Home Owners Flashcards
4.1a Homeowner’s Insurance:
The homeowner’s package policy combines protection against loss to residences and household personal property with personal liability coverage.
Eligibility Requirements:
The homeowner’s program is designed for personal, non-business risk. Owner-occupants of 1 - 4 family dwellings, renters who maintained residential occupancy in any kind of building, and condominium unit owners and occupants of cooperative apartments are eligible for coverage in the homeowner’s program.
4.1b Homeowner’s Insurance:
An insured may not have more than two roomers or boarders per family occupancy and incidental business use such as an office or studio is permitted. A farm premise is not eligible for the homeowner’s program although incidental farming is permitted. A policy may be issued to cover a dwelling under construction if the dwelling will be eligible for the program when completed. A mobile or trailer home is not eligible for coverage unless the mobile or trailer home is rented and then only the tenant is eligible for coverage.
4.1d Homeowner’s Insurance:
Tailoring the Policy: A homeowner’s policy consists of a declarations page, one of six homeowner’s forms, and mandatory and optional endorsements.
Forms Available: The six different homeowner’s forms which are most frequently referred to simply by number are: HO-2 Broad Form; HO-3 Special Form; HO4 Contents Broad Form (apartment dwellers coverage); HO-5 Comprehensive Form; HO-6 The Unit Owners Form (condominium or cooperative apartment owners coverage); HO-8 Modified Coverage Form.
Forms HO-2, HO-3, HO-5, and HO-8 apply only for owner-occupied one-four family dwellings. HO-4 applies for renters or those who occupy a residence in an ineligible building (such as an apartment in a commercial building which the insured owns). HO-6 is for condominium unit owners and cooperative apartment dwellers and can be written even if the unit is held for rental.
4.1e Homeowner’s Insurance:
When two occupants jointly own a 2-family dwelling, an HO-2, HO-3, HO-5, or HO-8 may be issued in the name of one of the co-owners and an HO-4 may be issued to the other co-owner.
Each form has two main divisions: Section I Property and Section II Liability. Section II in all of the forms is identical. The main differences are found in the perils covered in Section I.
4.2a Section I Property Coverage:
The Section I deductible, which applies to each occurrence, is $500 for all perils other than hurricanes. For a hurricane, a minimum $500 deductible applies with the maximum deductible varying from 2 percent of the building coverage amount to an unlimited amount. The policy limit applies to all losses in addition to the deductible.
Section I in each of the homeowner forms are divided into subsections: Coverages; Perils Insured Against; Exclusions; and Conditions.
Coverage A: Coverage A covers the dwelling building and structures attached including construction materials and supplies on or adjacent to the premises.
4.2b Section I Property Coverage:
Under form HO-6, Coverage A covers building additions and alterations, other real property at the condominium premises, and property for which the insured has insurance responsibility under an association agreement. Condominium association agreements vary as to what the association insures and what the unit owner is responsible for. The unit owner will normally need an increased amount of coverage for Coverage A to cover the additional condominium-building amount for which they are responsible.
Coverage A does not appear in form HO-4, as the building structure is never covered under that form. A limited amount of building additions and alterations coverage is provided under “Additional Coverages.”
Coverage B: “Other Structures” covers private structures on the residence that are not attached to the main dwelling. Other structures can be a detached garage, guesthouse, fence, tennis court, or storage building. Other structures do not include structures that are used for business purposes or structures held for rental to anyone who is not a tenant of the main house unless the rental is solely for private garage purposes. There is no Coverage B in forms HO-4 or HO-6.
Coverage C: “Personal Property” covers personal property wherever located that is owned or used by “an insured.” The insured may choose to cover the personal property of others while such property is located at the residence premises occupied by the insured and listed in the policy declarations. Property of the guest or an employee of the insured is covered while at any residence occupied by an insured.
4.2c Section I Property Coverage:
Coverage C Exclusions:
Coverage C excludes several types of property:
(1) Specifically insured articles (personal property specifically named on a personal property floater, or another form which will be discussed later);
(2) Animals, birds or fish;
(3) Motorized vehicles except those used to service a residence or motorized vehicle designated for handicapped;
(4) Tape decks, CB radios, tapes, and similar equipment designed to be operated solely by the power from the electrical system of a motorized vehicle but only while the equipment is in the vehicle;
(5) Aircraft and parts (except model or hobby aircraft);
(6) Hovercraft and their parts;
(7) Property of roomers, boarders, or other tenants unless such persons are related to the insured;
(8) Property in an apartment that is regularly rented or available for rental to others;
(9) Property away from the residence premises that is rented or held for rental to others; and
(10) Business data, whether contained in books and paper records or electronics software media (except the cost of blank records or media and of prerecorded retail computer programs are covered).
(11) Damage from water or steam
4.2c Section I Property Coverage:
Limits:
4.2c Section I Property Coverage:
Limits:
Under the homeowner’s program, the insured selects a limit for Coverage A, Coverage B is automatically 10 percent of the amount insured for Coverage A and may not be increased or decreased. Coverage C is normally 50 percent of the Coverage A limit but here are special coverage limits for certain categories of personal property. Form HO-6 requires a minimum limit for Coverage A of $5,000. Coverage D is 1) 30 percent of Coverage A under HO-2, HO-3, or HO-5; 2) 30 percent of Coverage C under HO-4; 3) 50 percent of Coverage C under HO-6, and 4) 10 percent of Coverage A under HO-8. These limits (except HO-8) may be increased to higher amounts.
The additional limits for personal property are:
1. 10 percent of Coverage C (but not less than $1,000) applies to property of the insured located at a residence other than the main dwelling.
2. $200 per occurrence applies to loss of money or related property, precious metals, and medals.
3. $1,500 per occurrence applies to securities and similar property.
4. $1,500 per occurrence applies to watercraft, including their trailers, accessories, and equipment.
5. $1,500 per occurrence applies to trailers not used with watercraft.
6. $1,500 per occurrence applies to loss by theft of jewelry, watches, furs, precious and semi-precious stones.
7. $2,500 per occurrence applies to loss by theft of firearms.
8. $2,500 per occurrence applies to loss by theft of silverware, goldware, and pewterware.
9. $2,500 per occurrence applies to business property on the residence premises and $1,500 applies when that property is away from the residence. This restriction applies only to personal property used primarily for business purposes.
10. $1,500 per occurrence applies to portable electronic equipment (cellular phones, stereos, computers, etc.), IF (1) it reproduces, receives, or transmits audio, visual, or data signals; (2) is designed to be operated by one or more power sources (including a motor vehicle’s electrical system); (3) in or upon a motor vehicle
11. $250 per occurrence on 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.
