Section I Perils Insured Against

Section I Coverage C Personal Property

Section I Exclusions

Section I Conditions

Liability Coverages and Exclusions A-D

Exclusion E Coverages E. F and G

Section II Additional Coverages and Conditions

Coverage D Loss of Use

D. Coverage D – Loss Of Use The limit of liability for Coverage D is the total limit for the coverages in 1. Additional Living Expense, 2. Fair Rental Value and 3. Civil Authority Prohibits Use below.

1. Additional Living Expense If a loss covered under Section I makes that part of the "residence premises" where you reside not fit to live in, we cover any necessary increase in living expenses incurred by you and residents of your household who are:

a. Your relatives; or b. Other persons under the age of 21 and in your care or the care of a resident of your household who is your relative; so that your household can maintain its normal standard of living. Payment will be for the shortest time required to repair or replace the damaged property or, if your household permanently relocates, the shortest time required for your household to settle elsewhere.

2. Fair Rental Value If a loss covered under Section I makes that part of the "residence premises" rented to others or held for rental by you not fit to live in, we cover the fair rental value of such premises less any expenses that do not continue while it is not fit to live in. However, we do not cover any fair rental value arising out of or in connection with "home-sharing host activities". Payment will be for the shortest time required to repair or replace the damaged property. 3. Civil Authority Prohibits Use If a civil authority prohibits you from use of the "residence premises" as a result of direct damage to neighboring premises by a Peril Insured Against, we cover the loss as provided in 1. Additional Living Expense and 2. Fair Rental Value above for no more than two weeks. 4. Loss Or Expense Not Covered We do not cover loss or expense due to cancellation of a lease or agreement. The periods of time under 1. Additional Living Expense, 2. Fair Rental Value and 3. Civil Authority Prohibits Use above are not limited by expiration of this Policy.

Analysis

Coverage D is Loss of Use, and includes four different coverages; additional living expenses, fair rental value, civil authority prohibits use, and loss or expense not covered. There are minor changes from the previous policy. Additional living expenses provides coverage for additional expenses incurred by an insured because the damage to the dwelling has made the premises uninhabitable. The policy now clearly states that coverage extends to residents of the household who are relatives of the insured, or others under the age of 21 and in the care of a resident relative. This change was made so that it was clear that all family members were covered, and not just the named insured.

We receive many questions concerning this coverage. The coverage allows the insured to maintain his normal standard of living. So if the insured normally eats out at a nice restaurant when he eats out, then if the property is damaged, the expenses for eating at that restaurant should be covered. Likewise, if the insured frequents McDonald's, then those expenses are covered. What is not covered is an insured who normally frequents McDonald's suddenly dining at all the best restaurants in town. If the insured has a pool and uses it daily, then the temporary living quarters for that insured should include a pool or access should be arranged. Pets should be accommodated as well; if the insured normally sleeps with Fluffy, then a temporary residence that allows pets is where the insured should be housed.

Remember the coverage is for additional expenses. For example, the insured's monthly expenses are $2000 a month including utilities. After the loss, the insured is paying an additional $4,000 a month. That $4,000 would be covered, since it is in addition to his normal monthly expenses; his monthly expenses are his old expenses plus $4,000, giving him $6,000 a month. However, if the insured's monthly expenses dropped to $1,000, then only $3,000 is truly additional costs for the insured, since he normally pays $2,000 a month but has had a reduction of his normal expenses of $1,000. Therefore, of the $4,000 expenses for the alternate residence, $1,000 is costs the insured would normally have expended on a normal basis, and only $3,000 is additional expenses.

Fair rental value provides coverage for loss of rents if the insured premises is damaged and the insured was renting out part of the premises to others. The coverage has been changed to specifically exclude loss related to any "home-sharing host activities". The fair rental value coverage is designed for more long-term rentals, and not short-term situations as is found in many home-sharing arrangements. Payment is for the shortest time to repair the damaged property.

Civil authority prohibiting use of the premises often occurs when an area has been impacted by a disaster such as wildfires, tornadoes, or other events causing damage throughout an area. The local authorities may prohibit access to an insured's property because of damage to a neighboring premises. Because of a wildfire that came through the area, there may be debris in the road and downed power lines; authorities may restrict access until the road can be cleared and power restored. Coverage is for a maximum of 2 weeks.

Loss or expenses not covered states that there is no coverage provided if damage to premises results in loss or expenses caused by the cancellation of a lease or agreement. If the insured sustains a loss and the person who had agreed to rent the apartment over the garage cancels the lease, there is no coverage. Additional living expenses, fair rental value and civil authority coverage are not limited by the policy expiration. If a loss occurs 2 days before the policy expires, these coverages will apply as normal.

