1.ADDITIONAL PROPERTY COVERAGES

 Analysis

 The supplemental coverage section is prefaced by language stating that these coverages do not extend or modify any provisions of the policy except what is specifically described. They are pointed coverages, very specific to particular areas only. Consequential loss coverage provides coverage when loss to cooling, heating, refrigeration, or power equipment causes a consequential loss to other covered property. For example; the hot water heater ruptures damaging the hardwood floor; the loss to the floor is covered as a consequential loss from the hot water heater.

 Trees, plants, shrubs, and lawns are covered from losses caused by fire, lightning, aircraft, riot, civil commotion, vandalism, theft, or vehicles not owned or operated by an occupant of the premises. Note that it is an occupant, not just a resident. If Uncle George drives a rental car into the hedge, there is no coverage. If a neighbor loses control of his vehicle and drives over the lawn and several bushes, coverage is provided up to the limits shown. Property grown or used for business purposes is not covered.

The cost of debris removal is included in the coverage. Of interest is the clause that coverage applies only to items acquired or installed at the insured's expense. While the form states that coverage for trees, plants, shrubs and lawns applies only to items acquired at the insured's expense, MSO has advised that included in this expense are trees, shrubs, plants and lawns acquired when the property itself was purchased. Therefore, there is no gap in coverage for trees and other vegetation.

 The cost to tear out and access an appliance, equipment, pipe, or plumbing system that caused water damage to covered property is covered. The cost to repair the pipe, equipment, plumbing system, or appliance is covered as well. This is significantly different from the ISO policy; that only covers the cost to tear out, and not the cost to repair the pipe or other equipment.

 Analysis

 Collapse is treated separately from other causes of loss. Covered causes of collapse include the coverage C named perils for both buildings and personal property. The 2014 edition of the form adds the collapse of any structural part of a building as part of a covered loss; there no longer has to be a complete collapse of the building, a partial collapse is enough to trigger coverage.

Hidden decay is covered while known decay is not; if the insured knows of decay sufficient enough to allow a building to collapse, the insured has been negligent in maintaining the property. The same applies for damage from insects or vermin—if the insured knows about such damage there is no coverage due to negligence of the insured, but if such damage is hidden there is coverage. 

 Other covered causes of collapse are weight of contents, animals, equipment, or people, weight of rain that collects on a roof, or use of defective materials or methods used in construction but only during the construction. Once the construction is completed, collapse due to defective materials or construction is not covered. Note that weight of rain on the roof is a covered cause of collapse but not weight of snow or ice.

 For the named perils causing collapse other than the coverage C perils, coverage for awnings, bulkheads, cesspools, decks, docks, drains, fences, flues, foundations, patios, paved areas, piers, retaining walls, septic tanks, swimming pools, underground pipes, or wharves is available only if the building has collapsed and that collapse caused damage to the other structure.

 Important to this coverage is what is defined as collapse; collapse is defined as the abrupt falling down or caving in of a building or structural parts of a building; this definition is found later on in the in the glossary of the policy.

 3.COMPUTERS, COMPUTER MEDIA, AND COMPUTER SOFTWARE COVERAGE

A.Computers while on the residence premises are covered under the general limit for Coverage C. But, loss to computers while off the residence premises is subject to the limit shown in the applicable coverage form.

B.Coverage C is extended to cover loss to computer software and computer media, up to the limit shown in the applicable coverage form. Coverage applies only to such property customarily kept on the residence premises, or while temporarily at another residence occupied by an insured.

However, coverage is not provided for:

1.Computer software or computer media that cannot be replaced with equivalent property in the current retail market. But, up to 10% of the limit may be applied to cover extra expenses incurred to replace such property.

2.Loss for damage caused by defect, machine error, programming error, or virus.

3.Computer data or for the restoration of lost or damaged computer data.

The limit is an additional amount of insurance.

 This coverage is applicable only if Coverage C applies under this policy and the named insured customarily resides at the residence premises.

Analysis

 Computers while on the residence premises are covered under the full limit of coverage C. If the computers are off the residence premises, coverage is restricted to the limit shown on the MHO 02, MHO 03, MHO 04, MHO 05, or MHO 06, whichever form is attached to the MPL 01. Software and media are covered up to the applicable limit and applies only to property customarily kept on the residence premises or while temporarily at another residence occupied by an insured. For example, if the insured normally keeps a laptop at the residence premise but takes it with him on vacation, the software and games stored on the laptop are covered in event of a loss while the insured is on vacation.

 However, if the software or media is not currently available on the retail market or equivalent media is not available, only 10 percent of the limit can be used to cover extra expenses to replace such property. For example, Ralph has older software that is no longer available; the cost to replace that software is covered only up to 10 percent of the available limit. In the MHO 03, the computer media and software limit is $3000. Therefore Ralph has $300 available to try to replace the lost software. Losses caused by defect, machine error, viruses, or programming errors are not covered. The cost of data or the replacement of data is not covered.

