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

SECTION II – CONDITIONS

A. Limit Of Liability

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

B. Severability Of Insurance

This insurance applies separately to each "insured". This condition will not increase our limit of liability for any one "occurrence".

C. Duties After Occurrence

In case of an "occurrence", you or another "insured" will perform the following duties that apply. We have no duty to provide coverage under this Policy if your failure to comply with the following duties is prejudicial to us. You will help us by seeing that these duties are performed:

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

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

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

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

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

Analysis

Only minor editorial changes have been made in the 2022 form. The first Section II condition outlines the limit of liability. No more than the Coverage E limit of liability will be paid, regardless of the number of "insureds" involved in a claim or the number of claims for one incident or number of persons injured. All "bodily injury" or "property damage" resulting from one accident or exposure to continuous or repeated exposure to the same generally harmful conditions will be treated as one "occurrence". Likewise, the total liability under Coverage F for injury to one person as the result of one accident will not be any more than the limit shown on the declarations. Limits always apply, and it's important for the policy to be clear on when and how they are applied.

The severability clause makes it clear that coverage applies separately to each "insured", but that it does not increase the limits that apply per "occurrence". More than one insured could be involved in an accident that causes injury or damage to others. However, while each insured will be separately represented, the limits still apply.

As in Section I, Section II contains certain duties of the insured in the event of a loss. It is clearly stated that if the insured does not comply with the stated duties and such failure is prejudicial to the insurer, that there is no duty to provide coverage.

The first duty is to give written notice to the insurer or the agent. This notice needs to identify the policy and "named insured", time, place, and circumstances of the accident and names and addresses of any claimants or witnesses. Multiple parties may be involved and the insurer needs all information in order to properly investigate the claim and make a determination of coverage.

The insured also needs to cooperate with the insurer in the investigation, settlement, and defense of any claim or suit, and promptly forward any notice, demands or summons related to the accident to the insurer. A delay in the receipt of legal documents can impact an insurer's preparation and handling of a suit.

At the request of the insurer, the insured is to help it make settlement, enforce rights of contribution or indemnity against a liable party, assist with the conduct of suits and attend hearings and trials, and secure evidence and obtain the attendance of witnesses. While an insured may not be able to compel a witness to come forward, an insured can at least provide information as to who witnesses are and where they may be contacted. The insured is expected to assist in any way possible with the resolution of a claim or suit against them.

Regarding Damage to Property of Others, the insured is required to submit a signed sworn statement of loss and show the damaged property within 60 days after the date of the loss. The insured is also required to show the damaged property if it is still in the insured's control. Insured's are not to make any payments or assume any obligations or incur expenses other than for first aid at the time of injury. Any other payments are at the insured's own cost, as making payments could be considered an admission of guilt that may or may not be appropriate regarding the claim.

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

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

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

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

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

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

G. Bankruptcy Of An Insured Bankruptcy or insolvency of an "insured" will not relieve us of our obligations under this Policy.

H. Other Insurance This insurance is excess over other valid and collectible insurance except insurance written specifically to cover as excess over the limits of liability that apply in this Policy.

I. Policy Period This Policy applies only to "bodily injury" or "property damage" which occurs during the policy period.

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

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

Analysis

Certain duties apply specifically to an injured person who is looking to make a claim for medical payments. The injured party, or someone acting on her behalf, is required to give written proof of the claim, under oath if necessary, as soon as practical and also authorize the insurer to obtain copies of medical records and reports. As always, promptness of notification is important as it allows the insurer to investigate the claim before memories of the incident become hazy. The injured party is also required to submit to a physical exam by a physician of the insurer's choosing as often as is reasonably required by the insurer.

The policy then states that payment of a medical payments claim is not an admission of liability by the insured or the insurer. It is simply payment for injuries that occurred on the premises. A guest of the insured could fall down the steps and break a leg; payment for treatment does not imply the insured was at fault, people sometimes just have accidents.

Before a suit can be brought against the insurer, all terms under Section II must be adhered to. Those terms are the duties after a loss and duties of an injured person. The policy does not grant another party the right to join the insurer as a party to an action against an "insured". Any such action is only between the insurer and the insured. Lastly, no action regarding Coverage E can be brought against the insurer until the obligations of the "insured" have been determined by a final judgment or a signed agreement by the insurer. Once a judgment has been reached or an agreement has been signed indicating that the insured is legally liable, then a suit could be brought against the insurer.

An insured's financial status does not change the responsibility of the insurer under the insurance policy. As long as the policy is in force, even if the insured declares bankruptcy, coverage still applies.

It is possible that an insured may have more than one policy. If so, this policy is excess over any other valid and collectible insurance unless that other policy is specifically written as excess over the limits of this policy.

The policy period applies only to "bodily injury" and "property damage" that occurs during the policy period. A policy will not pay for any injuries or damages that occur outside of the policy period.

Fraud is an enormously expensive issue within the industry. Therefore, if an insured has intentionally concealed or misrepresented any material facts or circumstances, has engaged in fraudulent conduct, or made false statements related to this insurance there will be no coverage. Also, most state insurance departments require insurers to report fraud to the department for potential prosecution.

SECTIONS I AND II – CONDITIONS

A. Liberalization Clause

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

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

B. Waiver Or Change Of Policy Provisions

A waiver or change of a provision of this Policy must be in writing by us to be valid. Our request for an appraisal or examination will not waive any of our rights.