Coverage E Additional Coverages

E. Additional Coverages

1. Debris Removal

a. We will pay your reasonable expense for the removal of:

(1) Debris of covered property if a Peril Insured Against that applies to the damaged property causes the loss; or (2) Ash, dust or particles from a volcanic eruption that has caused direct loss to a building or property contained in a building. This expense is included in the limit of liability that applies to the damaged property. If the amount to be paid for the actual damage to the property plus the debris removal expense is more than the limit of liability for the damaged property, an additional 5% of that limit is available for such expense.

b. We will also pay your reasonable expense, up to $3,000, for the removal from the "residence premises" of:

(1) Your trees felled by the peril of Windstorm or Hail or Weight of Ice, Snow or Sleet; or (2) A neighbor's trees felled by a Peril Insured Against under Coverage C; provided the trees: (3) Damage a covered structure; or (4) Do not damage a covered structure, but:

(a) Block a driveway on the "residence premises" which prevents a "motor vehicle", that is registered for use on public roads or property, from entering or leaving the "residence premises"; or (b) Block a ramp or other fixture designed to assist a handicapped person to enter or leave the dwelling building. The $3,000 limit is the most we will pay in any one loss, regardless of the number of fallen trees. No more than $1,500 of this limit will be paid for the removal of any one tree. This coverage is additional insurance.

2. Reasonable Repairs

a. We will pay the reasonable cost incurred by you for the necessary measures taken solely to protect covered property that is damaged by a Peril Insured Against from further damage. b. If the measures taken involve repair to other damaged property, we will only pay if that property is covered under this Policy and the damage is caused by a Peril Insured Against. This coverage does not:

(1) Increase the limit of liability that applies to the covered property; or (2) Relieve you of your duties, in case of a loss to covered property, described in C.3. under Section I – Conditions.

3. Trees, Shrubs And Other Plants We cover trees, shrubs, plants or lawns, on the "residence premises", for loss caused by the following Perils Insured Against:

a. Fire or Lightning; b. Explosion; c. Riot or Civil Commotion; d. Aircraft; e. Vehicles not owned or operated by a resident of the "residence premises"; f. Vandalism or Malicious Mischief; or g. Theft. We will pay up to 5% of the limit of liability that applies to the dwelling for all trees, shrubs, plants or lawns. No more than $1,500 of this limit will be paid for any one tree, shrub or plant. We do not cover: h. Property, other than "cannabis", grown for "business" purposes; or i. "Cannabis" whether or not grown for "business" purposes. This coverage is additional insurance.

4. Fire Department Service Charge We will pay up to $500 for your liability assumed by contract or agreement for fire department charges incurred when the fire department is called to save or protect covered property from a Peril Insured Against. We do not cover fire department service charges if the property is located within the limits of the city, municipality or protection district furnishing the fire department response. This coverage is additional insurance. No deductible applies to this coverage.

Analysis

The next section is additional coverages; eleven different coverages are added here. The first additional coverage is debris removal, which provides coverage for the removal of debris of covered property if a covered peril damaged the property, or ash, dust or particles from a volcanic eruption caused direct damage to a building or property within a building. For example, a fire burns a house and there is burned property that needs to be removed from the premises. That would be covered. However, if an earthquake damaged the property, the removal of damaged property will not be covered since earthquake is not a covered cause of loss.

Coverage for damage caused by volcanic ash, dust or particles is specific – the ash or dust itself must cause the damage, not the attempts to clean up the ash, dust or particles. If ash accumulates on the roof such that the roof collapse, that would be covered. If the insured caused scratches to the windows while trying to clean off the ash or dust, that will not be covered, since it is the insured's actions, not the particles themselves, causing the damage.

The amount paid for debris removal is included in the property limit. If the policy limit for Coverage A is $250,000, then any debris removal expenses are part of that $250,000. In event of a total loss, the full limit of the policy is apt to be paid for the loss itself; in such situations, an additional 5% of that limit is available for debris removal.

A special limit applies to removal of trees felled by windstorm, hail, or weight of ice, snow or sleet, or a neighbor's tree felled by a peril insured against under the Coverage C named perils if the tree damages a covered structure or blocks a driveway on the "residence premises" such that a motor vehicle cannot enter or leave the premises, or a ramp or other fixture allowing a handicapped person to enter or exit the building is blocked. The limit has been increased from $1,000 to $3,000 in the 2022 form. No more than $1,500 will be paid for the removal of any one tree, and this limit has been increased as well, from $500 to $1,500. This is additional coverage.