 The special limits as shown in the coverage form are additional amounts of insurance and do not subtract from the overall coverage C limit.

 The coverage is modified in the 2014 form by the addition of language stating that coverage applies only of Coverage C applies under the policy and the named insured customarily resides at the residence premises. If the insured is seldom at the residence, then the risk of theft oor other damage to computer equipment is greater. Therefore coverage will not be provided if the insured does not usually reside in the premises from where the computer was damaged. 

 Analysis

 Coverage is available to the insured for unauthorized use of an ATM or credit card, alteration or forgery of checks, drafts, notes, other negotiable instruments, or the innocent receipt of counterfeit United States or Canadian money by the insured. A defense is provided for the insured for any suit that involves obligations of the insured related to credit cards, ATM cards, altered checks, drafts, or other negotiable instruments. If an insured's check is forged for payment of a diamond ring for $20,000 and the jeweler sues the insured, the policy provides a defense for that insured because of the forged check.

 However, if a resident of the household or a family member causes a loss, any person entrusted with such items such as ATM or credit cards, or business activities of the insured there is no coverage. Unfortunately, it is not unusual for identity theft to be committed by residents of the household. Acts involving one person or in which any one person is implicated are considered a single financial loss with respect to the limit shown. If Cousin Fred repeatedly forges checks with the insured's name on them over the course of six months, all of those events are considered to be part of one loss.

 The special limits as shown in the coverage form are additional amounts of insurance and do not subtract from the overall coverage C limit. The policy deductible does not apply to these losses.

 5.DEBRIS REMOVAL COVERAGE

A.Coverage is provided for necessary reasonable expenses incurred to remove debris of a property loss covered by this policy. If the applicable limit is used up in any one occurrence, then we provide an additional amount of insurance determined by applying the factor shown in the applicable coverage form to the limit of liability shown in the Declarations.

B.This coverage does not apply to lawns and decorative plants, shrubs, and trees. But, coverage is provided for the expenses, not otherwise covered by this policy, that you incur to remove any fallen tree or tree limb that causes damage to other covered property, or that blocks a driveway, sidewalk or handicapped access way at the residence premises. These expenses are covered to the extent of:

1.The specific cost to clear the covered property of such debris.

2.Any other additional cost of removal of such debris.

Our aggregate limit for all such additional costs in any one occurrence is the limit shown in the applicable coverage form. This extension applies only if the tree or tree limb is felled by fire or lightning, aircraft, explosion, riot or civil commotion, theft, vandalism, vehicles not owned or operated by an occupant of the residence premises, wind, or weight of ice, sleet, or snow – to the extent such causes of loss are covered by this policy.

C.We do not cover the cost to remove volcanic ash, dust, or particulate matter that does not cause direct physical damage to covered property.

6.EMERGENCY REMOVAL COVERAGE

Coverage is provided for fortuitous direct physical loss to covered property moved from the residence premises when such property is in danger of loss by a covered cause of loss

described in the applicable coverage form. This extension applies for a period up to 30 consecutive days from the date such removal begins.

 Analysis

 When a covered loss results in debris that must be removed from the property, coverage is provided in the policy. If the cost to remove the debris exceeds the policy limit then an additional amount is available as specified in the coverage form. Debris removal does not apply to lawns, bushes, shrubs or trees except if trees fall and cause damage to property, block a driveway, sidewalk, or handicapped access. The tree must be felled by the listed named perils. If a tree is struck by lightning and hits the house, then the cost to remove the tree is covered here. If the tree just falls in the yard, then there is no coverage, even though lightning, a covered peril, caused the tree to fall. The falling tree damaged no property, therefore no coverage for debris removal.

 The removal of volcanic ash is not covered unless the ash directly causes damage to the property. If enough ash accumulates on the roof of the dwelling to collapse the roof, that is covered. However, if the insured is cleaning ash from the windows and the ash scratches the glass, there is no coverage. It wasn't the ash itself that damaged the windows; it was the action of removing the ash that caused the damage.

 Emergency removal coverage applies when property has been moved from the dwelling to protect it from an impending peril, and while at the second location the property is damaged. For example; the insured moves property from the dwelling because of encroaching wildfires and puts the property in storage a distance away. While in storage a tornado strikes damaging the insured's property. The coverage is available for 30 days from the start of the movement of property.

 If the insured has to pay service charges when the fire department is called these charges are covered up to $500.00. Likewise charges to recharge a used fire extinguisher are covered up to the same amount. No deductible applies to either coverage, and the limits for these coverages are additional amounts of insurance.

 8.LOSS ASSESSMENT COVERAGE

Coverage is provided, up to the limit shown in the applicable coverage form, for your share of any assessments charged collectively against all members by the association, community, or corporation of property owners due to your ownership or occupancy of the residence premises. Coverage applies only when such assessment is made necessary by a loss to the property owned collectively by all members that would be covered by Section I of this policy.

