Section I Exclusions

Section I Conditions

Section II Liability Coverages

Section II Exclusions

Section II Additional Coverages

Section II Conditions, Sections I and II Conditions

This article discusses Section I, Property Coverages.

SECTION I – PROPERTY COVERAGES

A. Coverage A – Dwelling

1. We cover:

a. The alterations, appliances, fixtures and improvements which are part of the building contained within the "residence premises"; b. Items of real property which pertain exclusively to the "residence premises"; c. Property which is your insurance responsibility under a corporation or association of property owners agreement; or d. Structures owned solely by you, other than the "residence premises", at the location of the "residence premises".

2. We do not cover:

a. Land, including land on which the "residence premises", real property or structures are located; b. Structures rented or held for rental to any person not a tenant of the dwelling, unless used solely as a private garage; c. Structures from which any "business" is conducted; or d. Structures used to store "business" property. However, we do cover a structure that contains "business" property solely owned by an "insured" or a tenant of the dwelling, provided that "business" property does not include gaseous or liquid fuel, other than fuel in a permanently installed fuel tank of a vehicle or craft parked or stored in the structure.

Analysis

Once the definitions have been explained, the policy gets into the coverage sections. Section I contains the coverage agreements, perils insured against, exclusions and conditions that apply to all property covered by the form.

Section A. provides coverage for the dwelling components themselves. Since a condo owner does not own the entire structure, what is covered must be explained. Coverage is provided for alterations, appliances, fixtures and improvements that are part of the building within the "residence premises". Also covered are items of real property that pertain exclusively to the "residence premises"; it's possible for there to be shared patios or decks in a condo structure. The policy makes it clear that real property items, such as a deck only accessible by the insured condo owner, is covered by the policy. Additionally, property that the insured is responsible for in accordance with the corporation or association of property owners agreement is covered. This agreement is commonly called a homeowners association or HOA. The agreement identifies what part of the property a unit owner is responsible for and what part of the property the association at large is responsible for maintaining and repairing. Structures owned by the insured other than the "residence premises" at the location are covered. An insured could have a separate garage structure; that would be covered.

But there are items not covered as well. Land, including land the property is built on is not covered, nor are structures rented or held for rental to anyone not a tenant of the dwelling unless as a private garage, structures from which "business" is conducted or where "business" property is stored. The insured could rent his private garage to a friend for use for his sports car, but he could not rent the garage to a friend to store his collectibles in.

There is an exception for structures containing "business" property solely owned by an "insured" or tenant of the property, as long as that "business" property contains no gaseous or liquid fuel, unless that fuel is in the tank of a vehicle or craft parked in that structure. Fuel presents a significant fire hazard, so unless it is a limited amount in the tank of a vehicle or craft, it is not allowed. If an "insured" uses her garage to store equipment used in her yoga classes, that would be covered.

B. Coverage C – Personal Property

1. Covered Property We cover personal property owned or used by an "insured" while it is anywhere in the world. After a loss and at your request, we will cover personal property owned by:

a. Others while the property is on the part of the "residence premises" occupied by an "insured"; or b. A guest or a "residence employee", while the property is in any residence occupied by an "insured".

Analysis

In the homeowners policy Coverage B is for other structures; since most condos do not have other structures other than what was indicated in Coverage A, there is no Coverage B. The policy moves directly into Coverage C – Personal Property.

Coverage C is for personal property owned by an "insured" anywhere in the world. If a loss occurs, the insured may request that the property of others that was at the "residence premises" occupied by an "insured" be covered, or that property of a guest or "residence employee", as long as the property was in any residence occupied by an "insured" be covered as well. If the insured's nephew comes to visit and while staying with the insured a fire breaks out damaging the nephew's property, coverage is available. Likewise, if the insured travels and takes the nanny to the beach with the family and a loss occurs to the nanny's property, coverage is available as long as the property was in the residence occupied by an "insured". If the insured rented a beach house for the entire family and the nanny, there would be coverage. If the nanny was staying at a separate residence though, there would not be coverage since the property has to be in a residence occupied by an "insured".

