Part 3 – Perils Insured Against, Exclusions

Part 4 – Conditions Section I

Part 5 – Section II Liability

Topics covered:

Coverage E Personal Liability

Coverage F Medical Payments

Coverage E and F Exclusions

Section II Additional Coverages

Section II Conditions

Sections I and II Conditions

A. Coverage E – Personal Liability If a claim is made or a suit is brought against an "insured" for damages because of "bodily injury" or "property damage" caused by an "occurrence" to which this coverage applies, we will:

1. Pay up to our limit of liability for the damages for which an "insured" is legally liable. Damages include prejudgment interest awarded against an "insured"; and 2. Provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent. We may investigate and settle any claim or suit that we decide is appropriate. Our duty to settle or defend ends when our limit of liability for the "occurrence" has been exhausted by payment of a judgment or settlement.

B. Coverage F – Medical Payments To Others We will pay the necessary medical expenses that are incurred or medically ascertained within three years from the date of an accident causing "bodily injury". Medical expenses means reasonable charges for medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, prosthetic devices and funeral services. This coverage does not apply to you or regular residents of your household. As to others, this coverage applies only:

1. To a person on the "insured location" with the permission of an "insured"; or 2. To a person off the "insured location", if the "bodily injury":

a. Arises out of a condition on the "insured location" or the ways immediately adjoining; b. Is caused by the activities of an "insured"; or c. Is caused by an animal owned by or in the care of an "insured".

Analysis:

Coverage is provided when a claim or suit is brought against an "insured" for "bodily injury" or "property damages" caused by an "occurrence". Remember that "occurrence" is defined as an accident and includes repeated or continuous exposure to the same harmful conditions that result in injury or damage.

Coverage is applied two ways. First, if the "insured" is legally liable for damages or injury, the policy will pay up to the policy limit and also pay for prejudgment interest. Secondly, if a suit is filed against an "insured", the insurer will provide a defense at its expense by the attorney of its choice, even if the suit is groundless, false or fraudulent. What is important is that there must be the chance of coverage under the policy in order for the insurer to provide a defense. The insurer does not have to defend a suit when there is no coverage under the policy. If an insured deliberately shoots an ex-spouse, the insurer has no duty to defend. Shooting someone is an intentional act and not covered.

The insurer has the option to investigate and settle any claim as it sees fit. The duty to defend ends when the limit of liability has been exhausted by payment of a judgment or settlement.

Medical payments coverage provides coverage for necessary medical expenses when someone has been injured by an "insured" or on the insured premises. Covered expenses include medical, hospital, surgical, x-ray, dental, nursing, prosthetic devices and funeral services. Coverage applies under specific instances. People on the "insured location" with the "insured's" permission are covered if they become injured, for example, if they fell down the stairs. Also, people off the "insured location" are covered if the injury arises out of a condition on the "insured location" or ways immediately adjoining the premises, or the injury is caused by activities of an "insured" or animals owned by or in the care of an "insured".

A pedestrian walking down the sidewalk next to the "insured location" looking at her cellphone doesn't see the insured's tree limb hanging over the fence and runs into it, cutting her face. That would be covered. Likewise, if an "insured" and his dog are at the dog park and the "insured's" dog knocks down another person at the park, injuries of that person would be covered, whether it is the "insured" who knocked over the other person or the "insured's" dog who knocked over the other person.

SECTION II – EXCLUSIONS

A. Motor Vehicle Liability

1. Coverages E and F do not apply to any "motor vehicle liability" if the involved "motor vehicle":

a. Is registered for use on public roads or property; b. Is not registered for use on public roads or property, but such registration is required by a law, or regulation issued by a government agency, for it to be used at the place of the "occurrence"; or c. Is being:

(1) Operated in, or practicing for, any pre arranged or organized race, speed contest or other competition; (2) Rented to others; (3) Used to carry persons or cargo for a charge; or (4) Used for any "business" purpose.

2. If Exclusion A.1. does not apply, there is still no coverage for "motor vehicle liability", unless the "motor vehicle" is:

a. Designed to assist the handicapped and, at the time of an "occurrence", it is:

(1) Being used to assist a handicapped person; or (2) Parked on an "insured location"; or

b. A motorized bicycle or motorized scooter.

B. Watercraft Liability This Policy does not cover "watercraft liability". C. Aircraft Liability This Policy does not cover "aircraft liability". D. Hovercraft Liability This Policy does not cover "hovercraft liability".

Analysis:

The first part of the exclusions section deals with vehicle exclusions. While liability is excluded completely for watercraft, aircraft and hovercraft, there are some exceptions to the motor vehicle exclusions that should be reviewed. "Motor vehicles" in general should be insured on a personal auto policy; that is what that policy is designed for. However, there are certain vehicles or situations that don't exactly fit the auto policy and where liability exposure is minimal.

