Home owners policy Flashcards
Eligibility
owner-occupant of the insured dwelling, which serves as the named insured’s residence. The Contents Broad Form (HO–4), also called the Tenant’s Form, and the Unit-Owners Form (HO–6) are exceptions to this requirement and are designed for insureds who live in a particular unit, rather than own the building itself. The HO–4 is designed for tenants of residential units, such as dwelling or apartment units, and coverage is focused on the tenant’s personal property. The HO–6 is designed for the owners and tenants of condominium or cooperative units, and coverage is focused on personal property and the portion of the building the named insured either owns or is responsible for insuring.
Residential farm dwellings are not eligible for a Homeowners policy and require separate insurance.
Which residential dwelling is eligible for a Homeowners policy?
A single-family home occupied by its owner and 2 roomers
Coverage A
Dwelling
Coverage B
Other structures
Coverage C
Personal Property
Coverage D
Loss of use
Coverage E
Personal Liability
Coverage F
Medical payments to others
Broad Form HO-2
Fire or lightning
Windstorm or hail
Aircraft
Riot or civil commotion
Vehicles, except that this form will not cover losses to a fence, driveway, or walk caused by a vehicle owned or operated by the insured
Volcanic eruption
Explosion
Smoke, excluding loss by smoke from agricultural smudging or industrial operations
Vandalism or malicious mischief
Theft
Falling objects
Weight of ice, snow, or sleet, except that loss to an awning, fence, patio, swimming pool, foundation, or similar is not covered
Accidental discharge or overflow of water or steam from a plumbing, heating, air conditioning, or automatic fire protective sprinkler system, or a household appliance
Sudden and accidental tearing apart, cracking, burning, or bulging of heating or air conditioning systems
Freezing of a plumbing, heating, air conditioning, or automatic fire protective sprinkler system, or of a household appliance, as long as the insured used reasonable care to maintain heat in the building
Sudden and accidental damage from artificially generated electrical current, not including physical losses to tubes, transistors, home appliance circuitry, or electrical components of computers or home entertainment units
fully enclosed building
The Windstorm or Hail peril includes loss to all watercraft and their trailers, furnishings, and equipment only if they are located inside a f
industrial operations or agricultural smudging
The Smoke peril covers damage like smoke puffback, where a clogged furnace or oil burner backfires and the resulting smoke and soot damages the building or personal property. However, coverage is not provided for smoke resulting from
Coverage for theft is limited
Coverage is not provided if the theft is committed by any insured, if the theft occurs in or to a dwelling under construction, or if the theft is from a part of the premises that is rented to others. Off-premises theft is not provided for trailers, campers, watercraft and their equipment, or property at another residence owned by, rented to, or occupied by an insured on a non-temporary basis (other than student housing).
Coverage for VMM
accidental discharge or overflow of water or steam does not apply if the dwelling was vacant for more than 60 days immediately before the loss. This Vacancy provision applies to all Homeowners forms. Dwellings under construction are not considered vacant
Losses coverage A and B
replacement cost basis
Losses Coverage C
Actual cash value
Broad form named Perils
Fire or lightning
windstorm or hail
aircraft
riot or civil commotion
vehicles
volcanic eruption
explosion
smoke
VMM
theft
falling objects
weight of ice snow sleet
water steam discharge
sudden tearing apart
freezing
sudden damage from artificial electric current
Which of the following correctly describes the HO-2?