4.2d Section I Property Coverage:
Additional Coverages:
The Section I additional coverages are:
1. Cost of debris removal and reasonable repairs after a loss are covered up to 5 percent of the Coverage A limit;
2. Trees, shrubs, and plants are covered up to 5 percent of the Coverage A limit, but not more than $500 for any, one tree, shrub, or plant; trees, shrubs, and plants are only covered for certain limited perils;
3. Up to $500 reimbursement is provided for fire department service charges;
4. Thirty days coverage is allowed for property removed from endangered premises for loss from any cause;
5. Loss from unauthorized use of credit cards or fund transfer cards, forgery, and acceptance of counterfeit money is covered up to $500;
6. Coverage of $1,000 applies for loss assessments imposed by an association against the insured for damage to property caused by a peril insured against under Coverage A. In response to FL Statute 718.111(11)(G), effective January 1, 2009, coverage of $2000 applies for loss assessments to HO-6 policies.
7. In the HO-2, HO-3, and HO-5 forms only, a named insured who regularly rents or holds for renting an apartment on the residence premises is covered for up to $2,500 (limited perils only) for “landlord furnishings” (appliances, carpeting or other household furnishings) in the apartment;
8. Breakage of building glass, including replacement with safety glazing materials if required by ordinance or law, is covered unless the building has been vacant for over 60 consecutive days;
9. Up to 10 percent of the Coverage A limit is available, as an additional amount of insurance, to cover losses arising from the operation of building ordinances or laws if triggered by a covered loss;
10. In the HO-4 form only, up to 10 percent of Coverage C is available, as an additional amount of insurance, for building additions and alterations made or acquired at the tenant’s expense.
4.2d Section I Property Coverage:
Perils Insured Against:
Form HO 2 provides Section I coverage on a stated named perils basis, many of which are subject to certain limitations; the perils named are: fire; lightning; windstorm; hail; explosion; riot or civil commotion; aircraft; vehicles; smoke; vandalism or malicious mischief; falling objects; the weight of ice, snow or sleet; accidental discharge or overflow of water or steam from within a plumbing, heating, air-conditioning or sprinkler system or water heating appliance; freezing of a plumbing, heating, air-conditioning, sprinkler system or household appliances; sudden and accidental damage from artificially generated electrical current; volcanic eruption; and catastrophic ground cover collapse (as mandated in Florida).
One example of a limitation applying to Section 1 is a limitation for theft; theft must be the loss of property from a known place when it is likely that the property has been stolen (mysterious disappearance is not covered); theft committed by an insured, or at a construction site, or from a residence rented to others is not covered. Coverage at a secondary residence applies only while an insured is temporarily residing there. Watercraft and related equipment, trailers, and campers are not covered away from the residence premises. Property at a student residence is not covered if the residence is unoccupied for 90 days immediately preceding a loss.
4.2d Section I Property Coverage:
Perils Insured Against cont.:
4.2d Section I Property Coverage:
Perils Insured Against cont.:
Form HO-3 provides “all-risk” coverage for Coverages A and B and named perils coverage for Coverage C; the named perils are the same as those listed above for HO-2.
The HO-3 form has a long list of exclusions in addition to the general exclusions listed under Coverage A and Coverage B: 1) theft from a dwelling under construction is excluded; and 2) wear and tear, rust, mold, rot, smog, industrial smoke, and settling are excluded. HO-3 provides broader coverage than HO-2. Some examples of the broader coverage are:
1. Scorching when there is no fire;
2. Interior damage from rain when the structure has not first been damaged;
3. Damage to a fence caused by a vehicle operated by a resident;
4. Weight of objects;
5. Non-malicious acts of children;
6. Spillage;
7. Discharge of firearms;
8. Damage by animals not owned or kept by an insured; and
9. Accidental breakage.
Form HO-5 provides “open perils” for Coverages A, B, and C. “Open perils” are essentially the same as “all-risk” coverage provided in the HO-3 form. The difference between HO-5 and HO-3 is that the HO-5 form provides “all-risk” coverage for Coverage C where the HO-3 form provides “named perils” coverage for Coverage C.
Forms HO-4 and HO-6 provide named perils coverage for Coverage C; the named perils are the same as those listed above for HO-2.
Form HO-8 also provides named perils for Coverage C; fewer named perils are covered than those listed above for HO-2. The HO-8 form includes only the first 10 listed perils of HO-2 plus volcanic eruption and catastrophic collapse. Theft coverage covers loss only at the residence premises, with a limit of $1,000. Breakage of building glass is subject to a limit of $100.
4.2e Section I Property Coverage:
General Exclusions:
In addition to the coverage limitations specified for each peril, generally, exclusions include:
1. Loss resulting from earth movement other than sinkhole;
2. Water damage from a flood, backing up of sewers or drains, or underground seepage;
3. Power failure that occurs away from the residence;
4. Neglect to use reasonable means to save and protect property at and after a loss;
5. War;
6. Nuclear hazards; and
7. Intentional loss created by or at the direction of an insured.
4.2e Section I Property Coverage:
Conditions:
There are numerous Section 1 conditions dealing with the insurer and insured duties and rights before and after a loss. The most important condition is the “Loss Settlement” condition. Actual cash value adjustments apply to Section 1 losses. Coverages A and B may be adjusted on a replacement cost basis if the limit of insurance at the time of loss is equal to 80 percent or more of the replacement value of the building. If the 80 percent requirement is not met, the insurer will pay the proportion of the replacement cost, which the limit bears to 80 percent of the replacement value (coinsurance clause), but not less than the actual cash value. Some limitations on Replacement Cost are: (1) ACV valuation applies to awnings, carpeting, appliances, outdoor antennas, and outdoor equipment; (2) in order to receive replacement cost, the insured must notify the insurer of intent to replace within 180 days; (3) the insured may take an ACV adjustment and later claim the difference between the ACV and replacement cost, if within 180 days after the loss.
4.3a Section II Liability Insurance:
Coverage:
Section II contains two coverages: E: Liability and F: Medical Payments to others. Coverage E protects the insured from legal liability for bodily injury or property damage to others. Coverage F pays for medical and other related expenses for members of the public injured through the insured’s personal activities without regard to the insured’s legal liability.
