Includes copyrighted material of Insurance Services Office, Inc., with its permission.
June 26, 2014
Basic, Broad and Special Forms
Summary: The perils insured against in the dwelling property forms of Insurance Services Office parallel those found on basic form HO 00 01 (now withdrawn), broad form HO 00 02, and special form HO 00 03 of ISO's homeowners program. The general exclusions, virtually identical in all three dwelling forms, are reworded versions of the exclusions traditionally found in property insurance. They, too, closely resemble the general exclusions of the homeowners policies. ISO has revised the dwelling forms effective July 1, 2014. This discussion explores the differences between the perils and general exclusions of the two programs and indicates where the provisions of the Dwellings 2014 forms differ from the earlier forms.
Additionally, miscellaneous property coverage endorsement are described.
Topics covered:
ISO has filed a new dwelling property program effective July 1, 2014. Caution is advisable before assuming the forms have been approved and implemented in a particular state. Many of the changes are similar to those implemented in the homeowners 2011 program, so for additional information consult the homeowners discussions.
Perils Insured Against
We insure for direct physical loss to the property covered caused by a peril listed below unless the loss is excluded in the General Exclusions.1A. Fire Or Lightning
1B. Internal Explosion
a. Internal explosion means explosion occurring in the dwelling or other structure covered on the Described Location or in a structure containing personal property covered.
b. Explosion does not mean:
(1) Electric arcing;
(2) Breakage of water pipes; or
(3) Breakage or operation of pressure relief devices.
This perils does not include loss by explosion of steam boilers, or steam pipes, if owned or leased by you or operated under your control.
Analysis
Dwelling form DP 00 01 07 14 presents the insured with a limited selection of covered perils, i.e., fire or lightning and internal explosion. These perils have not changed from the 2002 form.
The peril of internal explosion is unique to form DP 00 01. It encompasses any explosion that takes place in an insured structure or in a structure containing covered personal property. Internal explosion is a broad term, but note that it does not mean electric arcing, breakage of water pipes, or breakage or operation of pressure relief devices. In the case of Gagnon v. Allstate Ins. Co., 1993 Me. Super LEXIS 31, when the insured's' washing machine hose ruptured, resulting in an escape of hot water and steam, they attempted to find coverage under the peril of explosion. Explosion was not defined in the policy in question, so the court said that the "sudden release or sudden propulsion of substance from within" qualified as an explosion, and so there was coverage. But here, by defining what explosion is not, the language should serve to clarify what explosion is.
Explosion does not include coverage for loss to any property by explosion of steam boilers or steam pipes owned, leased, or operated by the named insured.
Extended coverage and vandalism or malicious mischief may be purchased as options. Coverage for the following named perils is thus included when indicated on the declarations, and a premium charged.
When a premium for Extended Coverage is shown in the Declarations, Perils 2. through 8. are made part of Perils Insured Against.
2.Windstorm Or HailThis peril does not include loss:
a.To the inside of a building or the 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; or
b.To the following property when outside of the building:
(1)Awnings, signs, radio or television antennas or aerials including lead-in wiring, masts, or towers; or
(2)Canoes and rowboats.
3.Explosion
This peril does not include loss by explosion of steam boilers or steam pipes, if owned by you or operated under your control.
Explosion does not mean:
a.Electric arcing;
b.Breakage of water pipes
c.Breakage or operation of pressure relief devices.
This peril replaces Peril 1B.
4.Riot Or Civil Commotion
5.Aircraft
This peril includes self-propelled missiles and spacecraft.
6.Vehicles.
This peril does not include loss caused by:
a.A vehicle owned or operated by you or a resident of the Described Location; or
b.Any vehicle to fences, driveways and walks.
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 fireplaces or from agricultural smudging or industrial operations.
8.Volcanic Eruption
This peril does not include loss caused by earthquake, land shock waves, or tremors.
When a Premium for Vandalism or Malicious Mischief is shown in the Declarations, the following is made part of the Perils Insured Against.
