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

Perils Insured Against

SECTION I – PERILS INSURED AGAINST

A. Coverage A – Dwelling And Coverage B – Other Structures

1. We insure against direct physical loss to property described in Coverages A and B. 2. We do not insure, however, for loss:

(1) An abrupt falling down or caving in;

(2) Loss of structural integrity, including separation of parts of the property or property in danger of falling down or caving in; or

(3) Any cracking, bulging, sagging, bending, leaning, settling, shrinkage or expansion as such condition relates to (1) or (2) above;

except as provided in E.7. Collapse under Section I – Property Coverages; or c. Caused by:

(1) Freezing of a plumbing, heating, air conditioning or automatic fire protective sprinkler system or of a household appliance, or by discharge, leakage or overflow from within the system or appliance caused by freezing. This provision does not apply if you have used reasonable care to:

(a) Maintain heat in the building; or

(b) Shut off the water supply and drain all systems and appliances of water.

However, if the building is protected by an automatic fire protective sprinkler system, you must use reasonable care to continue the water supply and maintain heat in the building for coverage to apply.

For purposes of this provision, a plumbing system or household appliance does not include a sump, sump pump or related equipment or a roof drain, gutter, downspout or similar fixtures or equipment;

(2) Freezing, thawing, pressure or weight of water or ice, whether driven by wind or not, to a:

(a) Fence, pavement, patio or swimming pool;

(b) Footing, foundation, bulkhead, wall, or any other structure or device that supports all or part of a building, or other structure;

(c) Retaining wall or bulkhead that does not support all or part of a building or other structure; or

(d) Pier, wharf or dock;

(3) Theft:

(a) If such loss arises out of or results from "home-sharing host activities"; or

(b) In or to a dwelling under construction, or of materials and supplies for use in the construction

until the dwelling is finished and occupied;

(4) Vandalism and malicious mischief, and any ensuing loss caused by any intentional and wrongful act committed in the course of the vandalism or malicious mischief, if:

(a) The loss arises out of or results from "home-sharing host activities"; or

(b) The dwelling has been vacant for more than 60 consecutive days immediately before the loss. A dwelling being constructed, remodeled, renovated or repaired is not considered vacant;

(5) Mold, fungus or wet rot. However, we do insure for loss caused by mold, fungus or wet rot that is hidden within the walls or ceilings or beneath the floors or above the ceilings of a structure if such loss results from the accidental discharge or overflow of water or steam from within:

(a) A plumbing, heating, air conditioning or automatic fire protective sprinkler system, or a household appliance, on the "residence premises"; or

(b) A storm drain, or water, steam or sewer pipes, off the "residence premises".

For purposes of this provision, a plumbing system or household appliance does not include a sump, sump pump or related equipment or a roof drain, gutter, downspout or similar fixtures or equipment;

or

(6) Any of the following:

(a) Wear and tear, marring, deterioration;

(b) Mechanical breakdown, latent defect, inherent vice or any quality in property that causes it to damage or destroy itself;

(c) Smog, rust or other corrosion, or dry rot;

(d) Smoke from agricultural smudging or industrial operations;

(e) Discharge, dispersal, seepage, migration, release or escape of pollutants unless the discharge, dispersal, seepage, migration, release or escape is itself caused by a Peril Insured Against named under Coverage C.

Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke,

vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed;

(f) Settling, shrinking, bulging or expansion, including resultant cracking, of bulkheads, pavements, patios, footings, foundations, walls, floors, roofs or ceilings;

(g) Birds, rodents or insects;

(h) Nesting or infestation, or discharge or release of waste products or secretions, by any animals;

or

(i) Animals owned or kept by an "insured".

Exception To c.(6)

Unless the loss is otherwise excluded, we cover loss to property covered under Coverage A or B resulting from an accidental discharge or overflow of water or steam from within a:

(i) Storm drain, or water, steam or sewer pipe, off the "residence premises"; or

(ii) Plumbing, heating, air conditioning or automatic fire protective sprinkler system or household appliance on the "residence premises". This includes the cost to tear out and replace any part of a building, or other structure, on the "residence premises", but only when necessary to repair the system or appliance. However, such tear out and replacement coverage only applies to other structures if the water or steam causes actual damage to a building on the "residence premises". We do not cover loss to the system or appliance from which this water or steam escaped. For purposes of this provision, a plumbing system or household appliance does not include a sump, sump pump or related equipment or a roof drain, gutter, downspout or similar fixtures or equipment.

Section I – Exclusion A.3. Water, Paragraphs a. and c. that apply to surface water and water below the surface of the ground do not apply to loss by water covered under c.(5) and (6) above.

Under 2.b. and c. above, any ensuing loss to property described in Coverages A and B not precluded by any other provision in this Policy is covered.

Analysis

The Perils Insured Against section does not have many updates from the previous policy. Under coverage A the perils are open perils, so only what is excluded is not covered. Therefore, under Perils Insured Against, the policy lists perils that are not covered under coverages A and B. The first thing not insured against are the Exclusions listed later in the policy which will be discussed in a later section.