Personal, non-business activities which arise from the insured locations (the residence premises described in the declarations, newly acquired residences, locations where an insured is temporarily residing or has rented a location for non-business use, vacant land owned by for rented to an insured (not including farmland), land owned by the insured upon which a one-four family dwelling is being constructed for the insured, and cemetery plots or burial vaults) are covered anywhere.
4.3a Section II Liability Insurance:
Exclusions:
4.3a Section II Liability Insurance:
Exclusions:
Section II exclusions excluded coverage for:
(1) Business pursuits: (activities which are usual to non-business pursuits like the occasional rental of a dwelling to others as a residence, the partial rental of the residence, the use in part of the residence as an office, school, studio, or private garage, activities where the insured received less than $2,000 in compensation, providing childcare services either for no compensation or for a relative of the insured, or liability coverage for an insured under the age of 21 engaged in a part-time, self-employed business with no employees (i.e., babysitting or cutting grass) are not excluded);
(2) Motorized land vehicles: (except motor vehicles in dead storage at the insured’s residence, golf carts while being used to play golf on a golf course or used in a private residential community where the insured lives and where golf carts are permitted on the roadway of the community, off-road recreational vehicles while on an insured location or elsewhere if not owned by the insured, or vehicles designed to aid the handicapped (these vehicles are covered anywhere in the world so long as they are being used to aid the handicapped);
(3) Watercraft including watercraft while stored: The exclusion only applies to inboard or inboard/outboard boats owned by an insured of more than 50 horsepower and rented to an insured; sailboats owned by or rented to an insured which are 26 feet or longer; both powered by outboard motors up over 25 horsepower owned by the insured at policy inception (but not if acquired during the policy term).
4.3b Section II Liability Insurance: Section II has four “Additional Coverages”:
4.3b Section II Liability Insurance:
Section II has four “Additional Coverages”:
(1) Claim Expenses: The insurer pays the cost of defense, premiums on appeal bonds, interest on judgments, prejudgment interest, and reimbursement to the insured of expenses to aid in defense including up to $250 per day for loss of earnings.
(2) First Aid Expenses: First Aid Expenses reimburses the insured for such expenses incurred for providing first aid at the time of an accident.
(3) Damage to Property of Others: Up to $1,000 coverage is provided for the damaged property of others that is caused by an insured without regard to legal liability.
(4) Loss Assessment: Up to $1,000 applies to assessment against the insured by an association of property owners, as a result of loss to the association from 1) an occurrence at the residence premises to which Section II of the policy would apply; or 2) the acts of properly elected but unpaid directors, officers or trustees of the condominium.
4.3b Section II Liability Insurance:
Limits Of Liability:
The Section II basic limits of liability are $100,000 per occurrence for Coverage E and $1,000 per person for Coverage F. There is a $10,000 cap on statutorily imposed vicarious parental liability. These limits may be increased. The limits applicable to Additional Coverages apply as additional amounts over these limits.
4.4 General Conditions:
4.4 General Conditions:
The homeowner’s policy conditions provide for various details such as changes, assignments, subrogation, and death of the insured. These conditions are basically the same as other policies.
Under the Cancellation Condition, Florida law requires an insurer to give 120 days advanced written notice of cancellation, including the reason for the cancellation, except for cancellation for nonpayment of premium or cancellation during the first 90 days during which the insurance is in force. For cancellation for nonpayment of premium, 10 days’ written notice of cancellation, accompanied by the reason, must be given. For cancellation other than nonpayment of a premium during the first 90 days, the policy is in force, at least 20 days advance notice including the reason for the cancellation must be given except where there has been material misrepresentation or misstatement or a failure to comply with the underwriting requirements of the insurer. The insurer must give 120 days written notice of non-renewal, stating the reasons for non-renewal, or if the insurer elects to renew the policy, 45 days written notice of the renewal premium
4.5 Endorsements:
4.5 Endorsements:
There are several endorsements dealing with policy limits available to “customize” the policy:
1. “Inflation Guard” permits specifying a percentage by which the limit for each Section I coverage will be increased annually, prorated throughout the policy term.
2. While Coverage B is limited to 10 percent of Coverage A, additional specified insurance may be issued on detached private structures to supplement Coverage B.
3. Most of the special limits applicable to certain types of personal properties may be increased: 1) money, etc. from $200 to $1,000; 2) securities from $1,500 to $2,000; 3) jewelry and furs from $1,500 to $5,000 (subject to $1,000 on any one item); 4) silverware, etc. from $2,500 to $10,000; 5) firearms from $2,500 to $6,500; 6) business property from $2,500 to $10,000; and 7) electronic apparatus from $1,500 to $6,000.
4. The limit of $500 on losses from credit cards, forgery, or counterfeit money may be increased as much as $10,000.
5. The limit of 10 percent of Coverage C, which applies to property usually located at secondary residents, may be increased to any higher amount.
6. The basic $1,000 limit for loss assessments may be increased to any higher amount, and may also be extended to cover assessments arising from other locations.
7. The limit of 25% of Coverage A (can be increased to 50%) applying to losses arising from building ordinances or laws may be increased.
4.5 Endorsements:
4.5 Endorsements:
In addition, the following options are available for Section I to broaden coverage:
(1) Loss settlements for personal property may be changed from actual cash value to replacement costs excepting certain properties such as antiques, fine arts, and obsolete stored articles.
(2) A “special coverage” endorsement can be added to the HO-3 and HO-6 forms to extend the “all-risk” coverage provided for buildings to include personal property.
(3) Certain classes of property may be scheduled with specific amounts of insurance on an “all-risk” basis and not subject to the basic policy deductibles. These classes are jewelry, furs, cameras, musical instruments, silverware, golfer’s equipment, fine arts, and stamp and coin collections.
(4) Theft coverage can be extended to cover when the residence is occasionally rented to others.
(5) Structures not covered under Coverage B (for example, a rented guest house for personal property located away from the resident’s premises) may be specifically included.
(6) A student away at school may be covered by endorsement even if the student does not fit the definition of “an insured.”
(7) A relative of an insured in an assisted living care facility may be covered by endorsement even if the relative was not a member of the household previously.
(8) The HO-4 may be endorsed to provide “open peril” or “all-risk” coverage on personal property.
(9) If the title to the residence is in the name of a trust, the name of the trust may be covered by endorsement.
(10) The insured may purchase “open peril” as well as the optional coverage of collision on an actual cash value basis and subject to a deductible of $500 for certain owned golf carts. This is physical damage coverage on the golf cart itself.
(11) HO-8 may be broadened to include off-premises theft losses subject to a limit of $1,000.
4.5 Endorsements:
The following endorsements are available to broaden Section II:
(1) Coverage may be included for watercraft, which is normally excluded.