9.Vandalism Or Malicious Mischief
This peril does not include loss:
a.To glass or safety glazing material constituting a part of the building other than glass building blocks
b.By pilferage, theft, burglary or larceny, but we will be liable for damage to the building covered caused by burglars; or
c.To property on the Described Location, 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
The effect of adding extended coverage is not only the addition of the perils of windstorm or hail, riot or civil commotion, aircraft, vehicles, and smoke, but the expansion of internal explosion. The difference is that the explosion peril insures loss to covered property resulting from explosion occurring within or without the building. As with the peril of internal explosion, however, loss to any property by explosion of steam boilers or steam pipes owned, leased, or operated by the named insured is excluded. (Steam boiler explosion is insured against under the explosion peril in forms DP 00 02 07 14 and DP 00 03 07 14 and on homeowners forms.)
The dwelling forms exclude awnings, signs, antennas, rowboats and canoes from coverage under the windstorm peril when any of them are located outside of a building. The homeowners forms exclude coverage only for watercraft of all types (and their trailers, motors, and their equipment) unless this property is in a fully enclosed building. Also, one of the general exclusions in DP 00 01 denies coverage for loss by all perils to lawns, plants, shrubs, or trees located outside of buildings. Coverage may be added with endorsement DP 04 17 12 02.
The peril of smoke has been amended to include furnace puffback, similarly to the homeowners 2000 and 2011 forms. Previously, coverage was sometimes denied based on the exclusion for mechanical breakdown. The peril includes fumes or vapors, coverage for which might also have been precluded under the pollution exclusion. Note, however, that the peril does not encompass smoke from a fireplace.
The final option under the basic dwelling form is vandalism and malicious mischief coverage. As with extended coverage, the insured must pay an extra charge and the policy declarations are marked to show that this coverage is in effect.
The vandalism or malicious mischief peril in form DP 00 01 contains two exclusions not present in the homeowners forms: 1) there is no insurance against damage to glass (other than glass building blocks) constituting a part of a building and 2) loss by pilferage, theft, burglary or larceny—except building damage caused by burglars—is excluded.
Vandalism and malicious mischief coverage also does not apply if the dwelling has been vacant for more than sixty consecutive days prior to a loss. Note, however, that a dwelling under construction is specifically not considered vacant.
The form includes a notation that following the sixty days there is no coverage for any ensuing loss caused by any intentional and wrongful act committed in the course of the vandalism. The reason for this is that some courts have held that because other covered perils, such as fire, have no time restrictions, a fire arising out of vandalism should be covered even beyond the time limitation.
For additional information on these perils, see Questions of Coverage for Certain Named Perils.
The broad form DP 00 02 07 14 expands the perils coverage of DP 00 01 to include seven additional perils. The comments that follow describe the broad named perils as they appear on form DP 00 02, the changes from the previous forms, and any variations as to the same perils on the comparable broad form homeowners policy.
9.Damage by Burglars
This peril means damage to covered property caused by burglars.This peril does not include:
a.Theft of property; or
b.Damage caused by burglars to property on the Described Location if the dwelling has been vacant for more than 60 consecutive days immediately before the damage occurs. A dwelling being constructed is not considered vacant.
10.Falling Objects
This peril does not include loss:
a.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.
b.To outdoor radio and television antennas and aerials including their lead-in wiring, masts and towers, outdoor equipment, awnings and fences.
Damage to the falling object itself is not covered.
11.Weight Of Ice, Snow or Sleet
This peril means weight of ice, snow or sleet which causes damage to a building or property contained in the building.
This peril does not include loss to an awning, fence, patio, pavement, swimming pool, foundation, retaining wall, bulkhead, pier, wharf or dock.
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. We also pay to tear out and replace any part of a building or other structure on the Described Location, 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 Described Location.
b.This peril does not include loss:
(1)To a building caused by constant or repeated seepage or leakage over a period of weeks, months or years;
(2)On the Described Location, if the dwelling has been vacant for more than 60 consecutive days immediately before the loss. A dwelling being constructed is not considered vacant;
(3)To the system or appliance from which the water or steam escaped;
(4)Caused by or resulting from freezing except as provided in Peril Insured Against 14. Freezing below; or
(5)On the Described Location caused by accidental discharge or overflow which occurs off the Described Location.
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.General 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 12.
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.
This peril does not include loss caused by or resulting from freezing except as provided in Perils Insured Against 14. Freezing below.