The "motor vehicle" exclusion clearly excludes vehicles that are registered for use on public roads or property, or if the vehicle is not registered for use on roads or property but registration is required by law for where the vehicle is being used, coverage is excluded. For example, an insured may have a go-cart that he races at a go-cart track. The vehicle isn't required to be registered for use on public roads, but it is required to have a go-cart registration for use on the track; that vehicle is excluded. Likewise, if such a vehicle is being operated in, or practicing for any pre-arranged or organized race, speed contest or similar competition, is rented to others, is used to carry persons or property for a fee or is used for any "business" purpose, there is no coverage.

Coverage applies as an exception for vehicles designed to assist the handicapped if the vehicle at the time of the "occurrence" is being used to assist a handicapped person, or is parked at an "insured location". Another exception is for a motorized bicycle or motorized scooter. For example, an insured is at the mall in his motorized wheelchair and while backing up to turn around runs into another shopper and injures that person's foot. That would be covered. Likewise, if the electric wheelchair is parked at the insured's residence and a visiting friend trips over the wheelchair and injures herself, that injury is covered as well. Coverage is also provided for motorized bicycles and motorized scooters; as these vehicles have become more popular the need for coverage is apparent, and they are not something that would fit on an auto policy.

E. Coverage E – Personal Liability And Coverage F – Medical Payments To Others Coverages E and F do not apply to the following:

1. Expected Or Intended Injury "Bodily injury" or "property damage" which is expected or intended by an "insured", even if the resulting "bodily injury" or "property damage":

a. Is of a different kind, quality or degree than initially expected or intended; or b. Is sustained by a different person, entity or property than initially expected or intended. However, this Exclusion E.1. does not apply to "bodily injury" or "property damage" resulting from the use of reasonable force by an "insured" to protect persons or property;

2. Business

a. "Bodily injury" or "property damage" arising out of or in connection with a "business" conducted from an "insured location" or engaged in by an "insured", whether or not the "business" is owned or operated by an "insured" or employs an "insured". This Exclusion E.2. applies but is not limited to an act or omission, regardless of its nature or circumstance, involving a service or duty rendered, promised, owed or implied to be provided because of the nature of the "business". b. This Exclusion E.2. does not apply to:

(1) "Home-sharing host activities"; (2) With respect to other than "home-sharing host activities":

(a) The rental or holding for rental of an "insured location":

(i) On an occasional basis if used only as a residence; (ii) In part for use only as a residence, unless a single-family unit is intended for use by the occupying family to lodge more than two roomers or boarders; or (iii) In part, as an office, school, studio or private garage; and

(b) An "insured" under the age of 21 years involved in a part-time or occasional, self-employed "business" with no employees;

3. Professional Services "Bodily injury" or "property damage" arising out of the rendering of or failure to render professional services;

Analysis:

This next section again is for exclusions that pertain to both coverages E and F. The first exclusion is for injury or damage that the insured both expects and intends to cause to others. Such activity is excluded, even if the resulting injury is sustained by a different person or property than intended, or that the level of injury or damage is different than initially expected or intended.

For example, an insured is playing softball with friends and deliberately throws the ball at a friend with the intention of hitting the friend. The insured's intent is that this is in fun; however the ball hits the friend in the eye causing significant injury. Since the insured intentionally threw the ball at the friend and intended to hit him, even though he was joking and meant to hit the friend softly in the chest, there will be no coverage for the friend's eye injury. The intent, to throw the ball and hit the friend, is the same even though the result was not the intended result. The only exception for this is if the insured is using reasonable force to protect persons or property from harm. If a burglar breaks into the house and threatens the insured and the insured shoots the burglar, the insured will be covered if the burglar files a claim for his injuries.

Injury or damage that arises out of a "business" conducted from the "insured location", engaged in by an "insured", regardless of whether or not the "business" is owned or operated by the "insured" or simply employs the "insured", is excluded. Also excluded are acts or omissions regardless of their nature that involve any service or duty rendered, promised, or implied to be provided because of the nature of the "business". An insured works for a pet grooming service and a customer claims that the insured should have discovered that the customer's dog had ear mites and advised the customer on treatment. Any claim that arises from this customer would not be covered because it is related to the insured's employment. Whether or not the insured actually had the duty to advise the customer of the ear mites is immaterial; the claim is related to the insured's employment at the dog grooming service and is therefore excluded.

There are some exceptions; "home-sharing host activities" are covered and the business exclusion does not apply. If the premises is rented or held for rental there is coverage if the rental is on an occasional basis if only used as a residence, or the premises is rented in part for use as a residence, unless a single-family unit is intended for use by the occupying family to house more than two roomers or boarders, or the premises is rented in part as an office, school, studio or private garage. "Insured's" under the age of twenty-one are covered if they are involved in a part-time or occasional, self-employed "business" with no employees. This allows teenagers to have paper routes, babysit or pet sit, or have other part-time jobs.