Once a property has been damaged, there is coverage for reasonable repairs to protect that property from further damage. Again, the property must be damaged by a covered peril. This coverage does not increase the coverage limit nor does it relieve the insured of any duties under the conditions section that requires protecting the property and making repairs necessary to protect the property.

Trees, shrubs, and other plants receive special coverage. Coverage is provided only for damage from fire or lightning, explosion, riot or civil commotion, aircraft, vehicles not owned by a resident of the "residence premises", vandalism or malicious mischief or theft. Up to 5% of the limit of liability of the dwelling is available for coverage for all trees, shrubs plants, or lawns. No more than $1,500 is paid per tree, shrub, or plant, and this is an increase from the previous $500 limit. The exclusion for property grown for "business" purposes has been modified and now states that property other than "cannabis" grown for business is excluded, and a new exclusion for "cannabis", whether or not grown for "business" purposes, is added. So regardless as to whether or not "cannabis" is legal in any particular state, under the new form "cannabis" grown by an insured, even for personal use, is excluded from coverage.

The Fire Department Service charge coverage remains unchanged. Up to $500 is available if the insured has an agreement or contract with a fire department for charges to save or protect covered property from an insured peril. Coverage does not apply if the insured property is within the limits of a city, municipality or protection district that is furnishing the fire department response. When the city fire department responds that should be covered by local taxes; this coverage applies when the insured is in a more remote area and must pay the department when services are rendered.

5. Property Removed We insure covered property against direct loss from any cause while being removed from a premises endangered by a Peril Insured Against and for no more than 30 days while removed. This coverage does not increase the limit of liability that applies to the property being removed. 6. Loss Assessment

a. We will pay up to $2,000 for your share of loss assessment charged during the policy period against you, as owner or tenant of the "residence premises", by a corporation or association of property owners. The assessment must be made as a result of direct loss to property, owned by all members collectively, of the type that would be covered by this Policy if owned by you, caused by a Peril Insured Against under Coverage A, other than:

(1) Earthquake; or (2) Land shock waves or tremors before, during or after a volcanic eruption. The limit of $2,000 is the most we will pay with respect to any one loss, regardless of the number of assessments. We will only apply one deductible, per unit, to the total amount of any one loss to the property described above, regardless of the number of assessments.

b. We do not cover assessments charged against you or a corporation or association of property owners by any governmental body. c. Paragraph Q. Policy Period under Section I – Conditions does not apply to this coverage. This coverage is additional insurance.

7. Collapse

a. The coverage provided under this Additional Coverage – Collapse applies only to an abrupt collapse. b. For the purpose of this Additional Coverage – Collapse, abrupt collapse means an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its intended purpose. c. This Additional Coverage – Collapse does not apply to:

(1) A building or any part of a building that is in danger of falling down or caving in; (2) A part of a building that is standing, even if it has separated from another part of the building; or (3) A building or any part of a building that is standing, even if it shows evidence of cracking, bulging, sagging, bending, leaning, settling, shrinkage or expansion.

d. We insure for direct physical loss to covered property involving abrupt collapse of a building or any part of a building if such collapse was caused by one or more of the following:

(1) The Perils Insured Against named under Coverage C; (2) Decay, of a building or any part of a building, that is hidden from view, unless the presence of such decay is known to an "insured" prior to collapse; (3) Insect or vermin damage, to a building or any part of a building, that is hidden from view, unless the presence of such damage is known to an "insured" prior to collapse; (4) Weight of contents, equipment, animals or people; (5) Weight of rain which collects on a roof; or (6) Use of defective material or methods in construction, remodeling or renovation if the collapse occurs during the course of the construction, remodeling or renovation.

e. Loss to an awning, fence, patio, deck, pavement, swimming pool, underground pipe, flue, drain, cesspool, septic tank, foundation, retaining wall, bulkhead, pier, wharf or dock is not included under d.(2) through (6) above, unless the loss is a direct result of the collapse of a building or any part of a building. f. This coverage does not increase the limit of liability that applies to the damaged covered property.

8. Glass Or Safety Glazing Material

a. We cover:

(1) The breakage of glass or safety glazing material which is part of a covered building, storm door or storm window; (2) The breakage of glass or safety glazing material which is part of a covered building, storm door or storm window when caused directly by earth movement; and (3) The direct physical loss to covered property caused solely by the pieces, fragments or splinters of broken glass or safety glazing material which is part of a building, storm door or storm window.

b. This coverage does not include loss:

(1) To covered property which results because the glass or safety glazing material has been broken, except as provided in a.(3) above; or (2) On the "residence premises" if the dwelling has been vacant for more than 60 consecutive days immediately before the loss, except when the breakage results directly from earth movement as provided in a.(2) above. A dwelling being constructed, remodeled, renovated or repaired is not considered vacant.

c. This coverage does not increase the limit of liability that applies to the damaged property.