We do not cover assessments charged directly or indirectly by any governmental body.

We cover no more than $1,000 of any assessment that results: from a deductible in the insurance purchased by the association, community, or corporation of property owners; or arises out of the absence of insurance.

A $200 deductible applies. If coverage for earthquake is provided by this policy, the earthquake deductible applies to such loss under this coverage.

The limit is an additional amount of insurance.

9.PORTABLE ELECTRONIC EQUIPMENT, CASSETTE TAPES, COMPACT DISKS, AND OTHER MEDIA COVERAGE

A.Coverage C is extended, up to the limit shown in the applicable coverage form, for loss to:

1.Portable electronic equipment while being temporarily powered by an aircraft, motorized land vehicle or watercraft.

2.Cassette tapes, compact disks, and other media while being used with such equipment.

B.But, coverage is not provided for:

1.Any equipment that is permanently installed in an aircraft, motorized land vehicle, or watercraft.

2.Any equipment that is removable from a housing unit which is permanently installed in an aircraft, motorized land vehicle, or watercraft.

3.Any equipment that is designed to be solely operated from the electrical system in an aircraft, motorized land vehicle, or watercraft.

4.Any equipment designed or used to detect, jam, or locate radar or any other speed measurement devices.

The limit is an additional amount of insurance.

 Analysis

 When the insured is a member of an association, community or corporation of property owners and an assessment is charged to all members, coverage is available up to $5,000. This is the limit shown in the form, and all forms have the same limit. The assessment must be due to a loss that would be covered under this policy. Assessments charged by governmental authorities are not covered. If an assessment is the result of a deductible or lack of insurance held by the community, association or corporation, only $1000 in coverage is available. This coverage carries a distinct $200 deductible, and this coverage limit is additional insurance.

 For example, if the community pool is damaged in a windstorm and the members are each assessed $1000, this policy will pay $800 for the insured since there is a $200 deductible.

 Portable electronic equipment includes CD players, tapes, compact disks, and other media. Because these items are often used in vehicles, the policy has to distinguish when they should be covered by the homeowner's policy and when they would be better covered under the auto policy. Portable equipment is covered while being temporarily powered by an aircraft, motorized land vehicle or watercraft. Note that the equipment is temporarily powered by these vehicles; the equipment is not permanently installed in the vehicles. The insured may be able to plug a portable CD player into the lighter. Tapes, disks and other media are covered while being used with this equipment; the limit is $200. Not covered is permanently installed equipment, equipment that can be removed from a permanent housing, or equipment that is designed to be operated solely from the energy of the vehicles. Some GPS navigation equipment needs vehicle power to be operated. Many are removable from the vehicle as well. Therefore, a GPS device that is not permanently installed in the vehicle but is being charged by vehicle power would be covered. If not plugged in to charge it would not be covered, as it is not using vehicle power.

 Devices that detect or jam speed radar are excluded. The carrier does not condone violating public safety laws. Like many other coverages, this is additional insurance.

 10.WORK INTERRUPTION COVERAGE

 Analysis

 A unique coverage to MSO is the work interruption coverage. If the insured's place of business suffers a loss that causes a temporary shutdown in operations, and the cause of the loss is something that would have been covered under this policy had it happened to the residence, then compensation for the insured's wages up to $2,000 (as indicated in the applicable coverage form) is available. There are of course some exclusions—if the insured owns, financially controls, or is in a partnership with ownership or financial control of the business there is no coverage. If the insured is not a regular full or part time employee, or if the interruption is less than then ten days, or if the business closes permanently or the insured is permanently laid off there is no coverage. Coverage does not apply above 80% of the net wages the insured would otherwise be paid. The coverage is excess over what an insured may receive from the employer, any other insurance or any other source. The limit is additional insurance.

 The 2014 form removes the Special  Condition and adds  section D. Section D. applies to the Work Interruption Coverage, whereas the former Supplemental Coverage applied to sections 3, 4, 9, and 10 of the supplemental coverages. Those coverages are for computer, computer media and software; credit card, forgery, counterfeit money; portable electronic equipment; and work interruption coverage.  Now the restriction that the coverage applies only if coverage C applies to the policy and the named insured customarily resides at the residence premises applies only to work interruption coverage. 

 Section I C – Property Not Covered

 We do not cover the following property except to the extent otherwise specifically provided for in this policy.

 Analysis

 The items and actions listed in this section are excluded from coverage. Under all coverages, land, water, and growing crops outside are excluded. Even the land under the dwelling is not covered. In the 2014 form the earthworks exclusion is reworded for clarity, but the nature of the exclusion is the same. However, crops, lawns, plants and trees are provided coverage if they are within a fully enclosed structure at the residence premises at the time of loss. If the insured is growing orchids in a greenhouse, then there is coverage for those plants, even though any orchids grown outside would not be covered.