The HO-2 insures against named perils
Special Form (HO–3)
On the Special Form, the dwelling and other structures are insured on an open perils basis, covering all direct loss except for any excluded causes of loss. In addition to the Section I Exclusions, the HO–3 excludes the following perils under Coverages A and B:
Freezing of household appliances or a plumbing, heating, air conditioning, or automatic fire protective system, unless the insured has taken reasonable care to maintain heat in the building or shut off the water supply and drained the appliances and water systems
Freezing, thawing, pressure, or weight of water or ice on patios, fences, swimming pools, foundations, piers, docks, or retaining walls
Theft in or to a dwelling under construction, including construction-related materials and supplies
Vandalism and malicious mischief, including ensuing loss, if the dwelling has been vacant for more than 60 consecutive days immediately before the loss
Smoke from agricultural smudging or industrial operations
Mold, fungus, or wet rot
However, coverage is given back if it is hidden from view and results from accidental discharge or overflow of water or steam from an on-premises system or appliance. Coverage is also given back for hidden mold, fungus, or wet rot resulting from accidental discharge or overflow of water from an off-premises storm drain or sewer pipe.
Collapse, except as provided by the Collapse Additional Coverage
Wear and tear or deterioration
Mechanical breakdown, latent defect, or inherent vice
Smog, rust, corrosion, or dry rot
Pollution, including discharge, migration, or release of smoke, vapor, fumes, acids, or other chemicals, unless caused by a Broad Form named peril
Settling, cracking, bulging, or expansion of foundation, walls, floors, pavements, and patios
Birds, rodents, or insects
Animals owned or kept by an insured
Special Form (continued)
Coverage C protection for personal property insures against the same named perils insured against by the Broad Form
Like the Broad Form, losses to the dwelling and other structures are valued on a replacement cost basis, and losses to personal property are settled on an ACV basis.
Specfically excluded special form open perils HO-3
Collapse ,except by additional coverages
Vandalism and malicious mischief if dwelling vacant for more than 60 days
Theft in or to a dwelling under construction including construction related materials and supplies
Freezing,thawing,pressure or weight of water or ice on patios,fences ,swimming pools ,etc
Freezing of appliances or systems if the insured has not taken reasonable care
Smoke from argricultural smudging ,indsutrial operations
mold ,fungus , or wet rot unless resulting from accidental discharge hidden from the view
Wear and tear, maring, deterioration, mechanical breakdown ,latent defect, inherent vice
Pollution
Settling, Cracking, Bulging or expansion of foundation
Birds, Vermin , Rodents, Insects or animals owned or kept by an insured
Contents Broad Form (HO–4)
The Contents Broad Form is also known as the Renter’s or Tenant’s Form. Unlike the other forms, coverage is not provided for real property, like the dwelling or other structures, as the insured is only a tenant of the dwelling and is not responsible for insuring the structure itself. Coverage C will insure personal property against the Broad Form named perils, and losses are settled on an ACV basis
Comprehensive Form (HO–5)
Coverages A, B, and C provide insurance on an open perils basis. Like the other forms, losses to the dwelling and other structures are valued on a replacement cost basis, and losses to personal property are valued on an actual cash value basis
In what way is the HO-5 Comprehensive Form different from the HO-3 Special Form?
Personal property under the HO-5 is insured on an open perils basis
Unit-Owners Form (HO–6)
The Unit-Owners Form is designed for the owners of condominium and cooperative units. The insured may be a renter of the unit, but some insurers may consider renters ineligible for this form.
Like the HO–4, the HO–6 has limited coverage because, though the insured may own the particular unit in which they live, they do not own the building in its entirety. Coverage A is provided for the part of the dwelling the insured owns or is otherwise responsible for insuring under the condominium association’s bylaws, including building alterations and improvements. Coverage C is provided for the insured’s personal property while anywhere in the world. Though Coverage B does not appear on the form, if the insured owns other structures on the premises and wants to insure them, the value of the other structures may be included in the Coverage A limit.
The dwelling and personal property are insured against the Broad Form named perils. Losses to the dwelling are valued on a replacement cost basis, and losses to personal property are settled on an ACV basis.
Unit-Owners Form (HO–6)
The insured condo is damaged by burglars. The insurer pays for the damage to the property, but it does not cover the contents that do not belong to the insured.
