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I N S U R A N C EC O M P A N Y

ARIZONA

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Homeowners Continuous Protection Plan

300 W. Clarendon Ave. Suite 405 • Phoenix, Arizona 85013

A CAPITAL STOCK COMPANY

HOMEOWNERS POLICY

HO-3 08/2016

SPECIAL FORM

Form 438BFUNS(Rev. May 1, 1942)x

LENDERS LOSS PAYABLE ENDORSEMENTS.F. FORM

Loss or damage, if any, under this policy shall be paid to the Payee named on the fi rst page of this policy, its successors and assigns, hereinafter referred to as the “Lender,” in whatever form or capacity its interests may appear and whether said interest be vested in said Lender in its individual or in its disclosed or undisclosed fi duciary or representative capacity, or otherwise, or vested in a nominee or trustee of said Lender.The insurance under this policy, or any rider or endorsement attached thereto, as to the interest only of the Lender, its successors and assigns, shall not be invalidated nor suspended: (a) by any error, omission, or change respecting the ownership, description, possession, or location of the subject of the insurance or the • interest therein, or the title thereto; (b) by the commencement of foreclosure proceedings or the giving of notice of sale of any of the property covered by this policy by virtue of any mortgage or trust deed; (c) by any breach of warranty, act, omission, neglect, or non-compliance with any of the provisions of this policy, including any and all riders now or hereafter attached thereto, by the named insured, the borrower, mortgagor, truster, vendee, owner, tenant, warehouseman, custodian, occupant, or by the agents of either or any of them or by the happening of any event permitted by them or either of them, or their agents, or which they failed to prevent, whether occurring before or after the attachment of this endorsement, or whether before or after a loss, which under the provisions of this policy of insurance or of any rider or endorsement attached thereto would invalidate or suspend the insurance as to the named insured, excluding herefrom, however, any acts or omissions of the Lender while exercising active control and management of the property.In the event of failure of the insured to pay any premium or additional premium which shalt be or become due under the terms of this policy or on account of any change in occupancy or increase in hazard not permitted by this policy, this Company agrees to give written notice to the Lender of such non-payment of premium after sixty (60) days from and within one hundred and twenty (120) days after due date of such premium and it is a condition of the continuance of the rights of the Lender hereunder that the Lender when so notifi ed in writing by this Company of the failure of the insured to pay such premium shall pay or cause to be paid the premium due within ten (10) days following receipt of the Company’s demand in writing therefor. If the Lender shall decline to pay said premium or additional premium, the rights of the Lender under this Lender’s Loss Payable Endorsement shall not be terminated before ten (10) days after receipt of said written notice by the Lender.Whenever this Company shall pay to the Lender any sum for loss or damage under this policy and shalt claim that as to the insured no liability therefor exists, this Company, at its option, may pay to the Lender the whole principal sum and interest and other indebtedness due or to become due from the insured, whether secured or unsecured, (with refund of all interest not accrued), and this Company, to the extent of such payment, shall thereupon receive a full assignment and transfer, without recourse, of the debt and all rights and securities held as collateral thereto.If there be any other insurance upon the within described property, this Company shall be liable under this policy as to the Lender for the proportion of such loss or damage that the sum hereby insured bears to the entire insurance of similar character on said property under policies held by, payable to and expressly consented to by the Lender. Any Contribution Clause included in any Fallen Building Clause Waiver or any Extended Coverage Endorsement attached to this contract of insurance is hereby nullifi ed, and also any Contribution Clause in any other endorsement or rider attached to this contract of insurance is hereby nullifi ed except Contribution Clauses for the compliance with which the insured has received reduction in the rate charged or has received extension of the coverage to include hazards other than fi re and compliance with such Contribution Clause is made a part of the consideration for insuring such other hazards. The Lender upon the payment to it of the full amount of its claim, will subrogate this Company (pro rata with all other insurers contributing to said payment) to all of the Lender’s rights of contribution under said other insurance.This Company reserves the right to cancel this policy at any time, as provided by its terms, but in such case this policy shalt continue in force for the benefi t of the Lender for ten (10) days after written notice of such cancellation is received by the Lender and shall then cease.This policy shalt remain in full force and effect as to the interest of the Lender for a period of ten (10) days after its expiration unless an acceptable policy in renewal thereof with loss thereunder payable to the Lender in accordance with the terms of this Lender’s Loss Payable Endorsement, shall have been issued by some insurance company and accepted by the Lender.Should legal title to and benefi cial ownership of any of the property covered under this policy become vested in the Lender or its agents, insurance under this policy shall continue for the term thereof for the benefi t of the Lender but, in such event, any privileges granted by this Lender’s Loss Payable Endorsement which are not also granted the insured under the terms and conditions of this policy and/or under other riders or endorsements attached thereto shall not apply to the insurance hereunder as respects such property.All notices herein provided to be given by the Company to the Lender in connection with this policy and this Lender’s Loss Payable Endorsement shall be mailed to or delivered to the Lender at its offi ce or branch described on the fi rst page of the policy.