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 all systems 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.
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.
16.Volcanic Eruption
This peril does not include loss caused by earthquake, land shock waves or tremors.
Analysis
Damage to a covered building or structure by burglars is insured through the vandalism or malicious mischief peril on form DP 00 01. The same coverage is listed as a separate peril on form DP 00 02, insuring damage by burglary to covered property. Coverage does not apply to property taken by burglars (under the dwelling property program, this coverage may be added by endorsement. See Dwelling Theft Coverage. Further, there is no coverage for loss on the described location following sixty days of consecutive vacancy.
Each of the homeowners forms includes coverage for the broader peril of theft for both building and personal property with certain exclusions regarding dwellings under construction, rental property, and the following items while off the residence premises: personal property of students, watercraft, trailers, and campers. Damage done by burglars falls under the vandalism or malicious mischief peril.
Unlike the homeowners forms, the peril of falling objects precludes coverage for loss to outdoor antennas, outdoor equipment, awnings, or fences. Both dwellings and homeowners forms state that the falling object must first damage the outside of the building before there is coverage for property contained in the building.
The peril of accidental discharge includes the cost to tear out and replace an other structure (such as a drive or walkway) on the described location if necessary to repair a plumbing system or appliance, but only if water or steam from the system or appliance damages a building on the described location. The wording makes it clear that gutters, downspouts, drains, or sump pumps are not considered either plumbing systems or household appliances, and so the peril does not encompass damage caused by accidental discharge or overflow of water from them. Wording clarifies that two parts of the general exclusion for water damage—surface water and water below the surface of the ground—do not apply to loss caused by water covered under this peril. Previously, conflicts of interpretation arose because many dwellings have plumbing systems with pipes running below the surface of the ground.
The accidental discharge peril differs from its homeowners counterpart in that loss caused by constant or repeated seepage or leakage is excluded. This exclusion was removed from the homeowners forms with the 1991 edition.
The peril of freezing requires that if a dwelling has an automatic sprinkler system, the insured must use "reasonable care" to continue the water supply and maintain heat. In earlier forms, the admonition to provide heat or to drain the plumbing system applied only if the dwelling was vacant. Now, however, whether the dwelling is vacant, occupied or unoccupied the insured must still maintain heat or drain the system (provided there is no sprinkler system). Similarly to the peril of accidental discharge, this peril does not include a drain, gutter, downspout, or sump pump as part of the plumbing system.
The wording of the artificially generated electric current peril reflects the changes in household appliances, TVs, VCRs, computers, and other electronic gadgets. Note that the electronic components or circuitry are not covered under this peril; so what is? The housing, knobs, buttons, and other components are what are covered. This is very limited coverage, and is not designed to provide for delicate electronics easily damaged by a spark or surge in electricity.
A. Coverage A—Dwelling And Coverage B—Other Structures
1.We insure against risk of direct loss to property described in Coverages A and B.2.We do not insure, however, for loss:
a.Excluded under General Exclusions;
b.Involving collapse, including any of the following conditions of property or any part of the property:
(1)An abrupt falling down or caving in;
(2)Loss of structural integrity, including separation of parts of the property or property in danger of falling down or caving in; or
(3)Any cracking, bulging, sagging, bending, leaning, settling, shrinkage or expansion as such condition relates to (1) or (2) above;
except as provided in Other Coverage 10.
Collapse; or
c.Caused by:
(1)Freezing of a plumbing, heating, air conditioning or automatic fire protective sprinkler system or of a household appliance, or by discharge, leakage or overflow from within the system or appliance caused by freezing. This provision does not apply if you have used reasonable care to:
(a)Maintain heat in the building; or
(b)Shut off the water supply and drain all systems 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.
For purposes of this provision 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.