Professional services are excluded as well. If an attorney, physician, nurse, or other professional renders or fails to render their services and that failure or rendering of service results in injury or damage to another person or property, there is no coverage under this policy. Professional services need to be covered on a professional liability policy.

4. Insured's Premises Not An Insured Location "Bodily injury" or "property damage" arising out of a premises:

a. Owned by an "insured"; b. Rented to an "insured"; or c. Rented to others by an "insured"; that is not an "insured location";

5. War "Bodily injury" or "property damage" caused directly or indirectly by war, including the following and any consequence of any of the following:

a. Undeclared war, civil war, insurrection, rebellion or revolution; b. Warlike act by a military force or military personnel; or c. Destruction, seizure or use for a military purpose. Discharge of a nuclear weapon will be deemed a warlike act even if accidental;

6. Communicable Disease "Bodily injury" or "property damage" which arises out of the transmission of a communicable disease by an "insured"; 7. Sexual Molestation, Corporal Punishment Or Physical Or Mental Abuse "Bodily injury" or "property damage" arising out of sexual molestation, corporal punishment or physical or mental abuse; or 8. Controlled Substance "Bodily injury" or "property damage" arising out of the use, sale, manufacture, delivery, transfer or possession by any person of:

a. A Controlled Substance as defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812; or b. Any "cannabis" regardless of whether such "cannabis" is considered a Controlled Substance. Controlled Substances include but are not limited to cocaine, LSD and all narcotic drugs.

However, this exclusion does not apply to the legitimate use of prescription drugs by a person following the lawful orders of a licensed healthcare professional.

Analysis:

The next series of exclusions are fairly standard. Coverage will not apply to premises owned by, rented to an "insured", or rented to others by an "insured", that is not an "insured location". Remember an "insured location" is the "residence premises", any premises used by the "insured" in connection with the "residence premises", or part of a premises the "insured" does not own but is temporarily residing in or that is occasionally rented to an "insured" for other than "business" use; for example, an insured rents a studio to practice playing the bagpipes. "Residence premises" includes any part of a dwelling where the "insured" resides that is shown as the "residence premises" in the declarations, including other structures and grounds at that location.

As was found in Section I, injury or damage caused directly or indirectly by war, warlike acts, civil war, insurrection, rebellion, revolution, destruction or use of property for a military purpose, or discharge of a nuclear weapon even if accidental, are all excluded. An insured could be responsible for leading an insurrection or rebellion, however any claims against him for damage or injury to others would not be covered.

The transmission of communicable diseases is excluded. While some diseases could be traced to an insured as the cause, such coverage is not the intent of this policy. Likewise sexual molestation, corporal punishment or physical or mental abuse resulting in injury or damage are all excluded as well.

Injury or damage that arises from the "insured's" use, sale, manufacture, delivery, transfer or possession of controlled substances is excluded. What determines whether a substance is a controlled substance is defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812.

"Cannabis" is specifically designated as a controlled substance by the policy whether or not it is so declared in the federal law, and controlled substances include but are not limited to LSD, cocaine and narcotics. The growing legalization of cannabis by many states for medicinal or recreational purposes makes it necessary for the policy to clarify how cannabis is treated.

This pretty much covers illegal recreational drugs an "insured" may use personally or may be selling or creating. Coverage does not apply if an "insured" has a meth lab in the basement and an explosion occurs injuring others and the dwelling. An exception is made for legally prescribed medications an "insured" uses at the direction of a licensed health professional. The "insured" must be following the health professional's directions; if an insured starts abusing the drugs and in a rage injures someone or starts selling them illegally the exception could be invalidated.

F. Coverage E – Personal Liability Coverage E does not apply to:

1. Liability:

a. For any loss assessment charged against you as a member of an association, corporation or community of property owners. b. Under any contract or agreement entered into by an "insured". However, this exclusion does not apply to written contracts:

(1) That directly relate to the ownership, maintenance or use of an "insured location"; or (2) Where the liability of others is assumed by you prior to an "occurrence"; unless excluded in a. above or elsewhere in this Policy;

2. "Property damage" to property owned by an "insured". This includes costs or expenses incurred by an "insured" or others to repair, replace, enhance, restore or maintain such property to prevent injury to a person or damage to property of others, whether on or away from an "insured location"; 3. "Property damage" to property rented to, occupied or used by or in the care of an "insured". This exclusion does not apply to "property damage" caused by fire, smoke or explosion;

4. "Bodily injury" to any person eligible to receive any benefits voluntarily provided or required to be provided by an "insured" under any:

a. Workers' compensation law; b. Non-occupational disability law; or c. Occupational disease law;

5. "Bodily injury" or "property damage" for which an "insured" under this Policy:

a. Is also an insured under a nuclear energy liability policy issued by the:

(1) Nuclear Energy Liability Insurance Association; (2) Mutual Atomic Energy Liability Underwriters; (3) Nuclear Insurance Association of Canada; or any of their successors; or

b. Would be an insured under such a policy but for the exhaustion of its limit of liability; or

6. "Bodily injury" to you or an "insured" as defined under Definition 8.a. or b. This exclusion also applies to any claim made or suit brought against you or an "insured" to:

a. Repay; or b. Share damages with; another person who may be obligated to pay damages because of "bodily injury" to an "insured".