9. Landlord's Furnishings We will pay up to $3,000 for your appliances, carpeting and other household furnishings, in each apartment on the "residence premises" regularly rented or held for rental to others by an "insured", for loss caused by a Peril Insured Against in Coverage C, other than Theft. This limit is the most we will pay in any one loss regardless of the number of appliances, carpeting or other household furnishings involved in the loss. This coverage does not increase the limit of liability applying to the damaged property.

Analysis

There are occasions when an insured has a warning that the property is in peril and has time to move the property to a safe location. Coverage is provided against any peril as long as the property was in danger from a covered peril. For example, a wildfire is nearing the insured's property and the insured relocates property to a safe location. While at that location, an earthquake occurs damaging the insured's property. While earthquake isn't a covered peril, since the property had been relocated to avoid a covered peril, the fire, there is coverage for the earthquake. Had the property been moved because of the threat of earthquake, since that is not a covered peril, there would be no coverage in this section if the property was damaged at that secondary location. Coverage is only for 30 days.

In the previous edition of the policy the next section was credit card, electronic fund transfer card or access device, forgery and counterfeit money. That section has been removed from the policy in the 2022 editon. Since many banks now offer protection to insureds when bank cards or numbers are stolen, ISO removed this coverage from the main policy. Coverage is available by endorsement.

Loss assessment coverage is for when an insured is assessed by a corporation or association of property owners for direct loss to property that is owned by all members collectively and would be covered by the policy if owned individually by the insured. If the insured lives in a community with a community clubhouse and pool, and the clubhouse is damaged by fire and the community as a whole is assessed for part of the loss, this coverage will pay $2,000 per loss. This is an increase from the previous 2011 form which covered only $1,000. Assessments charged by a governmental body are not covered.

The coverage for collapse is unchanged from the prior policy. Collapse, which means an abrupt falling down or caving in of a building or part of a building and results in the premises being unusable for its intended purpose is what is covered. Buildings that are sagging, leaning, bulging, bending, or settling are not covered, even if they have separated from another part of the building. The building must actually collapse and not just be in damage of collapsing. The collapse must be caused by specific perils; the named Coverage C perils, decay that is hidden from view unless known to an insured before the collapse, hidden insect or vermin damage again unless known to the insured before the collapse, weight of contents, equipment, animals or people, weight of rain which collects on a roof, or use of defective material in construction, remodeling or renovation asl long as the collapse occurs during the course of construction, remodeling or renovation.

The Coverage C named perils are covered causes of loss, and the weight of people, animals, equipment, contents, or rain that collects on a roof are all covered. If the bedroom set suddenly causes the floor underneath it to collapse so the bedroom set ends up in the living room, that is covered.

The existence of insects or decay is covered only if the insured was unaware of such before the collapse. If the insured is aware of termites then it is his responsibility to have the termites removed and have the property repaired before it collapses; that is a maintenance item. The same applies to decay. However, if the deck collapses and only then the insured discovers there was rot or an insect infestation, there is coverage.

Some items are covered only if loss to the items is a direct result of the collapse of all or part of a building. These items are fences, awnings, patios, decks, pavement, swimming pools, underground pipes, flues, drains, cesspools, septic tanks, foundations, retaining walls, bulkheads, piers, wharves or docks. If the dwelling wall collapses taking with it the awning and the fence, then the awning and fence are both covered. However, if the fence collapses in and of itself and the dwelling is intact, there is no coverage for damage to the fence.

The breakage of glass and safety glazing material is covered when the glass or glazing material is part of a covered building, storm door or window; the glass or glazing material is also covered when part of a covered building, storm door or window is damaged directly by earth movement, and direct physical loss to covered property is caused by pieces, fragments or splinters of broken glass or material that is part of a building, storm door or window. For example, high winds come through an area and break the glass in the storm door to the dwelling; that is covered. The area sustains an earthquake that damages the storm doors and windows; the loss to the glass is covered, even though earthquake damage to the rest of the dwelling is excluded. During either of these two losses, the glass fragments damage the furniture and wood floor of the dwelling. That damage is covered as well. Only these specific situations are covered; other damage because of broken glass are not covered. Likewise, if the premises has been vacant for more than 60 consecutive days, unless the loss is due to earth movement, there is no coverage. A dwelling being constructed, remodeled, renovated or repaired is not considered vacant. The terms remodeled, renovated or repaired are newly added to the 2022 edition of the form for clarification. This coverage does not increase the limit of liability on the policy.