(2)Freezing, thawing, pressure or weight of water or ice, whether driven by wind or not, to a:
(a)Fence, pavement, patio or swimming pool;
(b)Footing, foundation, bulkhead, wall, or any other structure or device that supports all or part of a building or other structure;
(c)Retaining wall or bulkhead that does not support all or part of a building or other structure; or
(d)Pier, wharf or dock;
(3)Theft of property not part of a covered building or structure;
(4)Theft in or to a dwelling or structure under construction;
(5)Wind, hail, ice, snow or sleet to:
(a)Outdoor radio and television antennas and aerials including their lead-in wiring, masts or towers; or
(b)Trees, shrubs, plants or lawns;
(6)Vandalism and malicious mischief, theft or attempted theft, and any ensuing loss caused by any intentional and wrongful act committed in the course of the vandalism or malicious mischief, theft or attempted theft, if the dwelling has been vacant for more than 60 consecutive days immediately before the loss. A dwelling being constructed is not considered vacant;
(7)Constant or repeated seepage or leakage of water or steam over a period of weeks, months or years from within a plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance;
For purposes of this provision, 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.
(8)Any of the following:
(a)Wear and tear, marring, deterioration;
(b)Mechanical breakdown, latent defect, inherent vice, or any quality in property that causes it to damage or destroy itself;
(c)Smog, rust or other corrosion, mold, wet or dry rot;
(d)Smoke from agricultural smudging or industrial operations;
(e)Discharge, dispersal, seepage, migration, release or escape of pollutants unless the discharge, dispersal, seepage, migration, release or escape is itself caused by a Peril Insured Against under coverage C of this policy.
Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed;
(f)Settling, shrinking, bulging or expansion, including resultant cracking, of bulkheads, pavements, patios, footings, foundations, walls, floors, roofs or ceilings; or
(g)Birds, rodents, insects or domestic animals; or
(h)Nesting or infestation, or discharge or release of waste products or secretions, by any animals.
Exception To c.(8)
Unless the loss is otherwise excluded, we cover loss to property covered under coverage A or B resulting from an accidental discharge or overflow of water or steam from within a:
(i)Storm drain, or water or sewer pipe, off the Described Location; or
(ii)Plumbing, heating, air conditioning or automatic fire protective system or household appliance on the Described Location. This includes the cost to tear out and replace any part of a building, or other structure, on the Described Location, but only when necessary to repair the system or appliance. 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 Described Location.
We do not cover loss to the system or appliance from which this water or steam escaped.
For the purposes of this provision, a plumbing system or household appliance does not include a sump, sump pump or related equipment; or roof drain, gutter, down spout or similar fixtures or equipment.
General Exclusion A.3. Water Damage, Paragraphs a. and c. that apply to surface water and water below the surface of ground do not apply to loss by water covered under c.(8) above.
Under 2b. and c. above, any ensuing loss to property described in Coverages A and B not excluded or excepted in this policy is covered.
Analysis
Special form DP 00 03 07 14 insures dwellings, other structures, and any other property that qualifies under coverage A or coverage B on an open perils basis subject to the listed exclusions. Personal property is insured for the broad named perils of form DP 00 02, with exceptions as noted.
However, there are differences between the forms. The dwelling form excludes damage to antennas, aerials, trees, shrubs, and plants from wind, hail, ice, snow, and sleet. The HO 00 03 form does not exclude these types of losses to antennas and aerials.
Collapse has been clarified by defining it as an abrupt falling down or caving in, loss of structural integrity, or cracking, bulging, settling or shrinking unless coverage is provided in the special collapse coverage section. Determining what exactly is a collapse has been as issue over the years; is a sagging ceiling collapsed, even though nothing has fallen? If a floor is sagging but the insured still uses it, has it collapsed? The new language clarifies that in order for something to be considered a collapse the property must have fallen down or caved in, and not just be in danger of such. Items in danger of collapsing are maintenance items the insured should tend to.
Dwelling form DP 00 03 contains an exclusion for vandalism, malicious mischief, theft or attempted theft to a dwelling that has been vacant for more than sixty days. Theft of property not part of a covered building is excluded altogether. Homeowners forms include theft coverage for buildings and personal property. Theft coverage for personal property may be added by endorsement to the dwelling property forms. And, as indicated earlier, any ensuing loss caused in the course of the vandalism after the vacancy limitation is also excluded.
The exclusion within broad form DP 00 02 of physical damage to property on the described location caused by an accidental discharge or overflow occurring off premises (overflow of a neighbor's plumbing or a broken water main, for instance) not only does not occur as respects coverages A and B in the special form, but is, in the new DP 00 03, explicitly covered.