Analysis:

This next section of exclusions applies only to Section E, Personal Liability. The first exclusion is for loss assessment if the insured is a member or part of a community of property owners, an association or corporation. Remember, this policy is not a condominium unit owners policy nor a standard tenants policy; it is designed for those who may be living with parents or sharing a home with others and the needs are different. Loss assessment is not apt to be needed.

The next exclusion is for written contracts or agreements. However, an exception exists if the written contract applies directly to the ownership, use or maintenance of an "insured location" or if the liability of others has been assumed by the insured prior to the "occurrence" unless excluded under the loss assessment exclusion. So a contract between an insured and the owner of the property he is renting is covered only if the contract applies to the ownership, use or maintenance of the "insured location". An insured may make an agreement with his landlord that he can house his pigeons on the property under certain conditions they both agree to in writing.

The policy does not provide coverage under the liability section for "property damage" to property owned by an "insured". Such damages are covered under Section I. Also excluded are expenses incurred by an "insured" to repair, replace, restore or maintain such property to prevent injury to others, whether on or away from the "insured location". If the insured has to repair the pigeon coop to prevent others from being injured when they come to look at his prize pigeons, such costs are not covered. It is the "insured's" responsibility to maintain his property and keep it in good condition.

Likewise damage to property rented to, occupied, used by or in the care of an "insured" is excluded under this section. An exception is for damage caused by fire, smoke or explosion. Damage to property of others is covered under section I if the property is on the part of the premises occupied by an "insured" or is property of a guest while occupying the premises, and at the request of the "insured".

The next three exclusions are related to "bodily injury"; the first two are exclusions for those covered under workers compensation, nonoccupational disability or occupational disease laws, as well as those covered under nuclear energy liability policies issued by the Nuclear Energy Liability Insurance Association, Mutual Atomic Energy Liability Underwriters, Nuclear Insurance Association of Canada or any of their successors or who would be covered by these policies except that limits have been exhausted. This clarifies that even if coverage under these other policies has been exhausted, that this policy will still not provide any coverage over and above those policies.

Coverage is also excluded for injury to an "insured'. An "insured" cannot be liable to himself for injuries he sustains on his property, even if the injuries are accidental. If an "insured" trips over a cat toy and breaks his ankle, this policy will not provide coverage for his injuries. Also there is no coverage for claims or suits brought against an "insured" to share or repay damages with another person who may be obligated to pay damages because of injury to an "insured". Say an insured and his family are playing softball with others and the insured is injured when a party on the other team slides into him. The insured sues the other party, who countersues claiming the insured should have moved, and he himself is injured because of the insured's action. If the insured is found partially at fault for his own injury, the policy will not respond to the insured's injury.

G. Coverage F – Medical Payments To Others Coverage F does not apply to "bodily injury":

1. To any person eligible to receive benefits voluntarily provided or required to be provided under any:

a. Workers' compensation law; b. Non-occupational disability law; or c. Occupational disease law;

2. From any:

a. Nuclear reaction; b. Nuclear radiation; or c. Radioactive contamination; all whether controlled or uncontrolled or however caused; or d. Any consequence of any of these; or

3. To any person regularly residing on any part of the "insured location".

Analysis:

The exclusions for medical payments are straightforward. Coverage is excluded for anyone residing on the "insured premises", as well as those eligible to receive coverage under workers compensation, nonoccupational disability or occupational disease laws. Coverage is also excluded for those injured due to nuclear reaction, radiation, or radioactive contamination, controlled or uncontrolled, or any consequences thereof. Even if an insured was somehow liable for a nuclear reaction or the release of radiation or radioactive contamination, this policy is not designed to provide such coverage.

SECTION II – ADDITIONAL COVERAGES We cover the following in addition to the limits of liability:

A. Claim Expenses We pay:

1. Expenses we incur and costs taxed against an "insured" in any suit we defend; 2. Premiums on bonds required in a suit we defend, but not for bond amounts more than the Coverage E limit of liability. We need not apply for or furnish any bond; 3. Reasonable expenses incurred by an "insured" at our request, including actual loss of earnings (but not loss of other income) up to $250 per day, for assisting us in the investigation or defense of a claim or suit; and 4. Interest on the entire judgment which accrues after entry of the judgment and before we pay or tender, or deposit in court that part of the judgment which does not exceed the limit of liability that applies.