(2) A “Business Pursuits” endorsement is available to cover occupational liabilities for those who are employed by others.
(3) Coverage may be included for structures at the residence premises or for 1- 4 family dwellings at other locations, which are rented to others.
(4) Although farms are not eligible under the homeowner’s program incidental farming operations at the residence premises including liability for farm premises at other locations may be added.
(5) “Personal Injury Liability” may be added covering claims against the insured for false arrest, detention or imprisonment, malicious prosecution, libel, slander, invasion of privacy, wrongful eviction, and wrongful entry.
4.6 Rating:
The premium for a basic homeowner’s policy is based on three elements of rating: (1) the fire protection available; (2) the construction of the dwelling; and (3) the location in this state.
From these rating elements, a “key premium” is established and multiplied by a “key factor” based on the Coverage A limit or Coverage C limit for forms HO-4 or HO-6 to produce the homeowners base premium. Each option for broadening coverage is subject to an additional premium for which a rate is based on the coverage being added.
4.7a: Dwelling Program
The Dwelling Program provides personal insurance coverage for dwellings not having more than four apartments or four-family units, mobile homes, and household personal property in an apartment, or cooperative or condominium used as living quarters or rented to others.
Coverage Forms: The Dwelling program has three coverage forms: DP-1 Dwelling Property Basic Form, DP-2 Dwelling Property Broad Form, and DP-3 Dwelling Property Special Form.
Declarations: A dwelling policy consist of a declarations page, a coverage form, and possibly mandatory or optional endorsements. The declarations page identifies the insured, the insured location, the policy period, coverages, limits, premiums, the applicable deductible, and various other related information.
4.7b: Dwelling Program - Coverages
The coverages provided in the Dwelling Form are:
A - Dwelling
B - Other Structures
C - Personal Property
D - Fair Rental Value
E - Additional Living Expenses
The standard deductible in the dwelling program is $500 for all perils other than hurricanes. For hurricanes, a minimum deductible of $500 applies with maximum deductibles of 2 percent, 5 percent, or 10 percent of the policy limits. The deductible applies per location and for each separate dwelling premise.
The insured selects their limit of coverage. However, the minimum limit for coverage A is $12,000 for DP-2 and $15,000 for DP-3; there is no limit for coverage A for DP-1. If coverage A is not included, the minimum limit for coverage C under either DP-2 or DP-3 is $4,000.
Coverage A - Dwelling: When Coverage A is included it covers the dwelling building and includes additions attached to the dwelling, building equipment, and outdoor equipment used for the service or located on the premises. Building materials on or adjacent to the dwelling for the use of alteration or repair of the dwelling are also covered.
4.7c: Dwelling Program - Coverage B
4.7c: Dwelling Program - Coverage B
Coverage B:
Other Structures: When Coverage B is included it covers detached structures on the dwelling premises not used for commercial, manufacturing, or farming purposes and further not rented or held for rental to others. There is a policy exception for the storage of commercial farming or manufacturing equipment if it is solely owned by the insured and does not contain gaseous or liquid fuel (other than that contained in a permanently installed fuel tank on the vehicle or craft stored or parked in the structure).
4.7c: Dwelling Program - Coverage C
4.7c: Dwelling Program - Coverage C
Coverage C:
Personal Property: When Coverage C is included it covers household and personal property incidental to dwelling occupancy, both in the dwelling or elsewhere on the premises, belonging to the insured, family members, guests and servants are covered. Properties specifically excluded from coverage include money, tickets, stamps, certain valuable papers, precious metals, animals, birds, fish, aircraft and parts, motor vehicles (except equipment only used for premises maintenance), boats (except rowboats and canoes), books of account, electronic data processing equipment and its software (except blank discs or purchased prerecorded computer programs), water, steam, gravemarkers, and credit and other fund transfer cards.
4.7c: Dwelling Program - Coverage D
Coverage D:
Fair Rental Value: When Coverage D is included the insurer will pay for the fair rental value of the covered property if it becomes uninhabitable from damage by a peril insured against. Coverage D only applies to premises rented to others or held for rental to others. Coverage D pays the fair rental value until the property can be restored to tenantable conditions.
4.7d: Dwelling Program - Coverage E
4.7d: Dwelling Program - Coverage E
Coverage E - Additional Living Expenses: Coverage E covers the additional expenses incurred to maintain the insured’s normal living standards if the property is uninhabitable after damage by an insured peril. Coverage E pays the additional expenses until the property is restored to livable conditions. This coverage is not automatically included on Form DP-1, but it may be added by endorsement.
General Exclusions: All dwelling forms contain the following exclusions: (1) loss from enforcement of any law regulating the use, construction, demolition, or repair of property; (2) earth movement; (3) water damage from a flood, rising waters, backing up of sewers or drains, overflow from a sump pump or subsurface water; (4) damage caused by power interruption if the damaged power source is off the insured premises; (5) neglect of the insured in protecting property from damage; (6) war; (7) nuclear hazards; (8) intentional loss and (9) governmental action. Outside lawns, trees, shrubs, or plants are excluded from coverage on form DP-1.
Basic Form Other Coverages: Other Coverages included on form DP-1 are:
1. Up to 10% of the Coverage A limit may be applied to “Other Structures” as defined in Coverage B.
2. The cost of removal of debris after a covered property loss is included.
3. The insured may apply up to 10 percent of the Coverage C limit to cover damage to improvements, alterations, and additions made or acquired by the tenant to property owned by others.
4. The insured may apply up to 10 percent of the Coverage C limit to property away from the premises, anywhere in the world.
5. Up to 20 percent of the Coverage A limit may be applied to the fair rental value of the property as described in Coverage D. Coverage is limited to 1/12th of the 20 percent per month.
6. The insurer will pay a reasonable cost for necessary repairs to protect the property from further loss after a covered loss has occurred.
7. Coverage is provided for up to five days at a temporary location for the property when removed from the premises after being endangered by a covered peril.
8. The insurer will pay up to an additional $500 for fire department service charges for property owners in unincorporated areas who have a contract with a fire department that requires a service charge.
Except for the Fire Department Service Charge coverage, which is additional insurance, these Other Coverages do not increase the limits of insurance.
