes damage by self-propelled missiles and spacecraft. There is no requirement of direct physical contact between the aircraft and covered property. This should be noted because the peril of falling objects does not cover loss to the dwelling's interior or contents unless the object first damages the roof or an exterior wall. Therefore, the peril of aircraft covers losses that do not involve direct contact, such as those caused by the violent impact of a nearby airplane crash or a sonic boom. The peril also covers property damage inflicted by motorized model or hobby aircraft or drones.
6.Vehicles
(forms HO 00 02 and HO 00 06: “This peril does not include loss to a fence, driveway or walk caused by a vehicle owned or operated by a resident of the 'residence premises'.”)
Analysis
The scope of this peril varies significantly from form to form: forms HO 00 02 and HO 00 06 exclude coverage with respect to fences, driveways, and walks if caused by a vehicle owned or operated by a resident of the residence premises; forms HO 00 03 and HO 00 04 cover loss caused by vehicles without any specific conditions or limitations. Since form HO 00 05 provides open perils coverage for dwelling, other structures, and contents, it does not include “vehicles” as a peril except to note that breakage of certain fragile articles caused by vehicles is covered.
All of the forms provide coverage (under additional coverage 3) for loss to trees, shrubs, and plants if caused by vehicles that are not owned or operated by a resident of the residence premises.
According to most dictionaries, the word vehicle refers to any means of carrying persons or goods and is generally a synonym for conveyance. Thus, any loss the proximate cause of which is rooted in the functioning or use of a conveyance is a suitable subject for recovery under the agreement to insure against “direct physical loss to property…caused by… vehicles.” There are numerous instances where a vehicle can “cause” damage without coming into actual contact with the damaged property. For example: a vehicle can hit an object and propel it into the side of a house; a vehicle's tires can throw a rock into a window; or a vehicle containing personal property can roll into a body of water, resulting in damaged personal property. Conceivably a boat could qualify as a vehicle (but not in all jurisdictions); therefore personal property lost in a capsized boat could be covered under this peril.
See Aircraft or Vehicles as Cause of Loss, for a review of court cases on the vehicles peril.
7.Smoke
This peril means sudden and accidental damage from smoke, including the emission or puffback of smoke, soot, fumes or vapors from a boiler, furnace or related equipment.
This peril does not include loss caused by smoke from agricultural smudging or industrial operations.
Analysis
In all named perils forms (other than the HO 00 08), the smoke peril applies to any “sudden and accidental damage from smoke” except such damage resulting from agricultural smudging or industrial operations. The exclusion of coverage for damage resulting from agricultural or industrial operations also appears in the section I — perils insured against exclusions applying to dwelling and other structures in forms HO 00 03 and HO 00 05. Since agricultural and industrial operations are on-going, loss from them is unavoidable and therefore uninsurable.
The question has arisen whether the peril of smoke applies to damage caused by regular burning of decorative candles. Note that the damage must be “sudden and accidental” — not a description of the kind of damage resulting from a build-up of candle smoke.
A welcome addition in the current forms is the inclusion of furnace puffback. Sometimes losses have been denied based on the “mechanical breakdown” or even the pollution exclusion, while the named peril coverage for “smoke” damage was ignored.
See Smoke Damage Coverage for a review of court cases on the smoke peril.
8.Vandalism or Malicious Mischief
This peril does not include loss to property on the “residence premises” and any ensuing loss caused by any intentional and wrongful act committed in the course of the vandalism or malicious mischief, if the dwelling has been vacant for more than 60 consecutive days immediately before the loss. A dwelling being constructed is not considered vacant.
Analysis
This peril applies to coverages A, B, and C in forms HO 00 02 and HO 00 04. It applies to coverages A and B in forms HO 00 03 and HO 00 05. In form HO 00 06, the building containing the unit must be vacant for more than sixty days in order for the exclusion to apply. A dwelling (or a building, in the case of the HO 00 06) under construction is not considered to be vacant.
There is no coverage if a vandal enters a premises that has been vacant for at least 60 consecutive days, and spray paints graffiti. But say the vandal in exiting sets the premises on fire. The fire loss is excluded as well. In the past, it might have been possible to argue that the fire was a different cause of loss and therefore covered, while the graffiti damage was not.