2. Limit For Property At Other Locations

a. Other Residences Our limit of liability for personal property usually located at an "insured's" residence, other than the "residence premises", is 10% of the limit of liability for Coverage C, or $1,500, whichever is greater. However, this limitation does not apply to personal property:

(1) Moved from the "residence premises" because it is:

(a) Being remodeled, renovated or repaired; and (b) Not fit to live in or store property in; or

(2) In a newly acquired principal residence for 30 days from the time you begin to move the property there.

b. Self-storage Facilities Our limit of liability for personal property owned or used by an "insured" and located in a self-storage facility is 10% of the limit of liability for Coverage C, or $1,500, whichever is greater. However, this limitation does not apply to personal property:

(1) Moved from the "residence premises" because it is:

(a) Being remodeled, renovated or repaired; and (b) Not fit to live in or store property in; or

(2) Usually located in an "insured's" residence, other than the "residence premises".

Analysis

Under Limit for Property at Other Locations, some changes have been made for clarification, and the limit has been raised. When an insured's personal property that is usually located at an "insured's" residence other than the "residence premises", coverage is limited to 10% of the Coverage C limit or $1,500, whichever is greater. The previous limit for such property was $1,000. But what exactly is an insured's residence other than the "residence premises"? Remember the "residence premises" is the unit shown in the declarations – a residence that is not a residence premises could be property as defined under "Insured location", such as a temporary location where the insured is residing or a premises occasionally rented to an insured for other than business use, and similar locations. Examples would be hotel rooms, vacation rental homes, and similar areas.

The limit does not apply in all situations, however. If the property has been moved from the "residence premises" because the premises is being remodeled, renovated or repaired and is not fit to live in or store property in, then the limit does not apply. If the insured had a fire and must live elsewhere and many belongings had to be put in storage until repairs were made, the full coverage limit would apply. Also, if the property is moved to a newly acquired principal residence, the limit does not apply for 30 days from the time the insured begins to move the property to the new location.

The coverage is similar for property kept in self-storage facilities. A limit applies, which again has been increased to $1,500 from $1,000 or 10 percent of Coverage C, whichever is greater. Again, the limit does not apply if property has been removed from the dwelling because it is being remodeled, renovated or repaired and is not fit to live in or store property in, or the property is usually located in an "insureds" residence, other than the "residence premises".

3. Special Limits Of Liability The special limit for each category shown below is the total limit for each loss for all property in that category. These special limits do not increase the Coverage C limit of liability.

a. $300 on money, bank notes, bullion, gold other than goldware, silver other than silverware, platinum other than platinumware, coins, medals, scrip, stored value cards and smart cards. b. $2,000 on securities, accounts, deeds, evidences of debt, letters of credit, notes other than bank notes, manuscripts, personal records, passports, tickets and stamps. This dollar limit applies to these categories regardless of the medium (such as paper or computer software) on which the material exists. This limit includes the cost to research, replace or restore the information from the lost or damaged material. c. $2,000 on watercraft of all types, including their trailers, furnishings, equipment and outboard engines or motors. d. $2,000 on trailers or semitrailers not used with watercraft of all types. e. $2,000 for loss by theft of jewelry, watches, furs, precious and semiprecious stones. f. $3,000 for loss by theft of firearms and related equipment. g. $3,000 for loss by theft of silverware, silver-plated ware, goldware, gold-plated ware, platinumware, platinum-plated ware and pewterware. This includes flatware, hollowware, tea sets, trays and trophies made of or including silver, gold or pewter. h. $3,000 on property, on the "residence premises", used primarily for "business" purposes. i. $1,500 on property, away from the "residence premises", used primarily for "business" purposes. However, this limit does not apply to antennas, tapes, wires, records, disks or other media that are:

(1) Used with electronic equipment that reproduces, receives or transmits audio, visual or data signals; and (2) In or upon a "motor vehicle".

j. $2,000 on portable electronic equipment that:

(1) Reproduces, receives or transmits audio, visual or data signals; (2) Is designed to be operated by more than one power source, one of which is a "motor vehicle's" electrical system; and (3) Is in or upon a "motor vehicle".

k. $300 on antennas, tapes, wires, records, disks or other media that are:

(1) Used with electronic equipment that reproduces, receives or transmits audio, visual or data signals; and (2) In or upon a "motor vehicle". l. $2,000 on model or hobby aircraft not used or designed to carry people or cargo.

Analysis

As in the homeowners policy, coverage for certain types of property is limited. It could be property that is generally valuable and subject to certain types of loss which is better covered under certain endorsements, or vehicles that should be covered elsewhere. Note that the limit on securities, accounts, deeds, evidences of debt includes the cost to research, replace or restore the information from the lost or damaged material. One new category has been added – the special limit of $2,000 for model or hobby aircraft not used or designed to carry people or cargo. With the popularity of drones and the availability of some very expensive models, a limit was added in order to control the exposure. Most of the special limits amounts have been increased, as follows below. Note that certain categories are only limited for one peril, theft. Some property is more attractive to thieves and is at a higher risk of being stolen.