4.7d: Dwelling Program - Perils Insured Against
Perils Insured Against:
4.7d: Dwelling Program - Perils Insured Against
Perils Insured Against:
The “Perils Insured Against” section of the dwelling policy states the causes of loss covered by the policy. Form DP-1 provides coverage for the causes of loss stated in the form. If the declarations page of the policy for form DP-1 states fire is covered, the form covers fire, lightning, internal explosion (meaning explosion within the covered property), and Catastrophic Ground Cover Collapse. Florida law requires that Catastrophic Ground Cover Collapse be added to all Dwelling Policies. So fire, lightning, internal explosion, and catastrophic ground cover collapse are all referred to as “fire” coverage, and they are applied to all DP-1 policies.
If the declarations page of the policy for form DP-1 states “extended coverage” or “EC” coverage is provided in the policy, the perils of windstorm, hail, explosion (including external explosions not covered under the peril of fire internal explosions), riot or civil commotion, aircraft, vehicles, smoke (excluding smoke from fireplaces, agricultural smudging or industrial operations), and volcanic eruption are covered. A policy may not be issued covering extended coverage only; coverage for fire must be included. The extended coverage perils are subject to various limitations; for example, windstorm and hail coverage does not cover a loss to awnings, outside antenna equipment, signs, or boats. Damage to the building interior or contents of the building is not covered unless there is first damage to the exterior building roof or walls by windstorm or hail.
The additional peril of vandalism and malicious mischief (commonly known as VMM) may be added to the DP-1 form. VMM coverage excludes damage to building glass, and crime losses (except building damage caused by burglars). VMM coverage does not apply if the building was vacant for 60 or more consecutive days immediately preceding the loss.
Coverage amounts must be equal for each of the perils covered.
Conditions:
The conditions of primary concern in form DP-1 are:
Loss Settlement - Losses are adjusted at the actual cash value of the property.
Other Insurance - If other insurance exists on the same property, the DP-1 policy will pay a prorated share of the loss.
Cancellation/Non-Renewal - Florida law requires an insurer to give the insured at least 120 days advanced written notice of non-renewal stating the reason why the policy is not to be renewed. The insurer must also give 120 days advanced written notice of cancellation stating the reason for such cancellation unless cancellation is for nonpayment of the premium or the cancellation was during the first 90 days the insurance was in force. Cancellation for nonpayment of premium requires a 10-day written notice stating the reason for the cancellation. For cancellation, other than nonpayment of premium, during the first 90 days the insurance is in force, a 20-day advance written notice along with the reason for the cancellation is required; the 20-day requirement does not apply if there has been material misrepresentation or misstatement or for failure to comply with underwriting requirements by the insured.
4.7e: Dwelling Program - Broad and Special Forms
Broad Form:
4.7e: Dwelling Program - Broad and Special Forms
Broad Form:
The DP-2 dwelling form includes the perils covered by the DP-1 form and the following additional perils (each of which has conditions): damage by burglars; objects; the weight of ice, or snow or sleet; accidental discharge or overflow of water or steam found within a plumbing pipe, the air-conditioning unit, or automatic fire protective sprinkler system or from within household appliances; sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system, air-conditioning systems or automatic fire protection sprinkler system, or water heating appliance; freezing of a plumbing, heating, air-conditioning system or automatic fire protection sprinkler system or of a household appliance; accidental damage from artificially generated electrical current; and volcanic eruption.
DP-2 includes the “Other Coverages” of the DP-1 form with variations and broadened features:
1. The 10 percent of Coverage A, which may be applied to other structures, and the 10 percent of Coverage C, which may be applied to tenant’s improvements, apply as additional amounts of insurance. Property removed from the premises endangered by a peril insured against is covered for 30 days.
2. 20 percent of Coverage A may be applied to the combination of rental value and additional living expenses as defined in Coverages D and E. There is no monthly limit, as in DP-1, and coverage applies as an additional amount of insurance.
3. Form DP-2 covers loss to trees, shrubs, and plants. Five percent of Coverage A may be applied as an additional amount of insurance with a limit of $500 on any one tree, shrub, or plant. Only certain perils are covered.
4. Direct physical loss from certain perils to covered property from the collapse of a building or a part of a building is covered.
5. Breakage of glass or of safety glazing material is covered if the dwelling has not been vacant for more than 60 consecutive days immediately prior to a loss.
6. Both Forms DP-2 and DP-3 include Building Ordinance or Law coverage automatically. If the insured is the dwelling owner, 10% of Coverage A applies; if the insured is a tenant, 10% of the Improvements, Alterations, and Additions limit apply. Form DP-1 may be endorsed to provide Building Ordinance or Law coverage.
The DP-2 form includes a loss settlement condition, which adjusts losses on a replacement cost basis if the amount of insurance is not less than 80 percent of the replacement cost of the building. If the coverage is less than 80 percent, the company will pay the proportion of the loss, which the amount of coverage bears, to 80 percent of the full replacement cost (coinsurance clause) but in no event less than actual cash value. The insured must replace the dwelling in order to receive coverage on a replacement basis.
Special Form:
Special form DP-3 provides coverage on an “all-risk” basis insuring for “all-risk” of direct loss is not excluded. The form contains a lengthy list of exclusions but is broader than the DP-2 form providing coverage for miscellaneous, undefined incidents.
4.7f: Dwelling Program - Summary of Differences/Options
Summary of Differences:
4.7f: Dwelling Program - Summary of Differences/Options
Summary of Differences:
The basic form DP-1 covers limited named perils and loss settlement is on an actual cash value basis.
The broad form DP-2 covers additional named perils, broadens the “other coverages” provisions, and may provide for loss settlement on a replacement cost basis.
Special form DP-3 provides coverage on an “all-risk” basis insuring for all risks of direct loss are not excluded.
Options:
The dwelling forms offer several options to alter coverage:
1. An “Automatic Increase in Insurance” endorsement may be purchased specifying an additional percentage of increase(4 percent or higher) applying to Coverages A and B. The percentage purchase is automatically prorated throughout the policy term without the need for the insurer to issue an endorsement.
2. Property not covered for windstorm and hail may be specifically included.
3. The “Building Ordinance or Law” endorsement may be attached to add coverage on the DP-1 form. The automatic coverage on the DP-2 or DP-3 forms may be increased over the automatic 10 percent coverage.
4. Condominium unit owners may purchase coverage for assessments imposed by the condominium’s association because of damage to common elements of buildings, additions, or alterations from a peril covered by the condominium unit owner’s policy.
5. The policy may be endorsed to cover the business’s personal property if a business is conducted in the dwelling.
6. The policy may be endorsed to cover theft including attempted theft, and vandalism, and malicious mischief that results from theft or attempted theft.