Collapse

Next comes the exclusion for collapse. This exclusion works in conjunction with the earlier mentioned Additional Coverage of Collapse. That section identifies what is considered to be a collapse and what coverage is provided. This section identifies what is excluded apart from that additional coverage. The collapse coverage applies when the property has had an abrupt falling down or caving in of the property that results in the building being uninhabitable for its intended purpose. Not covered is loss of structural integrity including separation of parts of the property or property in danger of falling down or caving in, or cracking, bulging, sagging, bending, leaning, settling, shrinkage or expansion as related to the aforementioned issues. Unless the property has actually collapsed, the sagging, leaning, cracking, or even separation from the main structure if the parts are still standing, are not covered. In order for a collapse to be covered, the property must have actually collapsed and not be just partially collapsed or in danger of collapsing completely. 

Freezing

The next peril not covered is freezing of a plumbing, heating, air conditioning or automatic sprinkler system or of a household appliance, or by discharge, overflow or leakage from within the system or appliance caused by freezing. Freezing is often a maintenance issue. An exception is made if the insured has used reasonable care to maintain heat in the building, or has shut off the water and drained all systems or appliances. However, if the premises has a sprinkler system, the insured needs to maintain the water supply and keep the heat at an appropriate temperature so the pipes don't freeze. The policy doesn't say what that temperature might be, but the building industry recommends setting the heat no lower than 55 degrees. That should protect the dwelling from all but an unusually harsh freeze. An insured may travel to warmer climates through the winter; if he leaves the heat at 55 and the water on, even if a loss occurs, there should be coverage barring any other exclusion.  The winter storm in Texas of 2021 brought up an unusual situation – the power went out, causing freezing of pipes that damaged property. The freezing was beyond the control of the insureds; the insureds had not set the heat too low, heat was unavailable for a certain period of time. That should be covered, as it was due to a storm and not negligence of an insured. 

The policy then explains that for this particular part of the policy, a plumbing system does not include a sump, sump pump or related equipment, or a roof drain, gutter, downspout, or similar fixtures or equipment. All these systems move water away from the premises; the sump pump moves rising groundwater away from the lowest part of the house such as the basement. The roof drains, gutters and downspouts move rainwater away from the premises. 

Plumbing System

So what is a plumbing system? The policy does not describe it.  Merriam Webster online defines plumbing as: the apparatus (such as pipes and fixtures) concerned in the distribution and use of water in a building. The Britannica online defines it as: system of pipes and fixtures installed in a building for the distribution and use of potable (drinkable) water and the removal of waterborne wastes. It is usually distinguished from water and sewage systems that serve a group of buildings or a city. So what we have are the pipes and fixtures that bring potable water into the dwelling, so that an insured can take a bath, drink water and wash dishes, and have dirty dish water run down the drain into the sewer system. 

The freezing exclusion continues and excludes not just the freezing, but also the thawing, pressure or weight of water or ice, whether or not driven by wind, to a number of structures. These structures are a fence, pavement, patio, swimming pool, footing, foundation, bulkhead, wall, or any other structure or supporting device that supports all or part of a building, or retaining wall or bulkhead that does not support all or part of a building or other structure, or a pier, wharf or dock. When water freezes and thaws, it expands and contracts. This action can cause pressure on solid objects causing damage over time. The listed items are particularly susceptible to such pressures from water or ice, and therefore there is no coverage when water or ice pushes on these items and causes damage. 

Theft is generally an issue related to personal property; however there is an exclusion here for theft if such loss arises out of "home-sharing host activities", or to a dwelling under construction, or of materials or supplies used for the construction of the building until it is finished and occupied. The exclusion for theft related to "home-sharing host activities" is newly added to the 2022 form. Likewise, an exclusion for vandalism and malicious mischief as a result of "home-sharing host activities" is added as well. The standard exclusion for vandalism and malicious mischief if the property has been vacant for more than 60 consecutive days remains the same. A dwelling being constructed, renovated, remodeled or repaired is not considered vacant. For clarity this has been changed and the terms renovated, remodeled or repaired have been added to the exception. Vacant property is more susceptible to vandalism as it is not occupied therefore making it easier for someone to damage the property unseen. 

Mold, Fungus, Rot

Mold, fungus or wet rot are generally damages that occur over time and therefore are excluded. An exception exists for mold, fungus or rot that is hidden within the walls, ceilings or beneath floors or above the ceilings if the loss results from an accidental discharge from within certain equipment. That equipment is plumbing, heating, air conditioning or automatic sprinkler systems, or household appliances on the "residence premises", or a storm drain, water, steam or sewer pipe off the "residence premises". Again the policy identifies that a plumbing system or household appliance does not include sumps, sump pumps, or related equipment, or roof drains, gutters, downspouts or similar fixtures. Mold or rot that is visible is something the insured should take care of. When mold is hidden behind walls or ceilings, the insured can't be expected to know it exists, so an exception exists for such damage when it is found. A common scenario is that water is suddenly leaking onto the floor and when the wall is opened up to repair the leaking pipe, it is then discovered that the leak had been going on for a while and mold and fungus have grown behind the wall unknown to the insured. 