 Coverage B deals with other structures and those structures have a separate set of exclusions. Structures used for business, even occasionally, are excluded as are structures designed or used as dwellings, regardless of use. If a second house is on the property but the insured has converted it into a workshop, it is excluded since it was originally designed to be a dwelling. Likewise structures designed for farm use, whether or not they are being used for farming, are excluded. A barn that has been converted into a dance studio is excluded since it was designed for farming. Structures rented or held for rental are excluded unless the structure is used as a garage. It is not uncommon for a detached garage to be converted into a residence and rented out; such structures are excluded.

 Analysis

 This section excludes coverage for certain types of property. Vehicles are naturally excluded because they should be covered under specific vehicle policies, although there is an exception for certain types of watercraft and land vehicles not subject to registration that are used solely to service the residence premises or are designed to assist the handicapped. This language has been changed in the 2014 form and instead of restricting coverage to vehicles servicing the residence premises,  now provides coverage to vehicles servicing the insured premises or any other private residence for which there is no fee or other payment. This broadens coverage significantly, as coverage is now available if the insured takes the riding mower two doors down to help a neighbor mow his yard. In the earlier policy this would not have been covered, but with the change in language, coverage now applies. 

Business property held for sale or delivery, farm property, and creatures are all excluded. The creature exclusion is unique—other policies refer to animals, birds or fish, and while those categories are broad, creatures covers just about anything imaginable, including little green alien beings.

 Computers, media, software, and credit and debit cards are excluded but again, limited coverage is provided by supplemental coverage that was discussed earlier under section I B.

 Property specifically described and insured is not covered. This prevents items that are scheduled with a specific limit and coverages from receiving duplicate coverage. The items could be scheduled under this policy or covered on a separate inland marine policy, but either way this exclusion prevents an insured from collecting twice for the same loss.

 Section I D Losses Not Insured

 We do not insure any sort of damage or loss directly or indirectly, wholly or partially, aggravated by, consisting of, or resulting from, one or more of the following, except to the extent otherwise specifically provided for in this policy. Such loss is not insured whether or not an otherwise covered cause of loss contributes concurrently or in any sequence to the loss.

1.BUILDING LAW EXCLUSION

 Analysis

 Section I D lists causes of loss that are not covered. At the beginning of this section is standard anticoncurrent causation language, which excludes damage from any of the listed causes, even if a covered loss has contributed to the damage. Section I C listed property that was not covered, not the cause of loss itself. The first peril excluded is that of the enforcement of building codes or ordinances or laws. These are not fortuitous loss; these are requirements by local governmental agencies that must be adhered to. However coverage can be added by using the building code or law coverage, endorsement MPL 48 01 09. The endorsement must be listed in the declarations in order for coverage to apply. The only exception is one for safety glazing.

 The next exclusion is for earthquake, earth movement, volcanoes, and flooding. Earth movement is when the ground shifts due to natural or manmade forces. Road construction may cause a landslide, and a flood may cause earth to slide down a slope and into an insured's dwelling.

 Floods, surface water, waves, and storm surge are excluded whether or not aggravated or resulting from manmade actions, or caused by rain, snow, wind or other weather conditions. If manmade levies break and flood the area, when the water flows into the insured's dwelling that water damage is not covered. The size of the area involved has no bearing on coverage. However, if earth movement or floods result in loss from fire, explosion, glass breakage, or theft, such ensuing loss is covered. The 2014 form has removed glass breakage from the list of covered ensuing losses. If flood waters enter the basement and inundate an electrical outlet which shorts and causes a fire, the loss caused by the fire is covered.

 The next exclusion is for electrical damage caused by artificially generated electrical current. There are two common issues here; what exactly is an artificially generated electrical current, and if the electrical components of an item are not covered, then what is? First, an artificially generated electrical current is something manmade from a power plant; electricity entering the home is artificially generated. Note that even brownouts and power surges are excluded; it doesn't have to be a spectacular event in order for the discharge to be excluded. Lightning is a naturally generated electrical current from the clouds, and if lightning strikes and damages property there is coverage.

 As far as the property damage, because the circuits, transistors, motherboards, and other components are so delicate and easily damaged they are excluded when damaged by manmade current. This is why power strips were invented; to prevent power surges from damaging delicate electrical equipment. So if the electronic components are not covered, what is? Any part of the item that is left—this includes the housing, knobs, buttons, and other non-electrical components.

 Freezing of appliances such as air conditioners, heaters, plumbing, or other equipment or damage caused by freezing that occurs when a dwelling is unoccupied, vacant, or under construction is excluded. This is just common sense – if the dwelling is unattended it is not being maintained, and the purpose of insurance is not to cover losses the insured should be taking steps to prevent. However if the heat is maintained in the building or the pipes and other equipment have been winterized, then the exclusion is not applicable.