Modified Form (HO–8)
fire and lightning, windstorm and hail, riot, aircraft, vehicles, volcanic action, explosion, smoke, VMM, and theft. Most of these have the same limitations seen in the HO–2, except that the Theft peril limits coverage to $1,000 for any one loss and will not cover any off-premises theft. For losses to the dwelling or other structures, insurers will pay up to the functional replacement cost of the damage, meaning the necessary amount to repair or replace the damage with their functional equivalent when common methods and materials are less costly than custom, antique, or obsolete methods and materials.
Modified Form (HO–8)
The insured property is damaged in a hailstorm. Because of the age of the home, the insurer pays for materials that will perform the same function as the original materials.
Comprehensive Form (HO–5)
The insured property and some contents inside are damaged after a deer broke into the home. The insurer pays for damages to the building on a replacement cost basis and damages to personal property on an actual cash value basis.
Contents Broad Form (HO–4)
R is a tenant of a house, and their couch is damaged by accidental discharge of water. The insurer pays the claim on an actual cash value basis.
Special Form (HO–3)
A stray dog breaks through the door of the N’s detached garage and damages personal property stored in the garage. The damage to the door is settled on a replacement cost basis, but damage to personal property is not covered.
Broad Form (HO–2)
J is teaching a family member, T, how to drive J’s car. T accidentally drives into J’s garage and fence, causing damages. The damages to the garage are covered on a replacement cost basis, but the damage to the fence would not be covered under this form.
Open perils basis
HO-3 Coverage A
HO-5 Coverage c
HO-5 coverage b
ho5 coverage a
ho3 coverage b
Named perils basis
ho-3 coverage c
ho 4 coverage c
ho-2 coverage b
ho-6 coverage c
ho 6- coverage a
ho2 coverage a
ho2 coverage c
Insured
The named insured and their spouse if the spouse is a member of the named insured’s household
Other residents of the named insured’s household who are:
Relatives of the named insured, meaning they are related by blood, marriage, or adoption
Under the age of 21 and in the care of any insured, such as a foster child
A student enrolled in school full time who was a resident of the named insured’s household before moving out to attend school, provided the student is a relative under the age of 24, or under 21 and in an insured’s care
Under Section II – Liability Coverages, the insured also refers to:
With respect to a motor vehicle to which coverage applies, persons using the vehicle on an insured location with the insured’s consent and persons while engaged in the employment of the named insured or a resident relative
Any person or organization legally responsible for covered animals or watercraft owned by an insured, unless custody of animals or watercraft is in the course of business as defined by the policy or the person or organization has custody without the owner’s consent
A related, full-time student away at school is considered an insured on a Homeowners policy if thy are under what age?
24
Bodily Injury
Bodily injury includes bodily harm, sickness, and disease, including any required care, loss of services (such as loss of consortium), and death that results.
Property Damage
Property damage includes physical injury to, destruction of, or loss of use of tangible property.
Residence Premises
The residence premises is the 1- to 4-family dwelling where the insured resides, including other structures and grounds at that location. On the HO–6 (Condo Unit-Owners Form), the residence premises is the unit in which the insured resides.
Insured Location
Insured location refers to:
The residence premises listed on the Declarations page
Any other premises used as a residence by the insured, but only if it is either shown in the Declarations or acquired during the policy period
Any premises used in connection with a residence premises, such as a boat slip
Any non-owned premises where the insured is temporarily residing, such as hotel rooms or summer vacation rentals
Vacant land, other than farmland, owned by or rented to an insured
Land owned or rented by an insured where a residence is being built for the insured
Individual and family cemetery plots or burial vaults of an insured
Any part of a premise occasionally rented to an insured for non-business use, such as a banquet hall where a wedding reception is hosted
On a Homeowners policy, the insured location includes all of the following premises, except:
Any premises used in connection with the insured’s business
Residence Employee
An employee of an insured whose duties are related to the maintenance or use of the residence premises, including household and domestic services like a gardener or nanny.