Note that coverage applies to plumbing, heating, air conditioning, sprinkler or leaks from household appliances on the premises, and applies to storm drains, water, steam or sewer pipes off the premises. The exact source of the water and whether it is on or off the premises is important when determining coverage. 

Any of the Following

The last section of Perils Insured Against is a list of nine various perils that are not covered. Most of these items are things that can be expected to occur as property ages, and therefore are not covered by insurance. Insurance is for the unexpected loss, not normal wear. It is important to note the principle of ejusdem generis applies here. Ejusdem generis is Latin for "of the same kind" and is often used to interpret loosely written statutes.  Where a law lists specific classes of persons or things and then refers to them in general, the general statements only apply to the same kind of persons or things specifically listed. Example: if a law refers to automobiles, trucks, tractors, motorcycles and other motor-powered vehicles, "vehicles" would not include airplanes, since the list was of land-based transportation. 

The first items listed are things that occur over time such as wear and tear, rust, marring, breakdown, latent defect and similar issues. These things can be expected to occur over time – property will wear out or break down and this is simply to be expected. A dwelling will at some point need a new roof, the siding will need to be painted or replaced, and these are just the joys of homeownership. Smog, rust, or other corrosion, dry rot or smoke from agricultural smudging or industrial operations are excluded. Smog and smoke from industrial operations are environmental factors that occur either from the environment or from industrial operations and are not the same as a fire or tornado that suddenly damages or destroys the property. 

The next exclusion is for pollution – pollution is not a defined term but is defined in this section as 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. What exactly is excluded is the discharge, dispersal, seepage, migration, release or escape of pollutants unless caused by a Coverage C named peril.  For example fire is a named peril – if a fire damages the propane tank causing propane to leak within the property, that would be covered. 

Settling, shrinking, bulging or expansion, including resultant cracking of bulkheads, pavements, patios, footing, foundations, walls, floors, roofs or ceilings is also excluded. Settling of a house is to be expected, and the resultant cracks that might occur in the ceilings, walls and other property is not covered. 

Damage caused by birds, rodents or insects is not covered, nor is nesting or infestation, or discharge or release of waste products or secretions by any animals, or damage caused by animals owned or kept by an insured. It is not unusual for wild animals such as raccoons, bats, squirrels, skunks and other animals to get into a homeowner's attic or under the crawl space, damaging the property by not only digging or eating through siding but also making a nest and raising young, all the while eating and eliminating waste and generally making a mess and damaging property. All of this type of damage is excluded. Likewise, damage caused by an insured's pet is excluded as well. An insured should have her dogs trained properly so that they don't scratch at the door or on the floor and cause damage over the course of time. But what if the pet suddenly damages something, and it's not something that results from wear overtime? For example Fido grabs a plastic bag the insured is bringing inside after having bought various paints from the craft store, and before the insured can catch Fido the dog manages to chew through the bag and rupture the tubes of paint, getting paint all over the walls and floors. This damage is not something that can be expected to occur over time, and a case can be made for coverage. We refer to the ejusdem generis rule; the list of exclusions is for things like wear and tear, inherent vice, etc. If the water heater rusts out that is not covered, but if it explodes it is. Likewise, the dog scratching at the back door is wear and tear, while chewing up paint bottles is unexpected and should be covered. 

This list of 9 exclusions related to things that can be expected to occur over time ends with an exception for ensuing losses stemming from accidental discharge or overflow of water or steam from within a storm drain or water, steam or sewer pipe off the "residence premises", or plumbing, heating, air conditioning or sprinkler systems or household appliances that are on the "residence premises". Included in this exception is the cost to tear out and replace any part of a building or other structure on the premises when necessary to access and repair or replace the broken system or appliance. If a pipe leaks behind a wall, and the wall and the floor are damaged, then coverage is provided to tear out the wall in order to repair the pipe. The repair of the pipe itself is not covered, since that is excluded, but the tear out of the wall and the repair to the wall and the floor are both covered under this exception. This applies to other structures only if the water or steam has caused damage to a building on the "residence premises". Again the policy explains that a plumbing system does not include sumps, sump pumps or related equipment, or roof drains, gutters, downspouts or similar fixtures or equipment. 

The policy then points out that the water exclusions a. and c., which are the exclusions for flood, surface water, tides, and water below the surface of the ground that puts pressure on or leaks through a building, foundation, pool etc. do not apply to the losses by water covered in c.(5) and (6), which are the mold exclusions and the wear and tear and similar exclusions. 

Under 2. b. and c., which are all the listed perils not covered except what's listed in the exclusions section, any ensuing losses not otherwise excluded are covered. For example, an insured shuts off the heat but forgets to drain the water when he leaves for a long winter vacation. The pipes burst, flooding the property. The water causes the television to short out, starting a fire in the living room. Even though the frozen pipes are not covered, since the burst pipes resulted in a fire, and the fire is not otherwise excluded, the damage caused by the fire would be covered. Likewise, if mice build a nest in the wall and chew the wires starting a fire, the damage from the mice would be excluded but the damage from the fire would be covered since there is no exclusion for fire.

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