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General Nature of Homeowners Program

Section I: Property

Section II:Liability

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Homeowners Forms

Five standard forms in most jurisdictions

HO 00 02 Broad

HO 00 03 Special Form

HO 00 04 Tenants Broad Form

HO 00 06 Condominium Unit Owners Form

HO 00 08 Modified Coverage Form

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Homeowners Section I Coverages

Coverage A Dwelling

Coverage B Other structures

Coverage C Personal property

Coverage D Loss of use

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Table 23.1Homeowners Forms

A: Dwelling $15,000 min. $20,000 min. Not covered $1,000 $15,000 min.B: Other Structures 10% of A 10% of A Not covered Part of A 10% of AC: Personal Property 50% of A 50% of A $6,000 min. $6,000 min. 50% of AD: Indirect Loss 20% of A 20% of A 20% of C 40% of C 10% of A

Fire Open Peril Same perils Same perils FireLightning coverage as Form 2 as Form 2 LightningWindstorm on Dwelling WindstormHail HailExplosion ExplosionRiot, Civil Same Perils Riot, Civil Commotion as Form 2 CommotionAircraft on personal AircraftVehicles property VehiclesSmoke SmokeVandalism VandalismTheft TheftGlass Breakage VolcanicFalling Objects eruptionWeight of Ice, snow or sleetDischarge or overflow of water or steamTearing apart, cracking, burning, or bulgingFreezing of plumbing, heating, etc. systemsDamage from artificial electric currentVolcanic eruption

Coverage HO 00 02 HO 00 03 HO 00 04 HO 00 06 HO 00 08

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Homeowners - Perils Insured

HO-2, 4, 6 HO-3

Dwelling Named Perils Open Peril

Other Structures Named Perils Open Peril

Personal Property Named Perils Named Perils

Loss of Use Named Perils Named Perils

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Homeowners - Perils Insured

The following named perils apply to • all property under forms HO-2, 4, and 6• personal property under form HO-3:

1. Fire or lightning2. Windstorm or hail3. Explosion4. Riot or civil commotion5. Aircraft6. Vehicles7. Smoke8. Vandalism or malicious mischief

(more)

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Homeowners - Perils Insured

9. Theft

10. Falling objects

11. Weight of ice, snow or sleet

12. Accidental discharge or overflow of water

13. Sudden and accidental damage to steam or water heating system

14. Freezing of plumbing

15. Damage from artificially generated electricity

16. Volcanic eruption

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Coverage on Dwelling and Other Structures

1. Dwelling shown in declarations and additions attached

2. Materials and supplies located on or next to dwelling used for construction, alteration or repair

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Replacement Cost Coverage

1. If the amount of insurance on the dwelling (or other structure) at the time of loss is at least 80% of the replacement cost of the structure, the loss will be paid without a deduction for depreciation.

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Replacement Cost Coverage

2. If the amount of insurance is less than 80% of replacement cost, payment will be made for the larger of two amounts:

• the actual cash value of the loss

• the portion of the replacement cost of the loss that the amount of insurance bears to 80% of the replacement cost value of the structure

Payment will be made according to the following formula:

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Replacement Cost Coverage

Insurance Carried on Building

Replacement Cost of Building X .80X Loss

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Coverage on Personal Property

1. Covers personal property owned or used by any insured anywhere in the world.

2. At insured’s request, covers property of others on part of residence premises occupied by insured.

3. At insured’s request, covers property of residence employee or guest in any residence occupied by insured.

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Property Excluded Under Contents

1. Items separately insured 2. Animals, birds, fish 3. Motorized vehicles & accessories in or on an auto 4. Tape players, etc. for autos 5. Aircraft and their parts 6. Property of roomers 7. Property in apartment rented or held for rental to

others 8. Rental property away from premises 9. Business records, books of account, etc.10. Credit cards or fund transfer cards

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Contents Dollar Limits

$200 on money$1,000 on valuable papers$1,000 on watercraft (and their trailers)$1,000 on other trailers$1,000 on jewelry or furs for theft$2,500 on silverware for theft$2,000 on guns for theft$2,500 on business property on premises $250 on business property off premises$1,000 electronic equipment while in an auto$1,000 electronic equipment used for business

off premises

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Loss of Use Coverage

Applies when an insured peril makes residence premises not fit to live in:

1. Additional Living Expense

2. Fair Rental Value

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Additional Living Expense

1. Applies to portion of dwelling occupied by insured.

2. Pays for necessary increase in cost to continue as nearly as practicable normal standard of living.

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Fair Rental Value

1. Applies to portion of dwelling rented or held for rental.

2. Pays amount for which property could have been rented less expenses that do not continue.

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HO Section I Additional Coverages

1. Debris Removal 2. Reasonable Repairs 3. Trees, Shrubs, Plants 4. Fire Department Service Charge 5. Property Removed 6. Credit Card, Forgery and Counterfeit Money 7. Loss Assessment Coverage 8. Collapse 9. Building Additions and Alterations (HO-4)10. Ordinance or Law Coverage

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Collapse

a. perils insured against in Coverage C

b. hidden decay

c. hidden insect or vermin damage

d. weight of contents, equipment, animals, or people

e. weight of rain on a roof

f. defects in material or methods used in construction, remodeling or renovation if the collapse occurs during the course of construction, remodeling or renovation.

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Section I General Provisions

1. Insurable interest and limit of liability

insurer will not be liable for more than the interest of the insured

or

the limit of liability.

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Section I General Provisions

2. Duties in event of loss• notify insurer of loss• notify police in case of theft• notify credit card company• protect property form further damage;

make reasonable repairs• prepare inventory of damaged property• if insurer requires, show damaged property• provide records, submit to examination• send insurer sworn proof of loss within 60

days of request

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Section I General Provisions

3. Loss Settlement

a. ACV on personal property

b. building at replacement cost

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Section I General Provisions

4. Pair and set clause (proportionate share of total value)

5. Glass replacement (safety glazing materials)

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Section I General Provisions

6. Appraisal

a. either party may request appraisal when they disagree as to the amount of loss.

b. each party selects an appraiser.

c. appraisers select an umpire.

d. if appraisers cannot agree, they submit their differences to the umpire.

e. an agreement by any two of the three is binding.

f. each party pays own appraiser and split cost of the umpire.

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Section I General Provisions

7. Other insurance

8. Suit against us

9. Our option (pay in cash, repair, or replace)

10. Loss payment (within 30 days after agreement on account)

11. Abandonment

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Section I General Provisions

12. Mortgage Clause

Mortgagee’s Rights

• to receive payment for loss to the extent of its interest in the property, regardless of any fault of the property owner under the contract

• to receive separate written notice of cancellation

• to sue under the policy in its own name

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Section I General Provisions

12. Mortgage ClauseMortgagor’s Obligations (conditional)

• to notify the insurer of any change in ownership, occupancy, or substantial change in risk of which mortgagee is aware

• to render proof of loss if the insured fails to do so

• to surrender to insurer any claim against the mortgagor to the extent it receives payment when the insurer has ruled that no coverage exists for the owner.

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Section I General Provisions

13. No benefit to bailee

14. Nuclear hazard clause

15. Recovered property

16. Volcanic eruption period

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Homeowners General Conditions Applicable to Section I & II

1. Policy Period (12:01 a.m.)

2. Concealment or fraud

3. Liberalization clause

4. Waiver or change of policy provisions

5. Cancellation (limited right of company)

6. Nonrenewal

7. Assignment

8. Subrogation

9. Death of insured