The form adds language stating that accidental discharge or overflow of water from a gutter or downspout will not be considered as originating from a plumbing system. However, by so stating, it now appears that what was once covered will now be excluded. In the earlier forms, there was no preclusion of coverage, so that if a gutter overflowed or backed up, forcing water into the dwelling, there was coverage for damage to the interior. But now, with the addition of the new language in both this and the peril of freezing, it is possible that coverage heretofore provided will be denied.
The 2014 form removes vermin from the excluded perils, and adds an exclusion for nesting or infestation, or discharge or release or waste products or secretions of animals. Vermin is an ambiguous term, and has caused much confusion over the years. Therefore that term has been removed, and the exclusion is clarified to include nesting and waste products caused by any animals. This ensures that damage caused by bats, raccoons and other animals that may nest in the attic is excluded, whether or not they fit the scientific classification of rodents.
A. We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area.1.Ordinance Or Law
Ordinance Or Law means any ordinance or law:
a.Requiring or regulating the construction, demolition, remodeling, renovation or repair of property, including removal of any resulting debris. This Exclusion A.1.a. does not apply to the amount of coverage that may be provided under Other Coverage 12. Ordinance Or Law;
b.The requirements of which result in a loss in value to property; or
c.Requiring you or others to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, pollutants.
Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.
This exclusion A.1. applies whether or not the property has been physically damaged.
2.Earth Movement
Earth Movement means:
a.Earthquake including land shock waves or tremors before, during or after a volcanic eruption;
b.Landslide; mudslide or mud flow;
c.Subsidence or sinkhole; or
d.Any other earth movement including earth sinking, rising or shifting;
This Exclusion A.2. applies regardless of whether any of the above, in A.2.a. through A.2.d., is caused by an act of nature or is otherwise caused.
However, direct loss by fire or explosion resulting from any of the above, in A.2.a. through A.2.d., is covered.3.
Water Damage
Water Damage means:
a.Flood, surface water, waves, including tidal wave and tsunami, tides, tidal water, overflow of any body of water or spray from any of these, all whether or not driven by wind, including storm surge;
b.Water which:
(1)Backs up through sewers or drains; or
(2)Overflows or is otherwise discharged from a sump, sump pump or related equipment;
c.Water below the surface of the ground, including water which exerts pressure on, or seeps, leaks or flows through a building, sidewalk, driveway, patio, foundation, swimming pool or other structure; or
d. Waterborne material carried or otherwise moved by any of the water referred to in A.3.a. through A.3.c. of this exclusion.
This Exclusion A.3. applies regardless of whether any of the above, in A.3.a. through A.3.d., is caused by an act of nature or is otherwise caused.
This Exclusion A.3. applies to, but is not limited to, escape, overflow or discharge, for any reason, of water or waterborne material from a dam, levee, seawall or any other boundary or containment system.
However, direct loss by fire or explosion resulting from any of the above, in A.3.a. through A.3.d., is covered.
4.Power Failure
Power Failure means the failure of power or other utility service if the failure takes place off the Described Location. But if the failure of power or other utility service results in a loss, from a Peril Insured Against on the Described Location, we will pay for the loss caused by that Peril Insured Against.
5.Neglect
Neglect means your neglect to use all reasonable means to save and preserve property at and after the time of a loss.
6.War
War includes the following and any consequences of any of the following:
a.Undeclared war, civil war, insurrection, rebellion or revolution;
b.Warlike act by a military force or military personnel
c.Destruction or seizure or use for a military purpose.
Discharge of a nuclear weapon will be deemed a warlike act even if accidental.
7.Nuclear Hazard
This Exclusion A.7. pertains to Nuclear Hazard to the extent set forth in the Nuclear Hazard Clause of the Conditions.
8.Intentional Loss
Intentional Loss means any loss arising out of any act you or any person or organization named as an additional insured commits or conspires to commit with the intent to cause a loss.
In the event of such loss, neither you nor any such person or organization is entitled to coverage, even those who did not commit or conspire to commit the act causing the loss.
9.Governmental Action
Governmental Action means the destruction, confiscation or seizure of property described in A, B or C by order of any governmental or public authority.