C. Cancellation

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

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

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

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

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

D. Nonrenewal

We may elect not to renew this Policy. We may do so by delivering to you, or mailing to you at your mailing address shown in the Declarations, written notice at least 30 days before the expiration date of this Policy. Proof of mailing will be sufficient proof of notice.

E. Assignment

Assignment of this Policy will not be valid unless we give our written consent.

F. Subrogation

An "insured" may waive in writing before a loss all rights of recovery against any person or organization. If not waived, we may require an assignment of rights of recovery for a loss to the extent that payment is made by us. If an assignment is sought, an "insured" must sign and deliver all related papers and cooperate with us.

Subrogation does not apply to Coverage F or Paragraph C. Damage To Property Of Others under Section II – Additional Coverages.

G. Death

If any person named in the Declarations or the spouse, if a resident of the same household, dies, the following apply:

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

2. "Insured" includes:

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

Analysis

These last seven conditions apply to the policy as a whole. While some conditions apply to each section separately because of the nature of the coverages provided, some conditions apply as a whole.

The first condition is the liberalization clause. This states that if a change is made to the policy language that broadens coverage without additional premium, that the change will automatically apply to the policy as of the date of implementation, as long as the date is within 60 days before or during the policy period. If there are changes that both broaden and restrict coverage, then the liberalization clause does not apply. Such changes will be made by a subsequent edition of the policy or an amendatory endorsement.

Any waiver or change of policy provisions must be in writing by the insurer. An insured cannot simply change policy terms. Endorsements allow insureds to make a variety of changes to any policy. This clause also states that an insurer's request for an appraisal or examination does not waive any rights of the insurer. An insurer can ask for an appraisal and still deny the claim if it is determined that there is no coverage for the loss.

Both the insured and the insurer have the ability to cancel the policy. The insured simply has to return the policy to the insurer or notify the insurer in writing of the date the cancellation takes effect. Cancellation by the insurer is more involved, since the insured must be given enough time to find coverage elsewhere in the event the insured has a lien or mortgage on the property. When an insurer does cancel a policy, the insured must be notified in writing, and may be delivered to the insured or mailed to the address shown in the declarations. Proof of mailing the notice will be sufficient proof that the insurer notified the insured.

An insurer can only cancel the policy for certain listed reasons. The first is nonpayment. When the insured fails to pay the premium, the insurer has the right to cancel the policy with at least ten days notice before the effective date of the cancellation. If the policy has been in effect for less than 60 days and is not a renewal, again cancellation can take place with only ten days notice. This is generally the underwriting period, in which the insurer has the opportunity to review the application and determine if it wants to provide coverage.

When the policy has been in effect for more than 60 days or if it is a renewal policy, cancellation is limited to if there is material misrepresentation of fact that would have caused the insurer to not issue a policy, or if there has been a substantial change in the risk since the policy was issued. A substantial change in risk would be an unfenced pool with a tall diving board, for example, something that significantly changes the chance of loss to the property or increases the chance of a liability claim against the insured. If the risk fits these parameters, then the policy can be cancelled with 30 days notice before the actual date of cancellation. If the policy is written for more than one year, the insurer may cancel the policy for any reason at the anniversary date with 30 days advance notice.

Upon cancellation, the premium from the date of cancellation to the expiration date is refunded to the insured on a pro rata basis. If the return premium is not sent with the cancellation notice or when the policy is returned by the insured, it will be refunded within a reasonable time after the date the cancellation takes effect. What that reasonable time frame is considered to be is not explained. States also have regulations concerning cancelation and nonrenewal of policies. If the state regulations are more generous to the insured, then those are cancellation parameters that an insurer must follow.

Nonrenewal is similar to cancellation, and the provision states that notice will be sent at least 30 days before the expiration date of the policy. Again, proof of mailing is considered to be sufficient proof of notice. It is the insured's responsibility to notify the insurer if he moves to a new location. Failure to do so does not cause the insurer to stay on the risk once it has decided that cancellation is in order.

The policy cannot be assigned to another party without the written consent of the insurer. An assignment of the policy transfers all coverage rights to that other party. The insurer needs to be able to review and underwrite the insured owner of the property; a new owner may have several fire losses that would make them ineligible for coverage. An insured cannot simply assign the policy to a party the insured knows nothing about without the insurer's consent.

Subrogation is when the insurer steps into the shoes of the insured in order to make a claim against another party. The insured may waive in writing his rights to subrogation before a loss occurs. If subrogation is not waived, the insurer may require the insured to assign all recovery rights to the insurer if the insurer made payment to the insured. If the insurer requires an assignment of these rights, the insured must sign and deliver all related papers to the insurer and cooperate with the insurer in its case. Subrogation does not apply to Coverage F., Medical Payments or Paragraph C. Damage to Property of Others.

The last condition addresses what happens upon the death of the insured or resident spouse. The legal representative is insured with respect to the premises and property of the deceased covered under the policy at the time of death. If an insured dies, then the legal representative of the insured will be covered for any losses. The policy further states that regarding the death provision, "insured" includes those who are members of your household at the time of your death, but only as long as they are a resident of the "residence premises" and with respect to property, the person having property temporary custody of the property is considered an insured until a qualified legal representative is appointed. For example, the insured is married and dies. The surviving spouse remains in the premises; the spouse is covered for any damage to the property until a legal representative is appointed for the estate. The surviving spouse may be appointed legal representative, or another party could be appointed. Once a legal representative has been appointed, then that party receives coverage under the policy for any damage or claims against the insured property.

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