Broad theft coverage provides coverage either on or off the premises. Broad theft coverage may be written for owner-occupied dwellings, condominium unit owners, and apartments occupied by a tenant who is the named insured. Special internal limits apply to specific categories of property: $200 for money and related items including precious metals; $1,500 for securities and similar documents; $1,500 for watercraft including trailers, furnishings, equipment, and outboard motors; $1,500 for trailers not used with watercraft; $1,500 for jewelry, watches, furs, and precious and semiprecious stones; $2,500 for firearms and related equipment; and $2,500 for silverware, goldware, and pewterware.
Limited theft coverage may be written for non-owner-occupying dwellings or condominium units and apartments occupied by a tenant who is not the named insured. Limited theft coverage provides on-premises coverage only. Internal limits applying to the specific property are $1,500 for watercraft including trailers, furnishings, equipment, and outboard motors; $1,500 on trailers not used with watercraft; and $2,500 for firearms.
Certain property is excluded on both the broad and limited theft coverage forms: aircraft except model or hobby aircraft; motor vehicles and other motorized land conveyances, their equipment and accessories, except those not subject to motor vehicle registration; salesperson’s samples; the business property of an insured or resident employee; animals, birds and fish; credit cards or other fund transfer cards; and properties specifically insured by other insurance. The broad theft form also excludes property of tenants, boarders, and roomers; property, while it is at other locations owned, rented to, or occupied by an insured, except while an insured, is temporarily residing there; property in the custody of a bailee, except for loss by burglary or robbery; and property while it is in the mail. The limited theft coverage form excludes loss caused by a tenant or boarder; loss caused by members of the tenant’s household or their employees; money and similar property, precious metals, goldware, silverware, pewterware, medals, securities, and similar documents, jewelry, watches, furs, and precious and semiprecious stones.
7. Personal Liability coverage, which will be discussed later, can be added to the dwelling policy.
4.8 Flood:
4.8 Flood:
As previously noted, all property policies exclude flood coverage. The federal government, through the National Flood Insurance Program (NFIP), provides flood coverage. Coverage may be purchased from many private insurance carriers under the “Write Your Own” program, which is 100 percent backed or insured by NFIP.
Flood is defined by NFIP as “the general and temporary condition of partial or complete inundation of normally dry land areas caused by: 1) overflow of inland or title waters; or 2) rapid and unusual accumulation or runoff from any source or 3) mudflow.” NFIP requires any flood to cover a minimum of two acres of land before a “flood” is considered to have occurred for coverage. Flooding of a single property or home would not be covered by a flood policy. The flood policy will also cover flood as defined, which results from a collapse or subsidence of land along the shore of a lake or a similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels.
Flood insurance through NFIP is only available on “eligible” buildings or “eligible” contents within “eligible” buildings and only if the building or contents are located within an “eligible” community.
Eligible Community:
Communities must apply for admittance to the flood program and request a study of the area’s flood potential. This study results in a Flood Hazard Boundary Map being developed. A community is first in the Emergency Program with limited coverage amounts available.
A Flood Insurance Rate Map (FIRM) is developed following a more detailed study of the community. Following the detailed study, and only if the community agrees to pass ordinances (building construction codes, zoning, etc.) designed to lessen or eliminate future flooding will the community be eligible for the Regular Program, which has higher limits of coverage available.
An eligible building must be a structure with two or more outside rigid walls and a fully secured roof; be affixed to a permanent site (mobile homes must meet anchoring requirements); be principally above ground (50 percent or more of value), and be located within an eligible community. Eligible contents must be located within an enclosed building or secured to prevent flotation out of the building. Certain specific properties in basements and under elevated floors of buildings are excluded from coverage.
Insurance Forms Available:
Dwelling Form: This form applies to policies written on 1to 4 family dwellings. Up to 10 percent of the dwelling limit may apply to detached garages or carports; this is not an additional amount of insurance. Other separate structures (garage apartments, utility buildings, storage sheds) must be insured under a separate policy.
Preferred Risk Policy: This form is similar to the Dwelling Form. The form may only be used to cover 1-4 family dwellings located in flood zones B, C, and X. The form is not available under the Emergency Program and is subject to specific coverage limit combinations.
General Property Form: This form applies to all buildings and contents not eligible under the dwelling form or the condominium policy.
Residential Condominium Building Association Policy Form (RCBAP): This form applies to any condominium association with one or more residential units. At least 75 percent of the total floor area of the condominium must be residential, and the building must be located in a Regular Program Community.
Limits Available:
The study guide shows the following limits available under the Regular Program and the Emergency Program.
Building Regular Program
Basic Amount +
Additional
Amount =
Total
Amount Emergency
Program
Total Amount
Single Family Dwelling $50,000 $200,000 $250,000 $35,000
2-4 Family Dwelling $50,000 $200,000 $250,000 $35,000
All other residential $135,000 $115,000 $250,000 $100,000
All other properties $135,000 $365,000 $500,000 $100,000
Contents
All residential $15,000 $85,000 $100,000 $10,000
All other $115,000 $385,000 $500,000 $100,000
Valuation of Losses:
Replacement cost coverage is provided for single-family dwellings if the dwelling is the insured’s principal residence (must be the insured’s residence 80% of the time) and if the dwelling is insured for at least 80 percent of its replacement cost or the maximum limit available from NFIP. The Residential Condominium Building Association Policy (RCBAP) also provides replacement costs subject to a coinsurance clause. Other losses are settled on an actual cash value basis.
4.9 Personal Liability:
While not identical, the coverages of the personal liability policy are much the same as the coverages found in section II of the homeowner’s policy.
Coverage is available to owner-occupants or non-owner-occupants of a dwelling, condominium unit, mobile home, co-operative, or apartment. Coverage is for liabilities arising from private residences and personal activities. Insureds include the named insured In the declarations page, a residing spouse, residing relatives, and any person under age 21 in the care of the named insured or spouse. In addition, any person legally responsible for animals or watercraft owned by an insured and being used with an insured’s permission is covered.
The minimum limits available are $100,000 for Liability, $1,000 for Medical Payments, and $1,000 Damage to Property of Others. Similar to the homeowner’s policy there is a $10,000 cap on statutorily imposed vicarious parental liability. There is no build-in coverage for loss assessments imposed by condominium or homeowners associations although coverage can be added by endorsement.
Permitted incidental business pursuits, sailboats 26 feet or more in length, and watercraft up to 26 feet in length powered by an outboard motor exceeding 25 horsepower, an inboard motor, or an inboard-outboard motor may be covered on the policy by endorsement. The Personal Liability policy does not offer an option for covering farming exposures or personal injury liability.