This exclusion does not apply to such acts ordered by any governmental or public authority that are taken at the time of a fire to prevent its spread, if the loss caused by fire would be covered under this policy.
B. We do not insure for loss to property described in Coverages A and B caused by any of the following. However, any ensuing loss to property described in Coverages A and B not excluded or excepted in this policy is covered.
1.Weather conditions. However, this exclusion only applies if weather conditions contribute in any way with a cause or event excluded in A. above to produce the loss.
2.Acts or decisions, including the failure to act or decide, of any person, group, organization or governmental body;
3.Faulty, inadequate or defective;
a.Planning, zoning, development, surveying, siting;
b.Design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction;
c.Materials used in repair, construction, renovation or remodeling; or
d.Maintenance;
of part or all of any property whether on or off the Described Location.
Analysis
The general exclusions found in the basic, broad, and special forms apply to all insured perils unless the policy states otherwise. All three forms contain the nine general exclusions quoted above. They are prefaced with what has become the standard language to address potential concurrent causation situations. It states that if an excluded peril applies to a loss—regardless of other events that contribute before, during, or after the loss—no payment is made.
As is usual in property insurance, the dwelling forms exclude any loss that might arise from "any ordinance or law requiring or regulating the construction, demolition, remodeling, renovation or repair of property, including removal of any resulting debris" other than that provided in other coverage 12.
By adding building ordinance or law coverage endorsement DP 04 74 12 02, form DP 00 01 can be amended to nullify the ordinance or law exclusion to cover increased construction costs or demolition. Endorsement DP 04 71 12 02 may be used to purchase an increased amount of coverage under forms DP 00 02 and DP 00 03.
Only direct loss by fire or explosion resulting from earth movement is covered. The 2014 form now states that the exclusion applies whether any loss is caused by an act of nature or any other cause; the old form stated human or animal forces, or any act or nature. The revised wording broadens the exclusion to cover anything possible that could cause earth movement, from fracking to meteors. Coverage against earthquake is available by adding endorsement DP 04 69 12 02. Coverage under the endorsement also applies to damage caused by land shock waves associated with volcanic action. Coverage does not include the cost of filling land. The base deductible is five percent of the limit of liability for each coverage, subject to a minimum of $250. The deductible does not apply to coverages D and E (additional living expense and fair rental value). Instead, the deductible applies to the limit of liability of coverage A, B or C, whichever is greatest. All earthquake shocks that occur within a seventy-two hour period are considered a single earthquake.
Loss by flood, sewer backup, or below-surface water is excluded; ensuing direct loss by fire or explosion is covered. See Water Exclusion Clause pages for further discussion of this standard property insurance exclusion. The 2014 has included tsunami and storm surge, whether or not driven by wind in excluded causes of loss. Likewise waterborne material carried by any of the excluded water sources is excluded, and all causes are excluded whether caused by nature or other causes. Also excluded is water escaping, overflowing or discharging from a dam, levee, seawall or other containment system. After Hurricane Katrina and the problems with the levees overflowing, the exclusion was changed to be sure that such perils were excluded.
Loss attributable to off-premises interruption—for example, spoilage of refrigerated food caused by a blackout—is excluded. If, however, the off-premises power interruption results in loss by a covered peril—freezing of plumbing under form DP 00 02, for example—there is coverage for loss caused by that peril. The exclusion does not apply to loss by power interruption originating from damage on the insured premises caused by a peril insured against.
The policy does not cover loss resulting from the named insured's neglect to attempt to save and preserve property at and after the time of loss.
For a discussion of the war exclusion, a common feature in most property insurance policies, see War Exclusion Clause.
For a discussion of the standard nuclear hazard exclusion, see Nuclear Exclusion Clauses.
The intentional loss exclusion is added to the dwelling property forms for the purpose of addressing the issue of arson by insureds, although, of course, the clause does not single out arson.
New in the forms is exclusion 9. governmental action. An insured cannot claim, for example, that property seized as part of a drug operation was stolen by the government and seek insurance coverage. The exclusion does not apply if the property is seized or destroyed to prevent the spread of a fire, but only if the loss caused by a fire would be covered under the policy. Thus, an insured arsonist whose property is seized to prevent the spread of a fire he or she started could not claim coverage.