Simplified-language homeowners forms do not define “vandalism” and “malicious mischief,” leaving them to take on the meanings ordinary usage (or judicial opinion) assigns them. Malicious mischief is a legal term usually defined by statute and typically denoting “willful destruction of personal property, from actual ill will or resentment towards its owner or possessor” (Black's Law Dictionary, 5th ed.). Dictionary definitions of vandalism are not unanimous in identifying malice as an essential element. Webster's New Collegiate Dictionary defines the term as “willful or malicious destruction or defacement of public or private property” (emphasis added). The same dictionary also identifies willful simply as a synonym for intentional. If this standard dictionary definition is taken as a guide, then coverage for vandalism losses is understood to be coverage against intentional destruction or defacement, malicious or not. The willful act of a child that results in damage to property can be an act of vandalism even though there may be no evidence of malicious intent. However, not all courts would agree with this reasoning. See Vandalism as Cause of Loss.
Pre-homeowners 76 forms defined the peril as applying only to “willful and malicious damage,” a restriction that required some demonstration of malice as the vandal's motive in causing the loss. Now, acts that wantonly or intentionally disregard property rights of others are construed to fall within the peril's coverage.
9.Theft
a.This peril includes attempted theft and loss of property from a known place when it is likely that the property has been stolen.
b.This peril does not include loss caused by theft:
(1)Committed by an “insured”;
(2)In or to a dwelling under construction, or of materials and supplies for use in the construction until the dwelling is finished and occupied; or
(3)From that part of a “residence premises” rented by an “insured” to someone other than another “insured”; or
(4)That occurs off the “residence premises” of:
(a)Trailers, semi-trailers and campers;
(b)Watercraft of all types, and their furnishings, equipment and outboard engines or motors; or
(c)Property while at any other residence owned by, rented to, or occupied by an “insured,” except while an “insured” is temporarily living there. Property of an insured who is a student is covered while at the residence the student occupies to attend school as long as the student has been there at any time during the 90 days immediately before the loss.
Analysis
Homeowners coverage against theft losses applies as well to losses by attempted theft and loss of property “from a known place when it is likely that the property has been stolen.” The quoted language eases somewhat the insured's burden of proof in theft claims; circumstantial evidence strong enough to establish that theft is a reasonable explanation of the loss is sufficient to meet coverage requirements. So, for example, if insureds check their luggage at an airport, and they arrive but the luggage does not, theft may be presumed if the luggage does not materialize after a certain amount of time.
General exclusions applicable to the theft peril rule out coverage for theft: (1) committed by an “insured” (defined as the named insured and the spouse, if residing in the same household, relatives residing in the household, and other household residents who are younger than twenty-one and in the care of another insured); (2) in or to a dwelling under construction, or of construction materials and supplies used in the construction until the dwelling is finished and occupied; or (3) from that part of a residence premises rented by an insured to someone who is not an insured. (Endorsement HO 05 41 10 00 has been introduced to cover theft of covered property from anywhere on the residence premises, including the rented portion.) To avoid disputes over whether building materials and supplies are building or personal property (as sometimes occurs with cabinetry or other items that have not yet been permanently installed), form HO 00 03 excludes theft coverage during construction under provisions applicable to coverage on the dwelling, other structures, and personal property.
A dwelling under construction is not the same as a dwelling that is being renovated or remodeled, however. The exposure of an empty dwelling being constructed is much greater than one being remodeled. Materials and supplies for remodeling or renovation are therefore covered.
A separate set of theft coverage restrictions applies to losses away from the residence premises. Property in any other residence owned or occupied by or rented to an insured is covered against theft only while an insured is temporarily living there. The most typical application of this exclusion is to property in a seasonal residence during those periods when the residence is not in use. For coverage to apply, the insured is not required to be physically present in the residence at the time of the loss, but must be “living” there. This distinction was explored by a Louisiana appellate court in Bryan v. Granite State Insurance Co., 185 So. 2d 310 (1966). The court denied recovery for a theft loss to insureds who had not visited their town apartment, the scene of the theft, for four days preceding the loss. In explaining its assessment of the exclusion's scope, the court suggested that there would have been coverage if the insureds had been staying in town on the night of the loss even if they were out attending a social function when the burglary actually took place.
This case is cited in the later case of Hoff v. Minnesota Mutual Fire and Casualty, 398 N.W.2d 123 (North Dakota, 1986). Here, the Supreme Court upheld the decision of a district court that an HO-6 policy insuring a condominium in North Dakota was not required to provide coverage for a theft that occurred at a rented summer cottage in Minnesota. According to the insured's testimony, he was residing at his condominium in North Dakota at the time of the theft. The court felt that the policy language of the HO-6 was unambiguous and that coverage to the temporary cottage residence was afforded by the condominium policy only during the periods of time that the insured was residing there.