 Likewise, any act committed by or at the direction of an insured with the intent to cause a loss is excluded. If insurance covered intentional losses, the ensuing chaos would be astounding. It is impossible to develop rates for acts committed where an insured intends to cause damage, and the insuring of intentional acts would cause mayhem.

 6.LOSS OF USE OR VALUE EXCLUSION

Analysis

 Loss of use or value is often referred to as diminution of value; the property is not worth as much after the loss, even after repairs, as it was before the loss because it cannot be sold or used. Under coverage D there is some loss of use coverage, which usually covers the time during which the property is being repaired and the insured has to be relocated to another living space.

 The failure of power, heating, cooling equipment, and resultant change in temperature or humidity, or loss of utility services is excluded. If as a result of the failure of the equipment, a covered loss ensues, that loss is covered. For example if the furnace malfunctions and starts a fire, that resultant fire is covered although the damaged furnace is not covered. The note simply reaffirms that damage caused by the listed items, other than ensuing loss, is not covered.

 While theft is generally a covered peril, there are some exclusions. First, theft caused by the insured, tenants, employees or other residents of the house is excluded. It only makes sense that the carrier will not provide coverage when the insured steals from himself, or a resident steals from the insured. Likewise, if part of the premises is rented to others, the theft of furs, jewelry, money, securities, or silverware from that part is excluded. These are valuable and tempting objects to steal, and a less than honest tenant may not be able to resist temptation. The insured should be securing these items. Theft of building materials and supplies while a house is under construction is a standard exclusion; materials are often left out in the open and are easily stolen. Property off residence at another residence that the insured occupies, owns or rents is not covered if it is stolen when the insured is not at that other premises. Since it's not the insured's normal dwelling, such property is often targeted by thieves since they know the insured is away. This includes campers, trailers, watercraft, and equipment for such items.

 Vandalism of the dwelling when it has been vacant for more than thirty days is excluded; vacant property is at high risk for being vandalized. Also excluded is vandalism caused by an insured, a resident of the premises, or a tenant. It's not unheard of for a disgruntled tenant to vandalize the premises when he gets angry at the landlord. Likewise, a quarrel between residents can result in holes in the wall or other damage to the premises.

 10.WATER DAMAGE EXCLUSION

 Analysis

 Both the water damage and the wear and tear exclusion contain a separate note that losses from these causes are excluded, even if only part of the loss is caused by these perils, and that only ensuing damage is covered.

 The first exclusion is for underground, subsurface, or surface water that exerts pressure or flows through doors, floors, foundations, or other openings. However, there is often confusion as to what exactly surface and subsurface water are. Surface water is defined as water that meanders along the ground and is not confined with the borders of a stream, lake, pond, or other body of water. Subsurface water is water that is beneath the earth's surface that flows freely. For example where there have been weeks of heavy rain and the ground is saturated; there may be significant water underneath the ground that could seep into foundations. Groundwater that supplies wells is also subsurface water.

 Water or sewage that backs up through sewers or drains, the overflow of a sump, or discharge of sewers or water mains that originates off the residence premises is also excluded. One of the biggest issues is what exactly is a back up. It is important to distinguish between a back up and a discharge and a blockage and an overflow. A blockage prevents water from going forward through a pipe because there is something in the way. Someone's little darling flushed a rubber ducky down the toilet; this creates a blockage. An overflow is when a space has been filled to capacity and spreads beyond its limits—for example, if the tub is left running and water spills onto the floor. A discharge is a flowing or issuing out; this would be a leaking pipe. A back up is when the drain cannot handle the flow of water and the water reverses direction and backs up to the nearest opening. A blockage can lead to a back up; with the rubber duck stuck in the toilet drain, water has no place to go and can reverse directions and flow backwards. Ensuing losses caused by fire, explosion,  or theft are covered if they are the result of an excluded water loss. As in other sections of the form the coverage for glass breakage as an ensuing loss has been removed in the 2014 form. 

 The next section has several exclusions, many related to wear and tear or use of property over time. As property is used it gets worn, and this wear is not covered because it is not a fortuitous loss. The first exclusion is wear and tear, decay or deterioration; this is self explanatory, as is the exclusion for rust or corrosion, marring or scratching, dry or wet rot, fungus, molds, and other natural growth, and inherent vice, latent defect or mechanical breakdown. Inherent vice is described as a customary property of something; wood will rot over time, metal will rust. Latent defect is an original condition or fault leading to loss—this would be a weakness in floorboards that allows them to collapse.

 Contamination or pollution caused by the escape, discharge, dispersal of pollutants, and the cost to clean up, monitor, contain such pollutants is excluded as well. Pollutants is a defined term, and means any gaseous, liquid, solid, thermal contaminant, or irritant including acids, alkalis, chemicals, fumes, smoke, vapors, waste, materials to be reclaimed, reconditioned or recycled. Notice that these items are generally the result of manufacturing processes, and are not natural products. Likewise smoke for agricultural or industrial activities is excluded as well. The plant or farm responsible for the smoke should be compensating the insured for damages.