Both the basic and special dwelling forms each contain one general exclusion not found in the other forms. In basic form DP 00 01, an exclusion eliminates coverage altogether for lawns, plants, shrubs, or trees outside of buildings. Coverage for this exposure may be added to the basic form by endorsement DP 04 17 12 02. Special dwelling form DP 00 03 contains the exclusion (B.) found in other special perils forms excluding losses due to weather conditions, acts or decisions, and faulty planning, design, or materials. But if an ensuing loss results that is not excluded, that loss is covered. The weather conditions exclusion applies only if it contributes with a cause or event excluded in exclusion A.
Special provisions DP 01 XX. Some state mandated changes remain, notably in cancellation and nonrenewal provisions, and they are the subject of this endorsement. (XXs represent the separate identification number assigned to each state.)
Automatic increase in insurance DP 04 11 12 02. This endorsement is used to provide an annual increase of 4, 6, or 8 percent in coverages A and B of the dwelling property forms.
Additional insured DP 04 41 12 02. Persons or organizations with insurable interests in the described location may be named as additional insureds on this endorsement.
Premises alarm or fire protection systems DP 04 70 12 02. Dwellings with approved and properly maintained installations of alarms or fire protection systems are eligible for a reduced rate. Such devices or systems must be listed on this endorsement.
Building ordinance or law coverage DP 04 71 12 02. This endorsement provides additional coverage for losses resulting from ordinance or laws regulating construction, repair, or demolition of property. Coverage applies to covered dwellings, other structures, unit-owner building items, or improvements, alterations and additions. DP 04 74 12 02 may be used to add this coverage to the DP 00 01.
Sinkhole collapse DP 04 99 12 02. This endorsement adds coverage for losses arising from the sudden settlement or collapse of earth resulting from "subterranean voids created by the action of water on limestone or similar rock formations."
Dwelling under construction DP 11 43 12 02. This endorsement is attached when the intended occupant of the dwelling under construction is the named insured. Contractors may be added as additional insureds using endorsement DP 04 41, described above. The limit of liability for a dwelling under construction is provisional. At the time of a loss, the applicable limit is a percentage of the provisional limit, based on the proportion of actual value of the property at the time of loss. Premium is sixty-five percent of the completed value premium.
When the intended occupant of the dwelling under construction is not the named insured, this endorsement is not used. Instead, the policy declarations specify that the dwelling is under construction and permission has been granted for its completion. There is no reduction in premium. The completed value premium applies.
Functional replacement cost loss settlement DP 05 30 07 14. This endorsement may be attached to forms DP 00 02 or DP 00 03. Provided that the amount of insurance on a damaged building is at least eighty percent of the functional replacement cost immediately before the loss, loss settlement will be the lesser of the limit of liability applying to the property, or the amount necessarily spent to repair or replace using functionally equivalent methods and materials.
Assisted living care coverage DP 04 59 07 14. Like the homeowners 2000 program, it is now possible for an insured to extend personal property and additional living expense coverage to a related person regularly living in an assisted care living facility. Basic limits are $10,000 coverage C, and $6,000 (at $500 per month) for additional living expenses.
Water back up and sump overflow DP 04 95 07 14. Coverage subject to a limit of $5,000 and a $250 deductible may be added with this endorsement.
Owned motorized golf cart—physical loss coverage DP 05 28 07 14. Coverage may be added for physical loss to a motorized golf cart, including permanently installed accessories, equipment and parts, owned by the insured. An additional ten percent of the limit applying to the highest scheduled cart applies to accessories or equipment designed or made solely for the cart that is not permanently installed, such as a detachable golf umbrella.
Gravemarkers DP 04 58 12 02. The endorsement provides up to $5,000 coverage for gravemarkers, including mausoleums, on the described location.
Limited Fungi, wet or dry rot, or bacteria coverage DP 04 22 07 14. This endorsement limits the amount of coverage for loss to covered real or personal property damaged by fungi (including mold), wet or dry rot, or bacteria provided the fungi, wet or dry rot, or bacteria results from a covered cause of loss. The basic amount is $10,000; the limit may be increased.