4. Property Not Covered We do not cover:

a. Articles separately described and specifically insured, regardless of the limit for which they are insured, in this or other insurance; b. Animals, birds or fish; c. "Motor vehicles". This includes a "motor vehicle's" equipment, and parts, that are in or upon the "motor vehicle". However, this Paragraph 4.c. does not apply to:

(1) Portable electronic equipment that:

(a) Reproduces, receives or transmits audio, visual or data signals; and (b) Is designed so that it may be operated from a power source other than a "motor vehicle's" electrical system.

(2) "Motor vehicles" not required to be registered for use on public roads or property which are:

(a) Used solely to service a residence; or (b) Designed to assist the handicapped;

d. Aircraft, meaning any contrivance used or designed for flight, including any parts whether or not attached to the aircraft. We do cover model or hobby aircraft not used or designed to carry people or cargo; e. Hovercraft and parts. Hovercraft means a self-propelled motorized ground effect vehicle and includes, but is not limited to, flarecraft and air cushion vehicles; f. Property of:

(1) A "home-sharing occupant"; (2) Any other person occupying the "residence premises" as a result of any "home-sharing host activities"; and (3) Roomers, boarders and other tenants, except property of roomers and boarders related to an "insured";

g. Property in:

(1) A space while rented or primarily held for rental to a "home-sharing occupant"; or (2) Subject to Paragraph g.(1), an apartment regularly rented or held for rental to others by an "insured";

h. Property used primarily for "home-sharing host activities"; i. Property rented or held for rental to others off the "residence premises"; j. "Business" data, including such data stored in:

(1) Books of account, drawings or other paper records; or (2) Computers and related equipment. We do cover the cost of blank recording or storage media and of prerecorded computer programs available on the retail market;

k. Credit cards, electronic fund transfer cards or access devices used solely for deposit, withdrawal or transfer of funds; l. Water or steam; m. Virtual currency of any kind, by whatever name known, whether actual or fictitious including, but not limited to, digital currency, crypto currency or any other type of electronic currency; or n. Any:

(1) Controlled Substances, other than "cannabis", as defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812; and (2) "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 Paragraph 4.n. does not apply to: (3) Prescription drugs obtained following the lawful orders of a licensed health care professional; or (4) Goods or products containing or derived from hemp, including, but not limited to:

(a) Seeds; (b) Food; (c) Clothing; (d) Lotions, oils or extracts; (e) Building materials; or (f) Paper. However, this Paragraph 4.n.(4) does not apply to the extent any such goods or products are prohibited under an applicable state or local statute, regulation or ordinance in the state where such goods or products are located.

Analysis

As with any policy there is always some property that coverage is not provided for, and that is what is found in the Property Not Covered sections. Some changes have been made and will be explained.

The first property not covered is that which is specifically insured either by endorsement to this policy or by some other policy. An insured may schedule jewelry or firearms for particular limits on this policy or may have a separate policy for those items entirely. Regardless, if property is covered elsewhere, it will not be covered here as well.

Animals, birds or fish are not covered – there is no way to put a value on an insured's pets, so they are not covered by the policy. Whether an insured spent hundreds of dollars on a purebred show pet or adopted the animal from a rescue organization, there is no way to account for the sentimental value of Hummers and Tabbo.

As always, an exclusion exists for "motor vehicles", including equipment and parts that are in or upon the "motor vehicle". This last section is new – the previous edition simply restricted equipment and parts, and did not include the phrase "that are in or upon the "motor vehicle"". This is a restriction of coverage that now mirrors the homeowners policy. An exception is made for portable electronic equipment that reproduces, receives or transmits audio, data or visual signals and is designed to operate both from the vehicle and from another power source. So a portable CD player that can be operated from the dwelling or the vehicle would be covered.

While "motor vehicles" have been excluded, there are a few exceptions. Vehicles not required to be registered for use on public roads and that are used solely to service a residence or are designed to assist the handicapped are covered. An insured's motorized wheelchair, even though it fits the definition of "motorized vehicle" would still be covered.

Aircraft are also excluded, except for model or hobby aircraft not used or designed to carry people or cargo. Hovercraft and parts are excluded, and are defined as self-propelled motorized ground effect vehicles and includes, but is not limited to, flarecraft and air cushion vehicles. Ground effect vehicles are those that move over the surface because of the reaction between air and the ground or water the vehicle is moving over.