Animals are separated into two different categories; those owned by or cared for by an insured, and other animals. Birds, domestic animals, or other creatures that are owned by the insured are excluded. As mentioned earlier creatures is an extremely broad term and logically includes wild as well as domestic animals, but domestic animals are specifically mentioned. If the insured owns tigers or anacondas the damage they cause is excluded as well since they can be considered creatures. If an insured's pet monkey attacks a neighbor, there is no coverage. Insects, raccoons, rodents and vermin are excluded. Rodents are a specific scientific category, the order Rodentia. Those animals are easily identified. However vermin are not so readily identifiable; the policy does not contain a definition, and what one person considers a varmint may not be considered a varmint by someone else. Merriam Webster Online defines vermin as a small, common, harmful, or objectionable animals (as lice or fleas) that are difficult to control b: birds and mammals that prey on game c: animals that at a particular time and place compete (as for food) with humans or domestic animals. This provides a guideline to work from when determining whether or not the creature involved is an excluded vermin or something else. Large wild animals are not excluded; if a bear gets into the kitchen and tears up the cupboards, there is coverage.

 Buckling, bulging, contracting, expanding, settling, shrinking of driveways, ceilings, floors, foundations, patios, and pavements is excluded. These actions can occur naturally over time or as a result of changes in the weather. Humidity is a culprit in the expansion of wood joists, and freezing of the ground can cause it to heave and cause dirt to shift or push upon foundations or pavements.

Continuous or repeated leakage or seepage is excluded when it results from an unremedied condition. This is different than the exclusions found in the ISO forms; the ISO forms allow for coverage if the leakage is hidden behind walls or ceilings. This exclusion does not provide such coverage; if there is a hole in a pipe that is leaking or seeping, even though the insured may not know about it until the leak manifests itself by spots on the ceiling or wall, coverage is excluded. This puts an untenable burden on the insured as it is difficult, if not impossible, for an insured to know what is going on with pipes behind the walls.

 Two other unique exclusions are for drought and for weather conditions that contribute in any way with a cause, condition, or event otherwise excluded by this policy that produces a loss. For example an industrial plant has an accident and emits toxic smoke; at the same time unusually high winds hit the area and tear the siding off the insured's house leaving an opening so the toxic smoke enters the dwelling. The damage from the smoke is excluded. Even though the damage to the siding would be covered, the wind contributed to the smoke loss, so that would still be excluded. Drought is apt to kill trees, plants, shrubs and lawns, and may also cause damage to the foundation if the ground becomes so dry that the earth shifts and pushes on the foundation.

 The next exclusion is the standard failure of any person, group, organization or governmental body to act or decide, and faulty development, planning, design, workmanship, renovation, materials used in construction, repair, or renovation. This is a standard exclusion and self explanatory.

 Collapse is excluded except for the supplemental coverage described earlier. Ensuing losses from the above excluded perils are covered. If a rat chews wires in the house that causes a fire, the damage to the wires is excluded, but the fire is an ensuing loss and is covered.

 Analysis

The exclusion for falling objects unless the object first penetrates the roof or an exterior has been removed from the 2014 form. This broadens coverage, so that if the bust of Uncle George falls off the mantle and damages the floor there is now coverage, even if a meteor didn't crash through the roof and knock the bust off the mantle. 

 Certain property that is often stored outside is not covered from certain weather events unless they are completely within a fully enclosed structure. If the insured leaves the boat or camper out in the driveway and a hail storm arises, that damage is not covered. However, if the camper or boat is stored in a garage and the hail punches a hole in the roof and the camper is damaged, that is covered.

 Similar to the first exclusion, damage to the interior of a building from dust, rain, sleet or snow is not covered unless a covered loss damages the outside of the building that allows rain, sleet, snow or dust to enter the building. The damage does not have to be extensive or large; just big enough to allow these things to enter. If a strong wind blows so that shingles lift up temporarily so that snow or sleet can get in through that opening, then coverage exists for damage inside the dwelling from the snow or sleet.

 The next exclusion is the standard weight of ice, sleet, and snow and related damage to a bulkhead, pavement, retaining wall, pool, foundation, fence, flue, drain, dock, patio, pier, or wharf caused by freezing, thawing, and pressure of ice, sleet, or snow. Repeated freezing and thawing are notorious for causing damage to pavements, and in some areas of the county wind can blow ice off of a lake onto the ground and damage docks, fences, and retaining walls.

 The note making mention that ensuing losses are covered has been removed.  