B. First Aid Expenses We will pay expenses for first aid to others incurred by an "insured" for "bodily injury" covered under this Policy. We will not pay for first aid to an "insured". C. Damage To Property Of Others

1. We will pay, at replacement cost, up to $5,000 per "occurrence" for "property damage" to property of others caused by an "insured". 2. We will not pay for "property damage":

a. To the extent of any amount recoverable under Section I; b. Caused intentionally by an "insured" who is 13 years of age or older; c. To property owned by an "insured"; d. To property owned by or rented to a tenant of an "insured" or a resident in your household; or e. Arising out of:

(1) A "business", other than "home-sharing host activities", engaged in by an "insured"; (2) Any act or omission in connection with a premises owned, rented or controlled by an "insured", other than the "insured location"; or (3) The ownership, maintenance, occupancy, operation, use, loading or unloading of aircraft, hovercraft, watercraft or "motor vehicles". This Exclusion e.(3) does not apply to a "motor vehicle" that:

(a) Is designed for recreational use off public roads; (b) Is not owned by an "insured"; and (c) At the time of the "occurrence", is not required by law, or regulation issued by a government agency, to have been registered for it to be used on public roads or property.

Analysis:

There are three separate additional coverages under Section II; claim expenses, first aid expenses, and damage to property of others. Claim expenses provides coverage for expenses and costs taxed against an "insured" in any suit the carrier defends, as well as bonds required in a suit, but for no more than the coverage E limit. The carrier does not have to apply for or furnish the bonds, just pay the premiums. Any expenses the insured incurs at the carrier's request in assisting in the defense of a claim or suit are paid. This includes actual loss of earnings up to $250 a day. It must be actual loss of earnings; if the insured is a salesman and could have made $200 had he been working but also could have made only $100, depending on sales, only actual salary loss would be paid. Interest on the judgment that accrues after the judgment is entered and before the carrier makes payment or deposits the sum in court is also paid.

First aid expenses are for those expenses incurred by an "insured" when providing first aid for "bodily injury" that would be covered under the policy. If the insured has a party and his balcony collapses and he provides first aid to his injured guests, his expenses would be covered. Expenses for first aid if the insured is injured are not covered as again, an insured cannot be liable to himself for injuries on his own property.

Damage to property of others is the last additional coverage and it is often called good neighbor coverage. That is because the insured does not need to be legally liable for coverage to be afforded; it is for things that just happen. Up to $5000 per "occurrence" is provided for damage to property of others caused by an "insured". A list of exclusions follows.

First, coverage is not duplicated with that provided under Section I; if the damaged property would be covered under Section I, then coverage is not available here. Any damage that is intentionally caused by an insured over the age of thirteen years or older is not covered. That is deliberately causing harm to someone's property. The age of thirteen is the age at which a person can be held to knowing the difference between right and wrong.

Property owned by an insured is again covered under Section I and again an insured cannot be liable to himself for damages to his own property. Likewise property owned or rented to a tenant of an "insured" or a resident of the household is not covered if damage arises out of a "business" other than "home-sharing host activities" engaged in by an "insured", acts or omissions in connection with a premises owned, rented or controlled by an "insured", or the ownership, maintenance, occupancy, operation, use, loading or unloading of aircraft, hovercraft, watercraft or "motor vehicles". Businesses other than "home-sharing host activities" should have separate coverage for those business exposures. Since this policy is designed for those staying with others, liability for property owned, rented or controlled by an "insured" should also have separate coverage. As always, this policy is designed for personal property, and any type of vehicle, be it aircraft, hovercraft, watercraft or motor vehicles belongs on a policy designed for that type of vehicle. There is an exception for vehicles designed for recreational use off public roads, not owned by "insureds" and at the time of an "occurrence", not required by law or regulation to have been registered for use on public roads or property. If an insured is driving a neighbor's ATV and has an accident, then there would be coverage.

SECTION II – CONDITIONS

A. Limit Of Liability Our total liability under Coverage E for all damages resulting from any one "occurrence" will not be more than the Coverage E Limit Of Liability shown in the Declarations. This limit is the same regardless of the number of "insureds", claims made or persons injured. All "bodily injury" and "property damage" resulting from any one accident or from continuous or repeated exposure to substantially the same general harmful conditions shall be considered to be the result of one "occurrence".

Our total liability under Coverage F for all medical expenses payable for "bodily injury" to one person as the result of one accident will not be more than the Coverage F Limit Of Liability shown in the Declarations. B. Severability Of Insurance This insurance applies separately to each "insured". This condition will not increase our limit of liability for any one "occurrence". C. Duties After Occurrence In case of an "occurrence", you or another "insured" will perform the following duties that apply. We have no duty to provide coverage under this Policy if your failure to comply with the following duties is prejudicial to us. You will help us by seeing that these duties are performed:

1. Give written notice to us or our agent as soon as is practical, which sets forth:

a. The identity of the Policy and the "named insured" shown in the Declarations; b. Reasonably available information on the time, place and circumstances of the "occurrence"; and c. Names and addresses of any claimants and witnesses;