The next exclusion is new and is for property of a "home-sharing occupant". "Home-sharing occupant" is a new definition designed to identify those renting the premises via use of a home-sharing online application. Because it involves the rental of the property, property of "home-sharing occupants" is not covered, nor is the property of others occupying the residence as a result of any "home-sharing host activities". Someone could rent the premises and bring a friend for the weekend, for example. Even though the friend had no part in making or paying for the reservations, the friend's property is not covered in event of a loss. Likewise, the property of roomers, boarders, and other tenants, unless the roomers and boarders are related to the "insured", is not covered.

Another new exclusion is for property in a space while rented or primarily held for rental to "home-sharing occupants". The exclusion for property in a space regularly rented or held for rental is the same. In these new exclusions the policy is adding an exclusion for home-sharing activities because home-sharing has become popular and coverage is an issue. The policy has been changed to make it abundantly clear that such coverage does not apply. Also, property used primarily for "home-sharing host activities" is excluded, as is property rented or held for rental to others off the "residence premises".

"Business" data, including data stored in books of account, drawings and other paper records, computers and related equipment are all excluded. The cost of blank recording or storage material is covered, but the cost to recreate the lost data is not.

Credit cards, electronic fund transfer cards and access devices are all excluded. The exception to the exclusion for coverage provided under Credit Card, Electronic Fund Transfer Card or Access Device, Forgery and Counterfeit Money has been removed because that section has also been removed from the policy. As credit cards have become adept at providing cardholders with protection against hacking and fraudulent charges, the coverage is no longer needed here. Water or steam is excluded. If there is a leak in the plumbing and the insured's water bill increases, there is no coverage. Water is not treated like other property.

The last two types of excluded property are new in this form; the exclusions are for virtual currency and controlled substances. Virtual currency of any kind, regardless of the name it is known by or whether it is actual or fictitious, including digital, crypto or other types of electronic currency is excluded. The coverage for tangible currency is limited to begin with – virtual or cryptocurrency is too hard to identify, track, and prove its existence or cause of loss.

Controlled Substances, other than "cannabis" and as defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812 are excluded. "Cannabis" is excluded whether or not it is considered a Controlled Substance. While the government dictates what is considered to be a Controlled Substance, with various states legalizing cannabis for medicinal or recreational purposes, it needs to be explained that cannabis is excluded regardless of its status. Controlled Substances include but are not limited to substances such as cocaine, LSD and all narcotics.

Exceptions do exist for prescription drugs that are obtained by an insured following the orders of a licensed health care professional, or goods or products containing or derived from hemp, including but not limited to seeds, food, clothing, lotions, oils, extracts, building materials and paper. The exception carries a caveat – if the substance is prohibited under any state or local statute, regulation or ordinance where the goods are located, the goods are then excluded.

C. 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 by a Peril Insured Against under this Policy to covered property or the building containing the property makes the "residence premises" 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

There are some changes under Loss of Use coverage related to home-sharing. The limit for Coverage D, Loss of Use, is the total limit for Additional Living Expenses, Fair Rental Value, and Civil Authority Coverage. If more than one of these coverages apply to one loss, only the total Coverage D limit applies to all coverages.

Additional Living Expense is one of the broadest coverages in the policy. It pays for increased costs incurred by the insured because the property has been damaged and is not fit to live in. Because of the damage, the insured must live someplace else, so the increased costs incurred by the insured and residents of the household who are relatives and those under the age of 21 and in the care of resident relatives are afforded coverage. This last section is new – it adds coverage for family members that wasn't listed before.

Note that coverage is for the increase in living expenses – if the insured's mortgage payments stop for some reason because of the loss, and the insured's temporary payments do not exceed that normal monthly payment, then the insured has not incurred any additional living expenses. Payments are for the shortest time required to repair or replace the damaged property or the shortest time for the family to permanently relocate elsewhere.

Fair Rental Value provides coverage for loss of rents if the property is rented and becomes not fit to live in; the coverage is for the cost of the rental value less expenses that do not continue. Newly added is an exclusion for fair rental value for rents stemming from "home-sharing host activities". As with ALE, Fair Rental Value is for the shortest time to repair or replace the damaged property.

Civil Authority coverage provides coverage when a civil authority prohibits use of the "residence premises" as a result of direct damage to neighboring property by a peril insured against, for example a fire. Coverage for ALE or Fair Rental Value is provided for two weeks. The insured property does not have to be damaged, but authorities may restrict access in order to deal with damage to neighboring property for a period of time.