Some insured's rent part of their dwelling and can be considered landlords. There is particular coverage for property of the insured that is kept in those rental spaces, and that is Landlord's Furnishings. The limit has been increased to $3,000 from the $2,500 in the previous policy, and coverage applies to appliances, carpeting and other household furnishings in the apartments on the premises that are regularly rented or held for rental to others by the "insured". Coverage is for the Coverage C named perils other than theft. Since the property is personal property the named perils apply, and since theft is more likely when strangers are allowed on premises that is excluded. The limit is the most per loss, regardless of number of items damaged. Therefore, it is important to account for the value of the property. If the property is worth more than the limit in the policy, coverage can be increased by using the Supplemental Landlord's Furnishings Coverage form HO 05 46.

10. Ordinance Or Law

a. We will pay up to 10% of the limit of liability that applies to Coverage A for the increased costs you incur due to the enforcement of any ordinance or law which requires or regulates:

(1) The construction, demolition, remodeling, renovation or repair of that part of a covered building or other structure damaged by a Peril Insured Against; (2) The demolition and reconstruction of the undamaged part of a covered building or other structure, when that building or other structure must be totally demolished because of damage by a Peril Insured Against to another part of that covered building or other structure; or (3) The remodeling, removal or replacement of the portion of the undamaged part of a covered building or other structure necessary to complete the remodeling, repair or replacement of that part of the covered building or other structure damaged by a Peril Insured Against.

b. You may use all or part of this ordinance or law coverage to pay for the increased costs you incur to remove debris resulting from the construction, demolition, remodeling, renovation, repair or replacement of property as stated in a. above. c. We do not cover:

(1) The loss in value to any covered building or other structure due to the requirements of any ordinance or law; or (2) The costs to comply with any ordinance or law which requires any "insured" or others to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, pollutants in or on any covered building or other structure. Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. This coverage is additional insurance.

11. Grave Markers We will pay up to $5,000 for grave markers, including mausoleums, on or away from the "residence premises" for loss caused by a Peril Insured Against under Coverage C. This coverage does not increase the limits of liability that apply to the damaged covered property.

Analysis

The coverages for ordinance or law and grave markers are unchanged, other than a minor wording change in the ordinance or law coverage. The coverage now begins with the phrase We will Pay instead of You may Use for clarification. Coverage is for the increased costs an insured may incur because of the enforcement of local ordinances or laws that require or regulate the construction, demolition, remodeling, rebuilding or repair of that part of a covered building or other structure damaged by a peril insured against. This includes the demolition and reconstruction of undamaged portions of a covered building or structure when the building must be totally demolished because of the damage to another part of the building, and includes the remodeling, removal or replacement of the part of the undamaged part of a building in order to complete the remodeling, repair or replacement of the damaged building.

For example, an insured has a fire, damaging the kitchen and dining room. Local codes require different building material. That is covered under ordinance or law. Now, if part of the undamaged living room needs to be remodeled, removed or replaced in order to fix the kitchen and dining room, that is covered. Likewise, if the fire was extensive enough that the entire structure needed to be demolished and rebuilt, then this coverage applies to the destruction of the undamaged living room, bedrooms, etc. Since this coverage is a percentage of Coverage A, it is important to ensure that the insured has enough coverage in event of a large loss. All or part of the ordinance or law coverage can be used to pay increased costs to remove debris that results from the construction, demolition, remodeling, renovation, repair or replacement of property. This is different than the coverage for Debris Removal, which provides coverage for removal of damaged property, such as shingles blown off the roof during a storm. The coverage here is for the removal of the debris caused by the renovation of the property that is the result of having to adhere to local ordinances or regulations in the repair of the building.

There are some restrictions. Not covered is loss in value to any building as a result of adhering to the ordinance or law, or the cost to comply with the requirement to test for, monitor, clean up, remove, contain, treat, detoxify, neutralize or in any way respond to or assess the effects of the release of pollutants in or on any building or structure. Pollutants are defined as any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials that can be recycled, reconditioned or reclaimed.

The last additional coverage is for grave markers. Up to $5,000 is covered for grave markers, including mausoleums, on or away from the "residence premises" for loss caused by the coverage C named perils.

Includes copyrighted material of Insurance Services Office, Inc., with its permission.