 Section I E Conditions

 1.DUTIES WHEN A LOSS OCCURS

 Analysis

 Section I E is the conditions of the policy; actions the insured needs to take in event of a loss, how losses are settled, and other information. As with any insurance policy, the loss must be reported to the carrier. This form requires immediate notification in writing. In case of vandalism or other violations of law, the police must be notified as well. The carrier requires details as soon as possible; how, when and where the loss occurred.

 Unique to this policy is the requirement to protect property before a loss occurs as well as protecting property from further damage. Therefore exposed property should be taken indoors. Regular maintenance of the property to prevent losses such as repairing leaking roofs, sagging foundations, worn siding, and other such items should be conducted. These protective measures are of course made at the insured's expense, and the policy clearly states that any loss that results from the insured's neglect of the property is not covered. Many policies simply exclude neglect, but do not go to such lengths as to make maintenance a part of the contract.

 Cooperation with the carrier is another standard insurance clause. Allowing the carrier to examine remains of damaged property, provide inventories and records of property, submission to examinations under oath and otherwise cooperate with the carrier is required.

 D.Inventory

 Analysis

 Section D details what information is required in the inventory mentioned in the section on cooperation. Details of the property such as age, quantity, value, and description are required. Not just damaged property must be inventoried, however, undamaged property must be inventoried as well. The damaged property needs to be put in the best possible order for the carrier to examine the property and set aside.

 Section E indicates what is required on the statement of loss; any information that will help the carrier determine coverage, their liability for the loss, amount and scope of loss, and damage to structures along with repair estimates. The scope of the loss is the amount of damage to what parts of the property; the carrier needs to know exactly what has been damaged, and to what extent.

 A proof of loss is different than a notice of loss. The notice of loss advises the carrier that a loss has occurred. A proof of loss is something the carrier may request from the insured that indicates the time and cause of the loss, the insured's interest in the property and any lien holders, any other insurance on the property, any changes in ownership, occupancy or use of the property during the policy period, receipts for additional living expenses, records supporting fair rental value losses, and evidence that supports a claim under the credit card, forgery, or counterfeit money coverage that shows the amount and cause of loss. This notice is required from the insured within sixty days after the carrier requests such proof of loss. Note that such a detailed proof of loss is required only when the carrier requires it. It is required after the date of request, not the date of loss. So if the date of loss is in January and the carrier does not request a proof of loss until March 1, the insured has until May 1 to get the proof of loss to the carrier. This is an important document because failure to provide the proof of loss or failure to abide by any other condition can void the carrier's obligation to pay the claim.

 2.HOW LOSSES ARE SETTLED

 Analysis

 The loss settlement language is very straightforward. The policy pays the lesser of replacement cost or actual cash value at the time of loss not exceed the cost to repair or replace the property; the stated limit of the policy, or the insurable interest of the insured. Unique to this policy is that it specifies that in partial losses, the carrier is responsible to match as closely as possible to the undamaged portions of the property, but does not owe to replace undamaged portions if matching materials cannot be found. This is significant as matching is a widely disputed part of insurance coverage. Some schools of thought say that until the entire property matches that the insured has not been indemnified, and the carrier has not fulfilled its obligation. Others believe that the carrier is only responsible to replace the damaged portion of the property and match as best as possible. Courts are divided on the issue, so there is no resolution there. This language eliminates any confusion or dispute by clearly stating that undamaged property will not be replaced, even if the repair results in unmatched property.

 As long as the property is insured to 80 percent of the full replacement cost value of the dwelling at the time of loss, loss settlement for coverages A and B is at replacement cost. As is typical of most policies, underground drains, pipes, wiring, excavations, foundations, and below ground supports are not considered in the determination of the 80 percent of replacement value. Payment on a replacement cost basis is not made until the property is replaced by either the insured or the carrier unless the cost for total repair or replacement is less than $2,000. The insured has the ability to make a claim on an actual cash value basis, and may make a further claim on replacement cost basis as long as the repair has been made and it is within 180 days of the actual cash value settlement. For example, an insured has a loss June first. The replacement cost of the loss is $120,000 and the actual cash value is $80,000. The insured makes a claim for actual cash value, and receives the $80,000 June 20th. The insured has until December 20 to repair the property and make a claim for the remaining $40,000. This replacement cost coverage does not apply to awnings, carpets, appliances, or outdoor antennas or equipment, even if part of a building. So if an insured has wall to wall carpeting, which is normally considered to be part of the dwelling, it is covered only at actual cash value while the home is covered at replacement cost.

 All property that is not eligible for replacement cost settlement is paid at actual cash value settlement. Any loss can be settled on an actual cash value basis.

 C.Deductible

 Analysis

 Losses are not paid until they exceed the amount of the deductible. Loss to a pair or set, or a property consisting of two or more parts when complete is not considered a total loss unless the remainder is of no use or repair or replacement is not feasible. If the property is considered a total loss the insured is required to provide the carrier with the remainder of the original property at the request of the carrier. For example a pair of matching bookends; there is no replacement available, and the one bookend is useless without the other one. The carrier would pay the value of the set of bookends, but the insured might be required to surrender the remaining bookend to the carrier.