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Approved- Board of Fire Underwriters of the Pacifi c, California Bankers’ Association, Committee on Insurance.

CONTINUOUS POLICY ENDORSEMENT(Applicable to all policies where Term is Continuous)

With respect to a Mortgagee (or Trustee) declared under this policy, this policy will be renewed and remain in effect continuously until the Mortgagee (or Trustee) is given at least 10 days notice in writing of the termination of this policy.

HOMEOWNERSHO 00 03 10 00

HO 00 03 10 00 Copyright, Insurance Services Office, Inc., 1999 Page 1 of 22

HOMEOWNERS 3 – SPECIAL FORMAGREEMENTWe will provide the insurance described in this policyin return for the premium and compliance with allapplicable provisions of this policy.

DEFINITIONSA. In this policy, "you" and "your" refer to the "named

insured" shown in the Declarations and the spouseif a resident of the same household. "We", "us"and "our" refer to the Company providing this in-surance.

B. In addition, certain words and phrases are definedas follows:1. "Aircraft Liability", "Hovercraft Liability", "Motor

Vehicle Liability" and "Watercraft Liability",subject to the provisions in b. below, mean thefollowing:a. Liability for "bodily injury" or "property dam-

age" arising out of the:(1) Ownership of such vehicle or craft by an

"insured";(2) Maintenance, occupancy, operation,

use, loading or unloading of such vehi-cle or craft by any person;

(3) Entrustment of such vehicle or craft byan "insured" to any person;

(4) Failure to supervise or negligent super-vision of any person involving such ve-hicle or craft by an "insured"; or

(5) Vicarious liability, whether or not im-posed by law, for the actions of a childor minor involving such vehicle or craft.

b. For the purpose of this definition:(1) Aircraft means any contrivance used or

designed for flight except model orhobby aircraft not used or designed tocarry people or cargo;

(2) Hovercraft means a self-propelled mo-torized ground effect vehicle and in-cludes, but is not limited to, flarecraftand air cushion vehicles;

(3) Watercraft means a craft principallydesigned to be propelled on or in waterby wind, engine power or electric motor;and

(4) Motor vehicle means a "motor vehicle"as defined in 7. below.

2. "Bodily injury" means bodily harm, sickness ordisease, including required care, loss of serv-ices and death that results.

3. "Business" means:a. A trade, profession or occupation engaged

in on a full-time, part-time or occasional ba-sis; or

b. Any other activity engaged in for money orother compensation, except the following:

(1) One or more activities, not described in(2) through (4) below, for which no "in-sured" receives more than $2,000 intotal compensation for the 12 monthsbefore the beginning of the policy pe-riod;

(2) Volunteer activities for which no moneyis received other than payment for ex-penses incurred to perform the activity;

(3) Providing home day care services forwhich no compensation is received,other than the mutual exchange of suchservices; or

(4) The rendering of home day care serv-ices to a relative of an "insured".

4. "Employee" means an employee of an "in-sured", or an employee leased to an "insured"by a labor leasing firm under an agreementbetween an "insured" and the labor leasingfirm, whose duties are other than those per-formed by a "residence employee".

5. "Insured" means:a. You and residents of your household who

are:(1) Your relatives; or(2) Other persons under the age of 21 and

in the care of any person named above;b. A student enrolled in school full time, as

defined by the school, who was a residentof your household before moving out to at-tend school, provided the student is underthe age of:

(1) 24 and your relative; or(2) 21 and in your care or the care of a

person described in a.(1) above; or

of 22 Copyright, Insurance Services Office, Inc., 1999 HO 00 03 10 00

c. Under Section II:(1) With respect to animals or watercraft to

which this policy applies, any person ororganization legally responsible forthese animals or watercraft which areowned by you or any person included ina. or b. above. "Insured" does not meana person or organization using or havingcustody of these animals or watercraft inthe course of any "business" or withoutconsent of the owner; or

(2) With respect to a "motor vehicle" towhich this policy applies:

(a) Persons while engaged in your em-ploy or that of any person included ina. or b. above; or

(b) Other persons using the vehicle onan "insured location" with your con-sent.

Under both Sections I and II, when the word animmediately precedes the word "insured", thewords an "insured" together mean one or more"insureds".