Business
The policy understands a business to be a trade, profession, or occupation engaged in on a full-time, part-time, or occasional basis, or any other activity engaged in for money or other compensation. This definition does not include a profession or activity for which the insured received $2,000 or less in the 12 months before the beginning of the policy period. It also does not include volunteer activities, an exchange of home day care services, or rendering home day care services to a relative of an insured.
Deductible
When a loss occurs, the insured pays an amount equal to the amount of the deductible shown in the Declarations, and the insurer pays the balance of the loss that exceeds the deductible amount, subject to the policy limits. Unless otherwise noted in the policy, all property losses are subject to a deductible. The standard deductible is $250, but the insured may choose a higher or lower amount.
Coverage A – Dwelling
Coverage A does not cover the land on which the dwelling is located.Under Coverage A of most forms, the policy covers the dwelling located on the residence premises shown in the Declarations, including structures attached to the dwelling, such as porches, breezeways, attached garages, and decks. Coverage A protection also applies to materials and supplies located on or next to the residence premises used to construct, alter, or repair the dwelling or other structures. For example, the pile of lumber in the insured’s backyard that will be used to construct a deck off the kitchen is covered by dwelling coverage if it were to be destroyed by a fire.
Coverage A does not cover the land on which the dwelling is located.
Coverage A on the HO–6
Because insureds with an HO–6 policy are unit-owners of a condo, rather than owners of the building in its entirety, Coverage A offers different coverage. Coverage applies to:
Alterations, appliances, fixtures, and improvements that are part of the building in the covered unit
Property the insured must insure under agreement with a property owner corporation or association
Other structures located in the residence premises and owned solely by the insured
Coverage A on the Unit-Owners Form does not apply to:
Land on which the residence premises is located
Structures rented or held for rental to any person who is not a tenant, except as a private garage
Structures used to conduct business operations
Coverage a covers
dwelling on residence premises listed on dec page
Structures attached to dwelling
Materials and supplies on or next to premises and used to construct or repair dwelling or other structures
coverage is not provided for land
A Unit-Owners Form (HO-6) Homeowners policy covers all of the following under the policy’s dwelling coverage, except:
Land
Coverage A Limit of Liability
When a limit of liability is chosen for dwelling coverage, the other three property coverages are automatically issued at limits equaling a specific percentage of the Coverage A limit of liability. If these limits are inadequate, the insured may purchase higher limits. For example, if the value of a detached garage exceeds the automatic limit applying to other structures (Coverage B), the insured may purchase a higher limit by endorsement.
Coverage B – Other Structures
Coverage B applies to other structures on the residence premises that are set apart from the dwelling by a clear space, including structures connected to the dwelling only by a fence, utility line, or similar connection. Sheds, detached garages, and in-ground pools are examples of other structures.
Other structures coverage does not cover:
Land, including land on which the other structures are located
Other structures rented or held for rental to anyone who is not already a tenant of the dwelling, unless the other structure is used solely as a private garage
Other structures from which any business is conducted
Other structures used to store business property that is owned by someone other than an insured or a tenant of the dwelling
The Coverage B limit of insurance is 10% of the Coverage A limit, and it does not reduce the Coverage A limit of liability.
Property Coverages - other structures
Structures must be separated from the dwelling by clear space
Structures may be rented as a private garage
Structures may store insured’s business property
Structures can not be used for business purposes
Coverage C – Personal Property
The Coverage C limit of insurance is 50% of the Coverage A limit of liability. Within this limit, certain types of personal property have limitations. If the personal property is usually located at a secondary residence that is not considered the residence premises, coverage is limited to 10% of this Coverage C limit or $1,000, whichever amount is greater. This limit would apply to a college student’s personal property away at school or property at the insured’s summer home. The same limitation applies to personal property located in a self-storage facility.