2. Cooperate with us in the investigation, settlement or defense of any claim or suit; 3. Promptly forward to us every notice, demand, summons or other process relating to the "occurrence"; 4. At our request, help us:

a. To make settlement; b. To enforce any right of contribution or indemnity against any person or organization who may be liable to an "insured"; c. With the conduct of suits and attend hearings and trials; and d. To secure and give evidence and obtain the attendance of witnesses;

5. With respect to C. Damage To Property Of Others under Section II – Additional Coverages, submit to us within 60 days after the loss a sworn statement of loss and show the damaged property, if in an "insured's" control; 6. No "insured" shall, except at such "insured's" own cost, voluntarily make payment, assume obligation or incur expense other than for first aid to others at the time of the "bodily injury".

D. Duties Of An Injured Person – Coverage F – Medical Payments To Others

1. The injured person or someone acting for the injured person will:

a. Give us written proof of claim, under oath if required, as soon as is practical; and b. Authorize us to obtain copies of medical reports and records.

2. The injured person will submit to a physical exam by a doctor of our choice when and as often as we reasonably require.

E. Payment Of Claim – Coverage F – Medical Payments To Others Payment under this coverage is not an admission of liability by an "insured" or us. F. Suit Against Us

1. No action can be brought against us unless there has been full compliance with all of the terms under this Section II. 2. No one will have the right to join us as a party to any action against an "insured". 3. Also, no action with respect to Coverage E can be brought against us until the obligation of such "insured" has been determined by final judgment or agreement signed by us.

G. Bankruptcy Of An Insured Bankruptcy or insolvency of an "insured" will not relieve us of our obligations under this Policy. H. Other Insurance This insurance is:

1. Primary with respect to:

a. Other insurance; b. A protection plan; or c. A guarantee; provided by, on behalf of, or through a "home-sharing network platform" covering "home-sharing host activities".

2. Subject to Paragraph H.1., excess over other valid and collectible insurance except insurance written specifically to cover as excess over the limits of liability that apply in this Policy. 3. As used in this Paragraph H., a protection plan or guarantee means a product provided by, on behalf of, or through a "home-sharing network platform" which provides liability protection for "home-sharing host activities", even if it is characterized as insurance.

I. Concealment Or Fraud We do not provide coverage to an "insured" who, whether before or after a loss, has:

1. Intentionally concealed or misrepresented any material fact or circumstance; 2. Engaged in fraudulent conduct; or 3. Made false statements; relating to this insurance.

Analysis:

Section II has its own set of conditions. First, it states that the total limit of liability under Coverage E will not exceed the limit shown in the declarations, and that the limit is the same regardless of the number of "insureds", claims made or persons injured. All injury or damage from one accident or continuous repeated exposure to the same harmful conditions is considered one "occurrence". For example, if an insured's son regularly hits tennis balls against the neighbor's house damaging the siding, that would be considered one occurrence; it is repeated exposure to the same general harmful condition.

Coverage F is handled the same way; the total liability under Coverage F to one person is the limit of liability shown in the declarations, no more.

Severability is the ability to provide coverage separately for each "insured". It does not increase the amount of coverage available, but it allows each "insured" involved in an incident to receive a separate defense if necessary.

Duties after a loss are similar to the duties that appear in Section I. First, if the insured fails to perform the duties as required, the carrier has no duty to provide coverage if the failure to perform the duties is prejudicial to the carrier. If the actions or inactions of the insured make it impossible for the carrier to properly investigate and substantiate coverage for a claim, then the carrier is not obligated to provide coverage.

The duties are standard; the insured is to notify the carrier of any incident and provide all details as to name of involved parties, addresses, dates, description of injuries or damages and the nature of the occurrence. The insured is to help make settlement, enforce the carrier's right of contribution, assist with suits and attend hearings and trials, secure evidence, submit sworn proof of loss for damaged property within sixty days of the loss, and not make any voluntary payments other than first aid at the time of injury. Making voluntary payments other than first aid can be seen as an admission of guilt and can prejudice the carrier's defense of the claim.

Injured parties have duties as well. An injured party or someone acting for that person is to give the carrier written proof of claim, under oath if required, and as soon as practicable, authorize the carrier to access relevant medical records and reports, and submit to a physical exam by a doctor of the carrier's choosing as often as reasonably required. If someone is seriously injured followup appointments may be necessary in order for the carrier to track progress and healing.

Payment of a claim is not an admission of guilt; a carrier may pay a claim because it is less expensive to pay it than to defend it in court. Therefore, the policy states that payment does not admit guilt of the insured.

Suit may not be filed against a carrier until all duties have been complied with, and no one may join the carrier in an action against an "insured". Actions regarding Coverage E, personal liability, cannot be brought against the carrier until the obligation of the "insured" has been determined by final judgment or agreement signed by the carrier. If the insured has not been determined to be legally liable for damage or injury, then coverage may not apply. Remember, Coverage E is for injury or damage for which an insured is legally liable.