In Sanders v. Nationwide Mutual Fire Insurance Co., 202 S.E.2d 477 (North Carolina, 1974), a court of appeals distinguished situations where the insured has returned home from the temporary residence (Hoff) from circumstances in which the insured goes to yet another temporary location. The insured in Sanders maintained his household in North Carolina and also kept an apartment in Philadelphia, where he was employed. The insured found it necessary to spend four days in Pittsburgh on business, and while he was away, the Philadelphia apartment was burglarized. The court of appeals overturned the lower court's decision, ruling in favor of the insured and holding that the interim stay in Pittsburgh did not alter the fact that the insured was “temporarily residing” in Philadelphia at the time of the loss.
The restriction on theft coverage at a secondary residence does not apply with respect to a student while away from home, if the student has been at the secondary residence (dormitory, fraternity or sorority house, off-campus apartment, etc.) at any time during the 90 days (increased from 60 days in the 2000 edition) immediately preceding the theft.
There is no off-premises theft coverage in named perils homeowners forms for “watercraft of all types, and their furnishings, equipment and outboard engines or motors.” The forms' use of the word “their” in this exclusion ties the excluded furnishings, equipment, and motors to use with the particular watercraft that are themselves the subject of the exclusion. The exclusionary language is not broad enough to reach all property that might be used to equip or furnish a watercraft.
Under the theory of policy interpretation holding that the terms of an exclusion or limitation are to be held to their narrowest reasonable meaning, the terms furnishings and equipment can be applied to boat cushions, life jackets, oars, etc., but probably not to fishing tackle, ski equipment, and similar items of personal property that might be left in a boat. Such items (that is, items other than furnishings, equipment, and motors) are therefore covered against theft off-premises.
Trailers, semi-trailers, and campers are not covered against off-premises theft. Other coverage should be arranged for these items.
10.Falling Objects
This peril does not include loss to the inside of a building or property contained in the building unless the roof or an outside wall of the building is first damaged by a falling object. Damage to the falling object itself is not included.
Analysis
Damage by falling objects to the following kinds of covered property is insured: buildings or structures; the inside of buildings or property within buildings only if the roof or an outside wall is damaged by the falling object; and property outside of buildings. Damage by a dropped or falling object within a building, such as a chandelier falling on the table below it, or a heavy object accidentally dropped on a piece of furniture, does not come within the scope of this peril. Also excluded is damage to the falling object itself. If a meteorite comes through the roof and damages the roof and the coffee table, then damage to both is covered.
11.Weight of Ice, Snow or Sleet
This peril means weight of ice, snow or sleet which causes damage to (forms HO 00 02 and HO 00 06: “a building or”) property contained in the building.
(Forms HO 00 02 and HO 00 06: “This peril does not include loss to an awning, fence, patio, pavement, swimming pool, foundation retaining wall, bulkhead, pier, wharf, or dock.”)
Analysis
The named peril applicable to contents in forms HO 00 03 and HO 00 04 covers loss to covered property from weight of ice, snow, or sleet “which causes damage to property contained in a building.” In forms HO 00 02 and 00 06, coverage applies to the weight of ice, snow, or sleet “which causes damage to a building or property contained in a building.” Forms HO 00 02 and HO 00 06 exclude coverage for damage by this peril to awnings, fences, patios, pavements, swimming pools, foundations, retaining walls, bulkheads, piers, wharves, and docks. Form HO 00 03 excludes coverage for pressure or weight of water or ice (but not snow or sleet) on those items of property, except for awnings.
Before the introduction of the “collapse” definition in the additional coverage, the inclusion of this peril was less apparent. If “collapse” could mean structural impairment, then weight of ice or snow that caused a roof to sag could just as easily fall under that additional coverage. Now, with the definition limiting “collapse” to “an abrupt falling down,” an insured sustaining damage such as a sagging roof will find the coverage under this named peril.
12.Accidental Discharge or Overflow of Water or Steam
a.This peril means accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance. (Form HO 00 02: “We also pay to tear out and replace any part of the building, or other structure, on the “residence premises”, but only when necessary to repair the system or appliance from which the water or steam escaped. However, such tear out and replacement coverage only applies to other structures if the water or steam causes actual damage to a building on the “residence premises.” Form HO 00 06: “We also pay to tear out and replace any part of a building or other structure owned solely by you which is covered under coverage A and at the location of the “residence premises.”)