For the HO–4, which does not offer dwelling coverage, and HO–6, which offers limited dwelling coverage, the insured may select the Coverage C limit.
Coverage C Special Limits
Money, bank notes, bullion, coins, medals, etc. -200
Securities, deeds, evidences of debt, notes other than bank notes, personal records, manuscripts, passports, tickets, and stamps -$1,500
Watercraft of all types, including their trailers, furnishings, equipment, engines, and outboard motors. Losses to watercraft caused by collision or sinking are excluded-1500
Trailers or semi-trailers not used with any watercraft -1,500
Theft loss to jewelry, watches, furs, and precious or semiprecious stones. On the HO–5 only, loss by misplacing or losing is also covered- 1,500
Theft loss to firearms and related equipment, such as holsters and ammunition. On the HO–5 only, loss by misplacing or losing is also covered- $2,500
Theft loss to silverware, goldware, pewterware, platinum ware, including tea sets, trays, trophies, and flatware made of any of those materials. On the HO–5 only, loss by misplacing or losing is also covered- 2500
Portable electronic equipment that reproduces, receives, or transmits audio, visual, or data signals, and that can be operated by more than one power source, including a motor vehicle’s electrical system. Examples would include a phone, tablet, and computer (as long as they are not permanently installed in a vehicle). This limit applies only if the electronics are located in or on a motor vehicle; otherwise, coverage is provided under Coverage C’s regular limit-$1,500
Accessories for electronics that are located in or on a motor vehicle. This includes antennas, tapes, wires, records, disks, and other media used with electronics-250
Property on the residence premises used primarily for business purposes, such as a computer used by the insured in a home-based business. The limit does not apply to a personal computer used by the insured occasionally when bringing work home from the office that is otherwise used primarily for personal and household purposes-2,500
Property away from the residence premises used primarily for business purposes. This limit does not apply to antennas, tapes, wires, etc. that are used with electronic equipment and located in or on a motor vehicle-1,500
Coverage c
Personal property of an insured covered anywehre in the world
may insure property guests or residence employees
does not cover property of roomers and boarders
Coverage C Property Not Covered
Some items of personal property are not covered under Coverage C, usually because they can be insured elsewhere. Property not covered includes:
Property specifically described and insured elsewhere, such as on another policy or by a different part of the Homeowners policy
Animals, birds, or fish
Motor vehicles, including their equipment and parts
However, coverage is provided for motor vehicles not required to be registered for use on public roads that are used solely to service a residence (such as a riding lawn mower), or those designed to assist people with disabilities (such as a motorized wheelchair)
Aircraft, including its parts, except that model or hobby aircraft are covered as long as they are not used or designed to carry people or cargo
Hovercraft, including its parts
Property of roomers, boarders, and other tenants who are not related to an insured
Property in an apartment regularly rented or held for rental to others by an insured, except for property covered under the Landlord’s Furnishings Additional Coverage
Property rented or held for rental to others off the residence premises
Business data stored on paper records or on computers
Credit cards and electronic fund transfer cards, except when coverage is provided by an Additional Coverage
Water or steam, such as the increased water bill when a toilet breaks and water fills the basement
Which item of property is considered property NOT covered by Coverage C?
Personal property of a tenant
Coverage D – Loss of Use
Homeowners policies define property damage as physical injury to tangible property, including loss of use of that property. Three types of loss of use coverage are provided under Coverage D for indirect, or consequential, losses: additional living expense, fair rental value, and civil authority prohibits use. Coverage D will not cover expenses resulting from lease cancellation.
Additional Living Expense (ALE)
If a property loss covered by Section I of the policy makes the residence premises unfit to live in, Coverage D pays for any necessary increase in living expenses incurred by the named insured to maintain the household’s normal standard of living. ALE coverage would pay for the cost of a hotel, the increased cost of food while eating out, and other incidental expenses like laundry.
The period during which additional living expenses will be paid is limited to the shortest time required to repair or replace the damage, or to settle elsewhere if the insured must permanently relocate.