4.10 Inland Marine Insurance:
4.10 Inland Marine Insurance:
Inland Marine insurance was first developed as an extension of Ocean Marine coverage (which will be discussed later), to provide coverage for cargo traveling overland, instead of by sea.
4.11a Personal Inland Marine Policies:
4.11a Personal Inland Marine Policies:
Specific property floaters can be initiated for the following personal coverages:
(1) Cameras;
(2) Fine Arts;
(3) Golfer’s Equipment;
(4) Jewelry and Furs;
(5) Musical Instruments;
(6) Stamp and Coin Collections; and
(7) Silverware.
In addition general property floaters can be issued for:
(1) Personal Effects; and
(2) Personal Property.
Most personal inland marine coverage is written in the homeowner’s program under the scheduled property endorsement. Coverage is generally the same whether written on a separate inland marine policy or a homeowner’s endorsement. The floaters listed above are all controlled lines of business.
4.11b Personal Inland Marine Policies:
4.11b Personal Inland Marine Policies:
Personal Articles Floater:
Each specific property may be covered on separate floater forms, but the more common method is to combine all into a single policy form, the Personal Articles Floater (PAF).
The PAF contains a declaration with the listed types of properties shown as covered by inserting an amount of insurance and premium, therefore. A separate schedule listings specific articles with separate amounts of insurance may be attached.
“Open Perils” or “All risk” coverage applies to property covered under a PAF form. Common exclusions are for wear and tear, deterioration, inherent vice, government action, and loss caused by insects or vermin. “Inherent vice” is a quality within an object that results in the object tending to damage or destroy itself.
4.11c Personal Inland Marine Policies:
4.11c Personal Inland Marine Policies:
Except as otherwise noted, the PAF’s territory of coverage is “worldwide.”
Coverage is for the lesser of ACV, the cost to repair or replace, or the limits specified for coverage. An option for agreed value is available.
A special condition applies to “pairs, sets, and parts.” If there is a loss to a pair or set, the company may elect to repair or replace in a way that restores the pair or set to the original value, or to pay the difference between ACV before and after the loss.
For the loss of a part of cover property made up of parts, the insurer’s responsibility is only for the value of the part lost or damaged.
Under the standard policy, no deductible applies to losses under a PAF.
4.1 HOMEOWNERS INSURANCE
4.1 HOMEOWNERS INSURANCE
Eligibility Requirements:
1. Owner-occupants of one-to-four (l-4) family dwellings
a. Allows up to two roomers or boarders per family, owner must reside in one unit
2. Renters residing in any building
3. Condo and co-op apartment occupants
4. Dwelling under construction
4.1 HOMEOWNERS INSURANCE
Not Eligible:
4.1 HOMEOWNERS INSURANCE
Not Eligible:
1. Corporation
2. Partnership
3. Estate
4. Individual who does not occupy the premises (EXCEPTION: if a condo unit owner who rents the unit to others is eligible)
5. Farms, EXCEPT incidental farming is eligible
© Example: Family has garden located in backyard. That is not considered farming.
4.1 HOMEOWNERS INSURANCE
4.1 HOMEOWNERS INSURANCE
Insured can be a:
1. Person named
2. Residing spouse
3. Residing relatives of either
4. Trust (with endorsement)
5. Life estate arrangement
6. Person under the age of 21 in care of named insured
7. A student away at school if related to the named insured under the age of 24 and a full-time student. Full-time is defined by the school.
For Section II Liability Only: a named insured can be persons legally liable for animals or watercraft ovmed
by the insured.
4.1 HOMEOWNERS INSURANCE
4.1 HOMEOWNERS INSURANCE
Tailoring the Policy:
1. Declarations
2. One of the forms (2, 3, 4, 5, 6, 8)
3. Endorsements
4.1 HOMEOWNERS INSURANCE
Forms Available:
4.1 HOMEOWNERS INSURANCE
Forms Available:
1. HO-2 Broad Form {l-4 family)
2. HO-3 Special Form {1-4 family)
3. HO-4 Contents (Renters)
4. HO-5 Comprehensive (1-4 family)
5. HO-6 Unit Owners Form (Condos/cooperatives)
6. HO-8 Modified Form {1-4 family)
For owner-occupants of 1 to 4 family dwellings only forms HO-2, 3, 5, or 8 apply. If the insured rents, then the HO-4 applies.
If the insured is a condominium unit owner or cooperative apartment dweller, then an HO-6 would apply even if the insured rents the unit.
HO-2 Name Peril Broad Form First Party Coverage - A: - Dwelling
HO-2 Name Peril Broad Form First Party Coverage - A: - Dwelling
100% of replacement cost
HO-2 Name Peril Broad Form First Party Coverage - B: Other Structure
HO-2 Name Peril Broad Form First Party Coverage - B: Other Structure
10% of A
HO-2 Name Peril Broad Form First Party Coverage - C: Personal Property
HO-2 Name Peril Broad Form First Party Coverage - C: Personal Property
50% of A
HO-2 Name Peril Broad Form First Party Coverage - D: Loss of Use
HO-2 Name Peril Broad Form First Party Coverage - D: Loss of Use
30% of A
HO-2 Name Peril Broad Form Third Party Coverage - E: Liability
HO-2 Name Peril Broad Form Third Party Coverage - E: Liability
Liability: $100,000
HO-2 Name Peril Broad Form Third Party Coverage - F:
Medpay
HO-2 Name Peril Broad Form Third Party Coverage - F:
Medpay $1000
HO-3 All Risk Special Form First Party Coverage - A: - Dwelling
HO-3 All Risk Special Form First Party Coverage - A: - Dwelling
100% of replacement cost
HO-3 All Risk Special Form First Party Coverage - B: Other Structure
HO-3 All Risk Special Form First Party Coverage - B: Other Structure
10% of A
HO-3 All Risk Special Form First Party Coverage - C: Personal Property
HO-3 All Risk Special Form First Party Coverage - C: Personal Property
50% of A
HO-3 All Risk Special Form First Party Coverage - D: Loss of Use
HO-3 All Risk Special Form First Party Coverage - D: Loss of Use
30% of A
HO-3 All Risk Special Form Third Party Coverage - E: Liability
HO-3 All Risk Special Form Third Party Coverage - E: Liability
Medpay $100,000
HO-3 All Risk Special Form Third Party Coverage - F: Medpay
HO-3 All Risk Special Form Third Party Coverage - F: Medpay
$1,000
HO-4 Renters First Party Coverage - A: - Dwelling
HO-4 Renters First Party Coverage - A: - Dwelling
Not Needed silly!