Any loss or expense that results from the cancellation of a lease or agreement is not covered. Coverage in this section is strictly for the insured's loss of access to the property, not loss of any rental agreements. Coverage for ALE, Fair Rental Expense and Civil authority is not limited by the expiration of the policy. It is not unusual for restoration to be lengthy, especially if there was a catastrophic loss in the area. Even if the policy expires, coverage will continue.

D. 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) Trees you solely own 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 damage a covered structure. 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, you solely own at the location of 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 10% of the limit of liability that applies to Coverage C 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. 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.

Analysis

Additional Coverages provide a number of supplemental coverages. There are some changes that will be pointed out. The first additional coverage is Debris Removal, which provides coverage for debris of covered property damaged by a covered cause of loss or ash, dust or particles from a volcanic eruption that damages the building or property in a building. The limit for debris removal is included in the property limit; if the amount of debris removal and repairs to the property exceeds the limit, then an additional five percent of that limit is available for debris removal expenses.

A special limit applies for the removal of trees felled by windstorm or hail or weight of ice, snow or sleet, or a neighbor's tree felled by a covered peril under Coverage C as long as the tree damages a covered structure. In the previous edition of the policy, the limit of this coverage was $1,000; it has been increased to $3,000 in the 2022 edition. The limit applies per loss, regardless of how many trees have fallen. A limit of $1,500, increased from the earlier $500, applies for the removal of any one tree.

Reasonable Repairs provides coverage for the costs incurred by the insured to make temporary repairs to prevent further damage to covered property; for example materials to cover a broken window. If the measures taken to repair damaged property involve repair to other damaged property, coverage is provided only if that property is covered by this policy and damage is caused by a covered peril. What this is doing is providing coverage for property that is the responsibility of the condo owner and not the association. If in putting something over the window the insured patches part of the wall that is the responsibility of the HOA to repair, that will not be covered. This coverage does not increase the limit of coverage that applies, and it does not relieve the insured of their obligation to protect the property from further damage and make repairs to protect the property and keep records of related expenses.

Coverage exists for trees, shrubs and other plants that the insured solely owns at the "residence premises" location for loss for specified named perils. Those perils are fire or lightning, explosion, riot or civil commotion, aircraft, vehicles not owned or operated by a resident of the "residence premises", vandalism or malicious mischief or theft.

Up to ten percent of the Coverage C limit of liability is available for coverage for all trees, shrubs, plants, or lawns. No more than $1,500, increased from $500, is available for any one tree, shrub, or plant. A new exclusion has been added for "cannabis", whether or not grown for "business" purposes. The exclusion for "business" has been reworded for property other than "cannabis" grown for "business" purposes because there is now the specific exclusion for "cannabis" on its own.

The additional coverages for Fire Department Service Charge and Property Removed have not been changed. Up to $500 is available for an insured's liability assumed by contract or agreement for fire department charges incurred when the department is called to save or protect covered property from a covered peril. If the property is within a municipality, city, or protection district furnishing such responses, there is no coverage.

Property that has been removed from the premises to protect it from covered perils is covered for no more than 30 days while removed. This coverage does not increase the limit that applies to the property that has been moved, it simply extends the coverage to the alternate location.

The former Credit Card, Electronic Fund Transfer Card or Access Device, Forgery and Counterfeit Money coverage has been removed from the policy. The coverage that was provided here is now being provided by most credit cards, so it is no longer needed in the condo form.

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 building, storm door or storm window and covered under Coverage A; (2) The breakage of glass or safety glazing material which is part of a building, storm door or storm window and covered under Coverage A 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) To the "residence premises" if the building containing the "residence premises" 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 building 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. 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 property covered under Coverage A damaged by a Peril Insured Against; (2) The demolition and reconstruction of the undamaged part of property covered under Coverage A, when that property must be totally demolished because of damage by a Peril Insured Against to another part of that property covered under Coverage A; or (3) The remodeling, removal or replacement of the portion of the undamaged part of property covered under Coverage A necessary to complete the remodeling, repair or replacement of that part of the property covered under Coverage A 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 property covered under Coverage A 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 property covered under Coverage A. 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.

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

Analysis

The limits for Loss Assessment have been increased to $2,000 from the previous $1,000. Coverage is made for assessments made against the insured from the homeowners association or corporation for damage to the property owned by all members collectively, if the damage would be covered under this policy as a covered peril, other than earthquake or land shock waves before, during or after a volcanic eruption. For example, a tornado hits a condominium complex and the community pool and clubhouse are damaged. The unit owners are each assessed their share of the damages. The assessment amount is the most paid per loss, regardless of the amount of assessments made. Assessments that are due to assessments made by a governmental body against the association are not covered here.