Fair Rental Value
If a covered property loss makes that part of the residence premises rented to others unfit to live in, the policy pays for the its fair rental value, less any continuing expenses, while it is unfit. Payment is for the shortest time required to repair or replace the rented portion of the premises.
Civil Authority Prohibits Use
If a civil authority prohibits the named insured from using the residence premises as a result of direct damage to a neighboring premises by a peril insured against, the insurer would cover additional living expenses and fair rental value, as applicable, for no more than 2 weeks.
Coverage D
indirect losses
additional living expenses -necessary increases in living expenses of insured to maintain normal standard of living .
fair rental value -value of portion of residence premises rented to others
civil authority -additional living expense and fair rental value paid if civil authority prevents use of residence premises due to direct damage to neighboring premises by a covered peril.
Coverage D - Loss of Use includes all of the following coverages, except:
Business income
Coverage D limits of coverage
The limit of liability for Coverage D is the total limit for ALE, fair rental value, and civil authority payments. The standard forms do not include a specific limit of insurance, and the limit may vary by state, insurer, policy form, and actual incurred expenses. Common limits for Coverage D are:
30% of the Coverage A limit for the HO–2, HO–3, and HO–5
30% of the Coverage C limit for the HO–4
50% of the Coverage C limit for the HO–6
10% of the Coverage A limit for the HO–8
As long as a covered loss occurs during the policy period, payments under Coverage D may extend beyond the policy’s expiration date.
Coverage a
fireplace
installed carpeting
tile floors
Coverage B
Detached garage
Fence
Swimming pool
Coverage C
Money
Home computer
Furniture
Sofia and Liam have a Special Form Homeowners policy with standard limits of insurance. The replacement value of their home is $300,000. Match which limit would apply to each coverage.
Dwelling coverage-$300,000
Other Structures coverage-30,000
Personal Property coverage-$150,000
Loss of Use coverage-$90,000
Debris Removal
If the insured incurs expenses removing debris from a covered loss, the policy will pay from the limits of insurance applicable to the covered property to cover the costs of removal. If the covered loss and debris removal expenses exhaust the coverage limit, debris removal coverage will pay up to an additional 5% of the applicable coverage limit for debris removal.
Debris removal coverage will also pay up to $1,000 for the removal of trees felled by windstorm, hail, or the weight of ice, snow, or sleet. To activate coverage, trees must damage a covered structure, block a driveway, or block a ramp designed to assist people with disabilities. The limit for the removal of any one tree is $500. This is paid in addition to policy limits.
If the amount of a covered loss plus any debris removal expenses exceeds the policy’s limit of liability, the Debris Removal Additional Coverage provides additional debris removal expense coverage equal to:
5% of the limit applicable to the loss
Reasonable Repairs
When the insured’s property has been damaged by a covered peril, this coverage pays the reasonable cost of necessary measures taken to protect covered property from further damage, such as the expenses to place a tarp over a hole in the roof. This coverage does not increase the limit of insurance that applies to the covered property.
Trees, Shrubs, and Other Plants
Coverage is provided for losses to trees, shrubs, or plants damaged by the perils of fire, lightning, explosion, riot or civil commotion, aircraft, vehicles not owned or operated by a resident, vandalism or malicious mischief, and theft.
Most forms pay up to 5% of the Coverage A limit for this coverage. However, the HO-4 and HO-6 provide up to 10% of the Coverage C limit. This limit is provided as an additional amount of insurance and has a sublimit of no more than $500 for loss to any one tree, shrub, or plant.
A loss from a windstorm, hail, or the weight of snow, ice, or sleet is not covered by this Additional Coverage.
Under the Trees, Shrubs, and Other Plants Additional Coverage, the policy will pay up to what amount for any one tree, shrub, or plant?