 The carrier may pay any loss in money, or repair or replace all or any part of the property that was damaged. The carrier may also take such property at a mutually agreed value. The carrier's intent must be made known within thirty days of its acceptance of liability for the loss. The loss may be settled with the insured, loss payees, or others legally entitled to receive payment, such as claimants. Property of others will be settled with the owners of the property. Should the insured be sued, the carrier has the right to conduct and control a defense at their expense without increasing their liability. For example, the policy liability limits are $500,000. The insured is sued and the court awards $600,000 to the claimant. The carrier is only responsible for the policy limit of $500,000; the insured is responsible for the other $100,000 out of pocket.

 F.Appraisal

 Analysis

 The purpose of the appraisal is the settlement of differences surrounding the value of the loss, not whether or not there is coverage. This is often confused. Each side picks an appraiser and the appraisers select an umpire. If they cannot agree on an umpire, a request may be made to have the selection of umpire made by a court of record. It is specified that the appraiser be competent and disinterested. How that is to be determined is left up to the parties involved; the policy does not specify what makes an appraiser competent or disinterested. If the appraisers cannot come to an agreement, they are to submit their differences to the umpire. Any agreement between two of the three parties sets the amount of the loss. Each party is to pay their selected appraiser.

 However an appraisal does not mean that coverage applies; the carrier retains their right to deny the claim even if an appraisal has been agreed to. Again, the appraisal simply determines the dollar amount of the loss, not availability of coverage.

 The policy pays a maximum of the stated limits only; if that does not cover the insured's loss completely then the insured must seek coverage elsewhere or absorb the loss.

 3.SCOPE OF COVERED LOSS

 Analysis

 The scope of the loss is what is damaged; not the value of the loss. Fortuitous direct physical damage or destruction including disappearance caused by theft is considered the loss as long as the peril is covered under this policy. Some ensuing losses may be covered as well. The covered causes of loss are included in the coverage form that is attached to this policy. Different coverage may be attached, so the policy form must be reviewed carefully.

If hazards within the control of the insured are increased during the policy period, the policy may be suspended. There is no coverage during the suspension, even for items that have not had an increase in hazard. For example if the insured decides to change the garage to an auto repair shop, the policy may be suspended. While the policy is suspended the house burns; the fire is not covered because of the suspension, even though fire is a covered peril.

 The coverage for insured hazards is for the use of the residence premises as a private residence or some specifically listed and permitted incidental usages. Any protective safeguards on the property such as burglar alarms, sprinklers, smoke detectors that allow a premium reduction on the policy must be maintained throughout the policy period.

 Mortgagees are covered in order of precedence and to the extent of their interest in the property. There are certain requirements of the mortgagee that must be complied with. The mortgagee must notify the carrier of any changes in ownership, hazard or foreclosure proceedings, pay required premium if requested because the insured failed to do so, provide proof of loss within sixty days of request because the insured failed to do so, give the rights of recovery to the carrier against anyone liable for the loss and allow a full assignment to the carrier of mortgage and collateral securities of the debt. The mortgagee's interest is covered even if the insured's claim is denied. A caveat has been added in the 2014 form requiring the mortgagee to comply with all requirements set out for mortgagees.  Cancellation may be made according to state provisions.

 C.No Benefit to Bailee

 Analysis

 The next five clauses are standard to most policies. When the property of the insured is being kept by another party for a fee, that other party, known as a bailee, does not have any coverage under this policy. For example; the insured leaves a mink coat in storage for the summer. The furrier is the bailee. The furrier sustains a fire and the coat burns. Since the coat was in the custody of the furrier, the furrier should compensate the insured for the loss of the coat. The furrier should have his own policy to provide coverage for property in his care, custody, or control.

 The previous policy contained a clause explaining that this policy was excess over other existing insurance. That section has been removed from this policy. 

 Occasionally property is recovered either by the insured or the carrier. If the insured has received payment for the property, there are two options. The insured can retain the property and return to the carrier a portion of the amount of the settlement. If the insured does not wish to retain the property, then the carrier owns the property and the insured is required to surrender the property to the carrier.

 Losses are payable thirty days after a written agreement between the insured and the carrier has been agreed upon; the amount of insurance available is not reduced by the amount of payments. For example, the insured has a policy limit of $250,000 and sustains a kitchen fire of $50,000. Later in the year the entire dwelling burns; the policy limit of $250,000 is available for the loss. Paying the earlier $50,000 loss does not affect the policy limit available for future losses.

 Other parties with interest in the property may receive payment from the carrier; the carrier has the option to make payments jointly to all interested parties. The abandonment of property to the carrier is prohibited. The insured cannot simply leave damaged property in the carrier's parking lot and consider the matter handled.