HO-4 Renters First Party Coverage - B: Other Structure
HO-4 Renters First Party Coverage - B: Other Structure
Not needed
HO-4 Renters First Party Coverage - C: Personal Property
HO-4 Renters First Party Coverage - C: Personal Property
100% of value of stuff
HO-4 Renters First Party Coverage - D: Loss of Use
HO-4 Renters First Party Coverage - D: Loss of Use
30% of C
HO-4 Renters Third Party Coverage - E: Liability
HO-4 Renters Third Party Coverage - E: Liability
$100,000
HO-4 Renters Third Party Coverage - F: Medpay
HO-4 Renters Third Party Coverage - F: Medpay
$1000
HO-5 All Risk Comprehensive Form - A: Dwelling
HO-5 All Risk Comprehensive Form - A: Dwelling
100% of Replacement Cost
HO-5 All Risk Comprehensive Form - B: Other Struture
HO-5 All Risk Comprehensive Form - B: Other Struture
10% of A
HO-5 All Risk Comprehensive Form - C: Personal Property
HO-5 All Risk Comprehensive Form - C: Personal Property
50% of A
HO-5 All Risk Comprehensive Form - D: Loss of use
HO-5 All Risk Comprehensive Form - D: Loss of use
30% of A
HO-5 All Risk Comprehensive Form - E: Liability
HO-5 All Risk Comprehensive Form - E: Liability
$100,000
HO-5 All Risk Comprehensive Form - F: Medpay
HO-5 All Risk Comprehensive Form - F: Medpay
$1000
HO-5 Unit Owner Condo Form - A: Dwelling
HO-5 Unit Owner Condo Form - A: Dwelling
$5000 built in, 100% of replacement cost
HO-5 Unit Owner Condo Form - B: Other Struture
HO-5 Unit Owner Condo Form - B: Other Struture
$0
HO-5 Unit Owner Condo Form - C: Personal Property
HO-5 Unit Owner Condo Form - C: Personal Property
100% value of stuff
HO-5 Unit Owner Condo Form - D: Loss of use
HO-5 Unit Owner Condo Form - D: Loss of use
50% of C
HO-5 Unit Owner Condo Form - E: Liability
HO-5 Unit Owner Condo Form - E: Liability
$100,000
HO-5 Unit Owner Condo Form - F: Medpay
HO-5 Unit Owner Condo Form - F: Medpay
$1000
4.2 SECTION I: PROPERTY COVERAGE
4.2 SECTION I: PROPERTY COVERAGE
Section I: Property which is first-party
1. Coverage A: Dwelling
2. Coverage B: Other Structure
3. Coverage C: Personal Property
4. Coverage D: Loss of Use
4.2 SECTION I: PROPERTY COVERAGE
Coverage A: Dwelling
4.2 SECTION I: PROPERTY COVERAGE
Coverage A: Dwelling
Covers:
Coverage A covers the dwelling and structures that are ATTACHED and construction materials onsite.
Example: Dan is building an addition onto his home. During the construction of the addition, the local supply company drops off wood, paint, and nails. After the delivery,
the construction site is destroyed in a fire. Under Coverage A, the wood, paint, and nails would be covered even though it is not yet part of the dwelling.
4.2 SECTION I: PROPERTY COVERAGE
4.2 SECTION I: PROPERTY COVERAGE
H0-6 (condo) Coverage A:
1. Covers certain interior building items
2. A basic limit of $5,000 applies or higher limits if approved
3. The unit owner will usually need an increased amount over the H0-6 basic Coverage A
4.2 SECTION I: PROPERTY COVERAGE
4.2 SECTION I: PROPERTY COVERAGE
H0-4 Coverage A:
Not included.
Remember: The renter does not own the building therefore doesn’t need Coverage A.
4.2 SECTION I: PROPERTY COVERAGE
Coverage B: Other Structures
4.2 SECTION I: PROPERTY COVERAGE
Coverage B: Other Structures
Coverage B covers private structures on the residence premises that are NOT ATTACHED to the main dwelling.
Example: Detached garage, guest house, fence, tennis court, or shed.
Coverage B does not include structures used for certain business purposes or rented to anyone who is not a tenant of the main dwelling UNLESS rental is for private garage purposes.
Example: Lisa’s neighbor just bought their daughter a new car. With no room to store it, Lisa rents the space in her detached garage to the neighbor to store their daughter’s car. The neighbor’s car will be covered if a covered loss damages the detached garage. Why? Because it was being used a private garage.
Coverage B IS NOT in the H0-4 or H0-6.
Coverage B is AUTOMATICALLY 10% of Coverage A.
4.2 SECTION I: PROPERTY COVERAGE
Coverage C: Personal Property
4.2 SECTION I: PROPERTY COVERAGE
Coverage C: Personal Property
Coverage C covers personal property owned or used by the insured ANYWHERE in the WORLD. Optionally, the insured can give the coverage to property owned by others while the property is located at any residence occupied by insured.
Coverage C is AUTOMATICALLY 50% of Coverage A.
Example: I take my neighbor’s rake to the jungles of South America to do some raking. My homeowners policy will cover that rake if I lose it or break it.
Exclusions:
1. Specifically insured articles
2. Animals, birds, or fish
Remember: The homeowners policy does offer liability if Fido bites your neighbor; but the policy doesn’t cover to replace Fido if he passes away.
- Motorized vehicles EXCEPT vehicles for the handicapped or premises maintenance. Motorized vehicle exclusion INCLUDES the equipment and parts, but DOES NOT APPLY to:
a. Portable electronic equipment that reproduces, receives, or transmits audio, visual, or data signals and is designed to be operated by the power from electronic system of a motorized vehicle.
Remember: The exception refers to riding lawnmowers, golf carts, or a motorized wheelchair.
4. Aircraft and parts EXCEPT model or hobby aircraft
Remember: It does not apply to model or hobby aircraft that is not designed or used to carry people or cargo.
- Hovercraft and parts
- Property of roomers or tenants, unless related to the insured
Remember: The reason for this exclusion is roomers and boarders buy their own coverage, i.e.
H0-4.
- Property in an apartment that is regularly rented or available for rentals to others
- Property that is rented or held for rental to others away from the residence premises
- Business data in books, paper records, or electronic software media EXCEPT blanks
- Water or steam
Remember: If the insureds home burns and pipes crack causing a $675 water bill, this added expense would not be covered. .