6. "Insured location" means:a. The "residence premises";b. The part of other premises, other structures

and grounds used by you as a residence;and

(1) Which is shown in the Declarations; or(2) Which is acquired by you during the

policy period for your use as a resi-dence;

c. Any premises used by you in connectionwith a premises described in a. and b.above;

d. Any part of a premises:(1) Not owned by an "insured"; and(2) Where an "insured" is temporarily re-

siding;e. Vacant land, other than farm land, owned

by or rented to an "insured";f. Land owned by or rented to an "insured" on

which a one, two, three or four familydwelling is being built as a residence for an"insured";

g. Individual or family cemetery plots or burialvaults of an "insured"; or

h. Any part of a premises occasionally rentedto an "insured" for other than "business"use.

7. "Motor vehicle" means:a. A self-propelled land or amphibious vehicle;

orb. Any trailer or semitrailer which is being

carried on, towed by or hitched for towingby a vehicle described in a. above.

8. "Occurrence" means an accident, includingcontinuous or repeated exposure to substan-tially the same general harmful conditions,which results, during the policy period, in:a. "Bodily injury"; orb. "Property damage".

9. "Property damage" means physical injury to,destruction of, or loss of use of tangible prop-erty.

10. "Residence employee" means:a. An employee of an "insured", or an em-

ployee leased to an "insured" by a laborleasing firm, under an agreement betweenan "insured" and the labor leasing firm,whose duties are related to the mainte-nance or use of the "residence premises",including household or domestic services;or

b. One who performs similar duties elsewherenot related to the "business" of an "in-sured".

A "residence employee" does not include atemporary employee who is furnished to an"insured" to substitute for a permanent "resi-dence employee" on leave or to meet seasonalor short-term workload conditions.

11. "Residence premises" means:a. The one family dwelling where you reside;b. The two, three or four family dwelling where

you reside in at least one of the family units;or

c. That part of any other building where youreside;

and which is shown as the "residence prem-ises" in the Declarations."Residence premises" also includes otherstructures and grounds at that location.


DEDUCTIBLEUnless otherwise noted in this policy, the followingdeductible provision applies:Subject to the policy limits that apply, we will pay onlythat part of the total of all loss payable under Section Ithat exceeds the deductible amount shown in theDeclarations.

SECTION I – PROPERTY COVERAGESA. Coverage A – Dwelling

1. We cover:a. The dwelling on the "residence premises"

shown in the Declarations, including struc-tures attached to the dwelling; and

b. Materials and supplies located on or next tothe "residence premises" used to construct,alter or repair the dwelling or other struc-tures on the "residence premises".

2. We do not cover land, including land on whichthe dwelling is located.

B. Coverage B – Other Structures1. We cover other structures on the "residence

premises" set apart from the dwelling by clearspace. This includes structures connected tothe dwelling by only a fence, utility line, orsimilar connection.

2. We do not cover:a. Land, including land on which the other

structures are located;b. Other structures rented or held for rental to

any person not a tenant of the dwelling,unless used solely as a private garage;

c. Other structures from which any "business"is conducted; or

d. Other structures used to store "business"property. However, we do cover a structurethat contains "business" property solelyowned by an "insured" or a tenant of thedwelling provided that "business" propertydoes not include gaseous or liquid fuel,other than fuel in a permanently installedfuel tank of a vehicle or craft parked orstored in the structure.

3. The limit of liability for this coverage will not bemore than 10% of the limit of liability that ap-plies to Coverage A. Use of this coverage doesnot reduce the Coverage A limit of liability.

C. Coverage C – Personal Property1. Covered Property

We cover personal property owned or used byan "insured" while it is anywhere in the world.After a loss and at your request, we will coverpersonal property owned by:a. Others while the property is on the part of

the "residence premises" occupied by an"insured"; or

b. A guest or a "residence employee", whilethe property is in any residence occupied byan "insured".

2. Limit For Property At Other ResidencesOur limit of liability for personal property usuallylocated at an "insured's" residence, other thanthe "residence premises", is 10% of the limit ofliability for Coverage C, or $1,000, whichever isgreater. However, this limitation does not applyto personal property:a. Moved from the "residence premises" be-

cause it is being repaired, renovated or re-built and is not fit to live in or store propertyin; or

b. In a newly acquired principal residence for30 days from the time you begin to movethe property there.