$500
Fire Department Service Charge
If the insured is liable for service charges payable to another district’s fire department when it responds to protect the insured property from an insured peril, this Additional Coverage will pay up to $500 without a deductible.
Property Removed
Property Removed
If the insured removes covered property from the premises because it is endangered by a covered peril, this coverage will insure against damage to that property for 30 days on an open perils basis. For the purposes of this Additional Coverage, open perils means loss by any cause, with no applicable exclusions. This coverage does not change the limit of insurance that applies to the property being removed.
Credit Cards, Electronic Fund Transfer Card or Access Device, Forgery, and Counterfeit Money
This Additional Coverage will pay up to $500 of additional insurance, without being subject to a deductible, for:
The legal obligation of an insured to pay because of theft or unauthorized use of credit cards
Loss resulting from theft or unauthorized use of an insured’s fund transfer card
Loss to an insured caused by forgery or alteration of a check or negotiable instrument
Loss to an insured caused by good-faith acceptance of counterfeit United States or Canadian currency
Coverage does not apply to the use of a credit card, transfer card, or access device by a resident of the household, by someone entrusted with the card or device, or for business purposes. The insurer may investigate and settle any claim, and it has a duty to defend the insured at the insurer’s expense.
Loss Assessment
If a property owner is part of a corporation or association of property owners, there may be property owned by all of the association’s members, meaning all members are partially liable for covering costs in the event of a loss to the commonly owned property. A property owner’s share of that loss is known as loss assessment. The Loss Assessment Additional Coverage provides up to $1,000 for the named insured’s share of the losses charged by their corporation or association for direct loss to collectively owned property by a peril insured against by the policy. This amount is additional insurance.
Assessments charged against the insured by a governmental body are excluded from coverage.
Glass or Safety Glazing Material
This Additional Coverage provides coverage for:
The breakage of glass or safety glazing material that is part of a covered building, storm door, or storm window, including loss caused by earth movement
Direct physical loss to covered property caused solely by the pieces, fragments, or splinters of broken glass or safety glazing material
Other than losses resulting from earth movement, coverage is not provided if the dwelling was vacant for more than 60 consecutive days immediately before the loss.
This coverage is included in the limit of insurance applicable to the damaged property.
Coverage for the breakage of glass or safety glazing material is not provided if the dwelling was vacant for more than how many consecutive days immediately before the loss?
60
Collapse
Coverage is provided for the abrupt falling down or caving in of a building, or a portion of the building, that renders the building unfit for its intended use. In order to be covered, a direct loss to covered property that involves collapse must be caused by any of the following perils:
A peril insured against—usually this refers to the Broad Form named perils, though the HO–5 will refer to the open perils coverage provided by Coverages A and B
Hidden decay
Hidden insect and vermin damage
Weight of contents, animals, people, or equipment
The weight of rain collected on a roof
The use of defective material or methods of construction
Coverage is not provided for the collapse of awnings, fences, patios, septic tanks, swimming pools, foundations, or similar items except when the collapse is a direct result of a building collapse.
This coverage is included in the limit of insurance applicable to the damaged property.
Ordinance or Law
Coverage is provided for increased costs the insured incurs due to the enforcement of any ordinance or law that requires or regulates:
Construction, demolition, remodeling, renovation, or repair of that part of a covered building damaged by an insured peril
The demolition or reconstruction of the undamaged part of a covered building, when that building must be totally demolished because of damage by an insured peril to another part of that covered building
The remodeling, removal, or replacement of the portion of the undamaged part of a covered building to complete the remodeling, repair, or replacement to that part of the covered building damaged by an insured peril
Coverage does not include loss of value to a covered structure or costs to respond to pollutants.
Most forms will allow the insured to use up to 10% of the Coverage A limit for this Additional Coverage. Because the HO–4 does not have Coverage A, the insured may use up to 10% of the limit applying to the Building Additions and Alterations Additional Coverage. This coverage is additional insurance.