b.This peril does not include loss:
(1)To the system or appliance from which the water or steam escaped; [Form HO 00 02: On the "residence premises," if the dwelling has been vacant for more than 60 consecutive days immediately before the loss. A dwelling being constructed is not considered vacant;]
(2)Caused by or resulting from freezing except as provided in Peril Insured Against 14. Freezing; (Form HO 00 02: To the system or appliance from which the water or steam escaped;)
(3)On the “residence premises” caused by accidental discharge or overflow which occurs off the “residence premises”; or (form HO 00 02: Caused by or resulting from freezing except as provided in Peril Insured Against 14. Freezing;)
(4)Caused by mold, fungus, or wet rot unless hidden within the walls or ceilings or beneath the floors or above the ceilings of a structure. (Form HO 00 02: On the 'residence premises' caused by accidental discharge or overflow which occurs off the 'residence premises'; or (5) caused by mold, etc.)
c.In this peril, a plumbing system or household appliance does not include a sump, sump pump or related equipment or a roof drain, gutter, downspout or similar fixtures or equipment.
d.Section I — Exclusion A.3. (forms HO 00 02 and HO 00 06: “Exclusion 3.”) Water Damage, paragraphs a. and c. that apply to surface water and water below the surface of the ground do not apply to loss by water covered under this peril (forms HO 00 02 and HO 00 06: “peril 12″).
Analysis
The use of from within a plumbing system has led to some confusion, some suggesting that the peril applies only to loss from within a pipe or appliance. If this were the case, there would be no need for the word overflow, which cannot apply simply to a leaking pipe. Many parts of a plumbing system can overflow — toilets, tubs, and shower pans among them. A “plumbing system” includes fixtures as well as pipes; else it would not be a “system.” Overflow or accidental discharge thus encompasses a variety of accidents that may befall household plumbing.
The peril includes coverage for the cost to tear out and replace any part of the building or an other structure on the residence premises if it is necessary to do so in order to repair the system or appliance from which the water or steam escaped. However, in order for the cost of tear-out of an other structure to be covered, the water or steam must actually damage a covered building. Say that a water pipe that services the residence dwelling runs under a drive and walk. If the water pipe ruptures and damages the dwelling, the cost to get at the pipe—digging up the walk and drive—is covered. Remember that the coverage for tear out is found as an exception to the coverage A exclusions in form HO 00 03. See Homeowners Exclusions.
Coverage exists for mold, fungus or wet rot as long as the damage is hidden within the walls, ceilings, or beneath the floors of a structure. An accidental discharge from a plumbing, heating, or air conditioning system or household appliance must cause the damage.
The form also makes clear that water damage resulting from a leaking pipe that is located beneath a slab foundation should not be construed as excluded by section I exclusion 3. water damage—surface water or water below the surface of the ground. It remains to be seen whether this provision of coverage will provide coverage if the water causes soil compaction (earth movement) under a slab, with the result that the dwelling sustains cracks. The exclusion for damage resulting from earth movement is prefaced by the nonconcurrent causation language, and includes damage caused by human forces, which would include the leaking pipe. See Homeowners Exclusions.
The following limitations apply to the coverage provided for losses from the accidental discharge peril. There is no coverage for loss on the residence premises if the dwelling (“unit” under form HO 00 06) has been vacant for more than 60 consecutive days preceding the loss. A building (unit in form HO 00 06) under construction is exempt. Forms HO 00 03 and HO 00 04 do not contain this coverage limitation, perhaps because the named perils in those forms apply only to contents.
Loss to the system or appliance involved in the loss is excluded. However, in some cases these types of losses are covered by one of two other named perils discussed later—heating or air conditioning system damage, or freezing of plumbing.
Loss caused by freezing is excluded; however, freezing of plumbing, etc., is the subject of a separate named peril.
Accidental discharge or overflow off-premises that causes loss to insured property on the residence premises is excluded. In forms HO 00 04 and HO 00 06 this restriction applies only to accidental discharge occurring away from the building where the residence premises are located. Therefore, coverage applies to loss to the insured's unit as a result of accidental discharge from another apartment or condominium unit in the same building. In form HO 00 03 this exclusion applies only to contents. There is coverage for the dwelling or other structures resulting from accidental discharge from within a storm drain, or water, steam, or sewer pipe off the residence premises.
The accidental discharge peril states that a plumbing system does not include sumps, sump pumps or any related equipment. The intent is to exclude from accidental discharge coverage water losses that are caused by sump pump malfunction. But a sump pump, even if a permanently installed part of the drainage system, may sometimes be considered a “household appliance” (even as a “permanently installed” automatic washer or dishwasher is a household appliance) rather than a part of the plumbing system. That a sump pump is an “appliance” was the finding in Stone v. Royal, 511 A.2d 717 (New Jersey, 1986). Here a portable sump pump was found to be “no less an appliance than a dehumidifier or a washing machine.” The appellate court held that water damage resulting from the rupture of the sump pump's hose was covered as discharge from an appliance rather than discharge from the plumbing system, reasoning that would apply even with the revised policy language.