The form then states that the Policy Period provisions listed for Section I do not apply here. That section states that the policy applies only to loss which occurs during the policy period. It is entirely possible for an insured to be assessed for damages months after the date of loss, and after the policy has expired or renewed. This is considered additional coverage.

The collapse coverage remains the same with no changes. It specifies that coverage applies only to an abrupt collapse of the property, not a gradual coming apart. Collapse means that the building or any part of the building abruptly fell down or caved in, with the result being that the building or part of the building cannot be used for its intended purpose.

The collapse coverage does not apply to buildings or any parts of buildings that are in danger of falling down or caving in, parts of buildings that are still standing even if separated from another section, or buildings that are showing signs of cracking, bulging, bending, sagging, leaning, settling, shrinking or expanding. The policy is reinforcing the parameters under which coverage applies, and that is for a complete and sudden collapse of the building, and not incremental degradation.

Covered causes of loss for collapse are the named perils under Coverage C, decay that is hidden from view unless the "insured" knew of such decay before the collapse, hidden insect or vermin damage again that the "insured" does not know about before the collapse, weight of contents, animals, people, or equipment, weight of rain collecting on the roof or use of defective construction materials or methods as long as the collapse occurs during the course of construction, remodeling or renovation.

Excluded is loss to awnings, fences, patios, decks, pavements, swimming pools, underground pipes, flues, drains, cesspools, septic tanks, retaining walls, bulkheads, piers, wharves or docks unless the damage to these properties is a direct result of the collapse of the building or part of the building. If a wall of the condo complex suddenly collapses and the insured's deck and patio collapse as well, then coverage applies. This coverage does not increase the limit of liability listed in the policy.

Glass or safety glazing material is another additional coverage and covers the breakage of glass or safety glazing material which is part of the building, storm door or storm windows as long as it is covered under Coverage A. Coverage applies when the glass is broken directly by earth movement and the direct physical loss is to covered property, and is caused solely by the pieces, fragments or splinters of broken glass that was part of the building. For example, earth movement causes the storm door and storm windows to break and glass falls into the dwelling. Shards of glass damage the sofa, carpeting, and coffee table. That damage from the broken glass would be covered.

Coverage does not apply other than what has been described. Also, coverage does not apply to the "residence premises" if the premises has been vacant more than 60 consecutive days immediately before the loss unless the breakage is due to earth movement. The policy makes note that a building being constructed, remodeled, renovated or repaired is not considered vacant. This wording has been modified to add the terms remodeled, renovated or repaired for clarification.

Vacancy can be tricky because it is more than a property that is just unoccupied, it is a property that is devoid of most furnishings. If a dwelling is full of furniture but the insured is out of town for a month, that property is not vacant, it is simply unoccupied. For a further discussion see: Policy Definitions of Vacancy and Occupancy

Ordinance or law coverage provides for increased costs an insured incurs due to the enforcement of local building codes. Up to ten percent of the limit of coverage A is available for the enforcement of ordinances or laws that regulate construction, demolition, remodeling or repair of property that has been damaged by a peril insured against, including the demolition and reconstruction of undamaged property that must be demolished because of damage caused by a covered peril to another part of covered property. Also covered is the remodeling, replacement or removal of the part of undamaged property needed to complete the remodeling, repair or replacement of the part of property that was damaged by a covered peril. For example, a condo owner experiences a fire in the kitchen that engulfs more than half of the property. Local ordinances require that the wiring be upgraded throughout the condo. Even though the condo didn't completely burn, because the upgrade is required due to the ordinance, there is coverage to redo the wiring throughout the property, even to the undamaged sections.

The ordinance or law coverage can also be used to pay increased costs to remove debris resulting from the required remodeling, renovation, construction, repair or demolition of covered property. However, not everything is covered. Loss in value due to the ordinance or law requirements to property covered under Coverage A is not covered, nor are costs that require testing, monitoring, cleaning up, removing, detoxifying, neutralizing or in any way responding to pollutants in or on any covered property. The standard definition of pollutants as any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals or waste applies. Waste includes materials to be recycled, reconditioned or reclaimed, and this coverage is additional insurance.

Grave markers are the last additional insurance, and up to $5,000 is available for damage to grave markers or mausoleums away from the "residence premises" for loss caused by a peril insured against. Most grave markers/mausoleums are not on an insured's property. This is also additional insurance.

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