Bankruptcy of an insured has nothing to do with the coverage available under the policy. As long as the insured has paid his premiums and coverage is in force, if the insured later falls on financial hard times, that does not have any bearing on coverage available under the policy. The two are separate matters.

An insured may have more than one insurance policy for the same liability exposures. In such instances, this policy is primary over other insurance, protection plans, or a guarantee that is provided by or on behalf of or through a "home-sharing network platform" covering "home-sharing host activities". A protection plan or guarantee is a product provided by, on behalf of, or through a "home-sharing network platform" which provides liability coverage for "home-sharing host activities" even if it is characterized as insurance. For example, an insured decides to rent out a room via Airbnb and the renter is injured while on the insured's property. This policy will be primary for that person's medical expenses over the Airbnb policy.

As far as other valid and collectible insurance, this policy is excess except for insurance that is specifically written to be excess over this primary policy. However, if there is another policy providing primary coverage for the "residence premises", then this policy is secondary to that policy.

Fraud is an enormous issue within the insurance industry, costing billions annually. Therefore the policy clearly states that coverage is not provided for an "insured" who before or after a loss has intentionally committed any acts of fraud, including intentionally concealing or misrepresenting material facts or circumstances, making false statements, or engaging in fraudulent conduct relating to this insurance. Material facts are those that would affect the granting of coverage; if an insured states on an application that he does not have a ferocious dog with a bite history and that dog later bites someone who then files a claim, the insured has made a material misrepresentation. Had the carrier known about the ferocious dog it would not have issued the policy.

SECTIONS I AND II – CONDITIONS

A. Liberalization Clause If we make a change which broadens coverage under this edition of our policy without additional premium charge, that change will automatically apply to your insurance as of the date we implement the change in your state, provided that this implementation date falls within 60 days prior to or during the policy period stated in the Declarations. This Liberalization Clause does not apply to changes implemented with a general program revision that includes both broadenings and restrictions in coverage, whether that general program revision is implemented through introduction of:

1. A subsequent edition of this Policy; or 2. An amendatory endorsement.

B. Waiver Or Change Of Policy Provisions A waiver or change of a provision of this Policy must be in writing by us to be valid. Our request for an appraisal or examination will not waive any of our rights. C. Cancellation

1. You may cancel this Policy at any time by returning it to us or by letting us know in writing of the date cancellation is to take effect. 2. We may cancel this Policy only for the reasons stated below by letting you know in writing of the date cancellation takes effect. This cancellation notice may be delivered to you, or mailed to you at your mailing address shown in the Declarations. Proof of mailing will be sufficient proof of notice.

a. When you have not paid the premium, we may cancel at any time by letting you know at least 10 days before the date cancellation takes effect. b. When this Policy has been in effect for less than 60 days and is not a renewal with us, we may cancel for any reason by letting you know at least 10 days before the date cancellation takes effect. c. When this Policy has been in effect for 60 days or more, or at any time if it is a renewal with us, we may cancel:

(1) If there has been a material misrepresentation of fact which if known to us would have caused us not to issue the Policy; or (2) If the risk has changed substantially since the Policy was issued. This can be done by letting you know at least 30 days before the date cancellation takes effect.

d. When this Policy is written for a period of more than one year, we may cancel for any reason at the anniversary by letting you know at least 30 days before the date cancellation takes effect.

3. When this Policy is canceled, the premium for the period from the date of cancellation to the expiration date will be refunded pro rata. 4. If the return premium is not refunded with the notice of cancellation or when this Policy is returned to us, we will refund it within a reasonable time after the date cancellation takes effect.

D. Nonrenewal We may elect not to renew this Policy. We may do so by delivering to you, or mailing to you at your mailing address shown in the Declarations, written notice at least 30 days before the expiration date of this Policy. Proof of mailing will be sufficient proof of notice. E. Assignment Assignment of this Policy will not be valid unless we give our written consent. F. Subrogation An "insured" may waive in writing before a loss all rights of recovery against any person or organization. If not waived, we may require an assignment of rights of recovery for a loss to the extent that payment is made by us. If an assignment is sought, an "insured" must sign and deliver all related papers and cooperate with us. Subrogation does not apply to Coverage F or Paragraph C. Damage To Property Of Others under Section II – Additional Coverages. G. Death If any person named in the Declarations or the spouse, if a resident of the same household, dies, the following apply:

1. We insure the legal representative of the deceased but only with respect to the premises and property of the deceased covered under the Policy at the time of death; and 2. "Insured" includes:

a. An "insured" who is a member of your household at the time of your death, but only while a resident of the "residence premises"; and b. With respect to your property, the person having proper temporary custody of the property until appointment and qualification of a legal representative.