Coverage is also precluded under this peril for water damage resulting from gutters or downspouts. Webster's Collegiate Dictionary defines “plumbing” as: “the apparatus (as pipes and fixtures) concerned in the distribution and use of water in a building.” Gutters, drains, and downspouts are concerned with removing water from the outside of a building, and thus fall outside this definition.
13.Sudden and Accidental Tearing Apart, Cracking, Burning or Bulging
This peril means sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system, an air conditioning or automatic fire protective sprinkler system, or an appliance for heating water
We do not cover loss caused by or resulting from freezing under this peril. (forms HO 00 02 and HO 00 06: “This peril does not include loss caused by or resulting from freezing except as provided in Peril Insured Against 14. Freezing below.”)
Analysis
Coverage under this peril is for “sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system, an air conditioning or automatic fire protective sprinkler system, or an appliance for heating water.” Loss that results from freezing is not covered under this peril. Unlike the accidental discharge peril, this peril covers rather than excludes damage to the system or appliance itself.
14.Freezing
a.This peril means freezing of a plumbing, heating, air conditioning or automatic fire protective sprinkler system or of a household appliance but only if you have used reasonable care to:
(1)Maintain heat in the building; or
(2)Shut off the water supply and drain the system and appliances of water.
However, if the building is protected by an automatic fire protective sprinkler system, you must use reasonable care to continue the water supply and maintain heat in the building for coverage to apply.
b.In this peril, a plumbing system or household appliance does not include a sump, sump pump or related equipment or a roof drain, gutter, downspout or similar fixtures or equipment.
Analysis
Both the accidental discharge peril and the rupture of heating or air conditioning systems peril exclude loss by freezing, “except as provided in the peril of freezing.” This peril provides the coverage eliminated by those exclusions with respect to plumbing, heating, air conditioning, automatic sprinkler systems, and household appliances. The freezing peril appears in two parts of form HO 00 03. Coverage for the dwelling and other structures is provided through exceptions to the freezing exclusion in “section I — perils insured against,” and the named peril applies to personal property under the same heading.
In order for coverage to apply, the heat must either be left on in the building or the water supply must be shut off and water drained from the system. If there is an automatic sprinkler system, then the water and the heat must be left on.
What constitutes reasonable heat being left on is a common question. While the policy doesn't give any indication, heating professionals recommend leaving the heat no lower than 55 degrees. Otherwise, freezing may occur, even if the heat is set above the 32 degree freezing mark.
Questions often arise as to what degree of “unoccupancy” was required to trigger the exclusion, particularly with regards to those insureds who reside at one location in the summer and another in the winter. These insureds must, as indeed must all insureds, now shut off and drain plumbing systems or maintain heat as required no matter how long they are away from the premises.
But with “vacant or unoccupied” no longer applying to the dwelling, and the requirement to maintain heat or shut off the water supply in “the building,” any other structure on the insured premises that is a building falls under this peril.
15.Sudden and Accidental Damage from Artificially Generated Electrical Current
This peril does not include loss to tubes, transistors, electronic components or circuitry that are a part of appliances, fixtures, computers, home entertainment units or other types of electronic apparatus.
Analysis
The term “artificially generated” needs clarification. It means any electrical current other than naturally generated electrical charges such as lightning or static electricity. Any electronic components or circuitry that form a part of the enumerated items are not covered. This provides limited coverage. With the electronic components or circuitry excluded, what's left of any value to the property? The computer, DVD player, and television are all about the electronics. With the electronics excluded, all that's really covered is the housing for the equipment, which is not of great value.
16.Volcanic Eruption
This peril does not include loss caused by earthquake, land shock waves or tremors.
Analysis
This named peril was introduced in the 1984 forms edition as a result of the Mt. St. Helens eruption. This disaster focused attention on what had been a recurring question, i.e., whether the explosion peril covered volcanic eruption. Damage caused by volcanic explosion, airborne (as opposed to land) shock waves, volcanic ash, and lava flow are examples of losses covered as volcanic eruption. The section I conditions specify that eruptions that occur within a 72-hour period will be considered as one volcanic eruption; this limits the insured's retention to one deductible, but also applies one coverage limit to all damage done within this time period. As stated in the earth movement exclusion as well, there is no coverage for damage done by earthquake, land shock waves or tremors.