H. Policy Period Under Section I, this Policy applies only to loss which occurs during the policy period. Under Section II, this Policy applies only to "bodily injury" or "property damage" which occurs during the policy period. I. Home-sharing Host Activities Verification Requirements With respect to "home-sharing host activities", we must be provided, as often as we reasonably require, with information concerning the number of:

1. Rental agreements or contracts entered into by an "insured"; and 2. Nights the "residence premises" was occupied, in whole or in part, by "home-sharing occupants"

Analysis:

This last section contains conditions that apply to both Sections I and II; these are general conditions that apply to the whole policy. The first is liberalization, which simply means that changes that the carrier makes to coverage that expands coverage without charging additional premium are effective when the carrier makes that change as long as it is within sixty days before or during the policy period. This gives the insured broadened coverage as soon as the carrier implements it. However, the clause does not apply when both broadening and restrictions of coverage are implemented at the same time; whether that involves a new edition of the policy or an amendatory endorsement. It's one thing to expand coverage for an insured immediately, but restricting coverages is something else. Insureds should receive advance notice before coverage is restricted.

Any waiver or changes of policy provisions must be in writing by the carrier to be valid. An agent or other representative of the company can't verbally state that provisions have been changed and have that be effective for coverage. A request by the carrier for any appraisal or examination does not waive any of the carrier's rights. A carrier may still deny a claim after receiving the requested information.

An insured or the insurer may cancel the policy. The insured can cancel a policy for any reason and simply has to send the policy back to the insurer or let it know in writing the date the cancellation is to take effect. If an insured finds cheaper coverage with another company, he can cancel his current policy and go with the other insurer.

For the insurer to cancel a policy however, there are certain procedures to follow. First, the insurer cannot cancel for just any reason; it must be for the reasons listed in the policy. The insurer also must let the insured know of the cancellation in writing by delivering the cancellation or mailing it to the last known address of the insured. Timing is a consideration as well; if the insured has failed to pay the premium when due, then the insurer can cancel the policy at that time with ten days' notice to the insured before the cancellation takes effect. Likewise, if the policy is less than sixty days old and is not a renewal, the carrier can cancel the policy for any reason with ten days notice.

However, things change when the policy has been in force for a longer period of time. When the policy has been in force for sixty days or more, even if it is a renewal, the carrier can cancel only for certain reasons. Those reasons are if there has been material misrepresentation of fact which had the insurer known of these facts would not have issued the policy, or if the risk has changed substantially since the policy was issued. The insurer must provide thirty days' notice. If the insured failed to disclose on the application that he has several dangerous dogs on premises, that would be material misrepresentation. Likewise, if the insured didn't have any pets at the time of application but later adopted several dangerous dogs, that would be a substantial change in condition increasing the hazards. At renewal the insurer may give thirty days' notice of cancellation.

However, each state has statutes regarding cancellation and nonrenewal parameters. If the state requirements are more generous than the policy requirements, then the state regulations will take precedence.

Upon cancellation of the policy, the premium for the period from the date of cancellation to the expiration date is refunded pro rata to the insured. If the return premium is not issued with the notice of cancellation or when the policy is returned it will be refunded to the insured within a reasonable time. There is no definition of what exactly a reasonable time is.

The insurer may non-renew a policy when it reaches the end of the policy period by providing the insured with thirty days' notice of nonrenewal. As with cancellation, notice is delivered to or mailed to the insured at the address on the declarations.

Assignment of a policy is not allowed without the insurer's consent. An assignment is when an insured transfers his rights under the policy to another person. Logically an insurer will not accept this unless they have had a chance to review who the coverage is being transferred to.

Subrogation is an insured's right of recovery against a party liable for damages or injuries sustained by an insured. The right of subrogation may be waived as long as it occurs before an incident. If the rights are not waived then the insurer can require an insured to assign those rights to the insurer to the extent the insurer has paid the insured for the loss. Subrogation does not apply to everything; it does not apply to coverage for Medical Payments or Damage to Property of Others.

The provisions for the death of the policyholder are straightforward. If the insured dies, then the legal representative of the deceased is insured with respect to the premises and property of the deceased covered at the time of death. "Insured" includes members of the household still living in the premises and the person having proper temporary custody of the property until the appointment of a legal representative. For example an insured dies leaving the wife in the home. She is covered as an insured, since she has temporary custody of the property until she or someone else is appointed the executor of the estate.

The policy applies only to losses that apply during the policy period. Losses that occur outside of the policy period would be covered under the policy in force at that time. The same applies for losses under Section II as well; only incidents that occur during the policy period are covered.

Specific requirements are added for "home-sharing host activities". The insurer is to be provided with information concerning the number of rental agreements entered into by an insured and the nights the premises was occupied by "home-sharing occupants". This information is to be provided as often as the insurer reasonably requires it. The insurer needs this information to be sure the home-sharing activities have not become so frequent that the dwelling has become more of a hotel or bed and breakfast of sorts than a private residence. Those types of operations need to be on separate policies.

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