3. Special Limits Of LiabilityThe special limit for each category shown be-low is the total limit for each loss for all prop-erty in that category. These special limits donot increase the Coverage C limit of liability.a. $200 on money, bank notes, bullion, gold

other than goldware, silver other than sil-verware, platinum other than platinumware,coins, medals, scrip, stored value cardsand smart cards.

b. $1,500 on securities, accounts, deeds,evidences of debt, letters of credit, notesother than bank notes, manuscripts, per-sonal records, passports, tickets andstamps. This dollar limit applies to thesecategories regardless of the medium (suchas paper or computer software) on whichthe material exists.This limit includes the cost to research, re-place or restore the information from thelost or damaged material.


c. $1,500 on watercraft of all types, includingtheir trailers, furnishings, equipment andoutboard engines or motors.

d. $1,500 on trailers or semitrailers not usedwith watercraft of all types.

e. $1,500 for loss by theft of jewelry, watches,furs, precious and semiprecious stones.

f. $2,500 for loss by theft of firearms andrelated equipment.

g. $2,500 for loss by theft of silverware, silver-plated ware, goldware, gold-plated ware,platinumware, platinum-plated ware andpewterware. This includes flatware, hollow-ware, tea sets, trays and trophies made ofor including silver, gold or pewter.

h. $2,500 on property, on the "residencepremises", used primarily for "business"purposes.

i. $500 on property, away from the "residencepremises", used primarily for "business"purposes. However, this limit does not ap-ply to loss to electronic apparatus and otherproperty described in Categories j. and k.below.

j. $1,500 on electronic apparatus and acces-sories, while in or upon a "motor vehicle",but only if the apparatus is equipped to beoperated by power from the "motor vehi-cle's" electrical system while still capable ofbeing operated by other power sources.Accessories include antennas, tapes, wires,records, discs or other media that can beused with any apparatus described in thisCategory j.

k. $1,500 on electronic apparatus and acces-sories used primarily for "business" whileaway from the "residence premises" andnot in or upon a "motor vehicle". The appa-ratus must be equipped to be operated bypower from the "motor vehicle's" electricalsystem while still capable of being operatedby other power sources.Accessories include antennas, tapes, wires,records, discs or other media that can beused with any apparatus described in thisCategory k.

4. Property Not CoveredWe do not cover:a. Articles separately described and specifi-

cally insured, regardless of the limit forwhich they are insured, in this or other in-surance;

b. Animals, birds or fish;c. "Motor vehicles".

(1) This includes:(a) Their accessories, equipment and

parts; or(b) Electronic apparatus and accesso-

ries designed to be operated solelyby power from the electrical systemof the "motor vehicle". Accessoriesinclude antennas, tapes, wires, rec-ords, discs or other media that canbe used with any apparatus de-scribed above.

The exclusion of property described in(a) and (b) above applies only whilesuch property is in or upon the "motorvehicle".

(2) We do cover "motor vehicles" not re-quired to be registered for use on publicroads or property which are:

(a) Used solely to service an "insured's"residence; or

(b) Designed to assist the handicapped;d. Aircraft meaning any contrivance used or

designed for flight including any partswhether or not attached to the aircraft.We do cover model or hobby aircraft notused or designed to carry people or cargo;

e. Hovercraft and parts. Hovercraft means aself-propelled motorized ground effect vehi-cle and includes, but is not limited to, flare-craft and air cushion vehicles;

f. Property of roomers, boarders and othertenants, except property of roomers andboarders related to an "insured";

g. Property in an apartment regularly rented orheld for rental to others by an "insured", ex-cept as provided in E.10. Landlord's Fur-nishings under Section I – Property Cover-ages;

h. Property rented or held for rental to othersoff the "residence premises";

i. "Business" data, including such data storedin:

(1) Books of account, drawings or otherpaper records; or

(2) Computers and related equipment.We do cover the cost of blank recording orstorage media, and of prerecorded com-puter programs available on the retail mar-ket;


j. Credit cards, electronic fund transfer cardsor access devices used solely for deposit,withdrawal or transfer of funds except asprovided in E.6. Credit Card, ElectronicFund Transfer Card Or Access Device,Forgery And Counterfeit Money under Sec-tion I – Property Coverages; or

k. Water or steam.D. Coverage D – Loss Of Use

The limit of liability for Coverage D is the total limitfor the coverages in 1. Additional Living Expense,2. Fair Rental Value and 3. Civil Authority ProhibitsUse below.1. Additional Living Expense

If a loss covered under Section I makes thatpart of the "residence premises" where you re-side not fit to live in, we cover any necessaryincrease in living expenses incurred by you sothat your household can maintain its normalstandard of living.Payment will be for the shortest time requiredto repair or replace the damage or, if you per-manently relocate, the shortest time requiredfor your household to settle elsewhere.

2. Fair Rental ValueIf a loss covered under Section I makes thatpart of the "residence premises" rented to oth-ers or held for rental by you not fit to live in, wecover the fair rental value of such premisesless any expenses that do not continue while itis not fit to live in.Payment will be for the shortest time requiredto repair or replace such premises.

3. Civil Authority Prohibits UseIf a civil authority prohibits you from use of the"residence premises" as a result of direct dam-age to neighboring premises by a Peril InsuredAgainst, we cover the loss as provided in 1.Additional Living Expense and 2. Fair RentalValue above for no more than two weeks.

4. Loss Or Expense Not CoveredWe do not cover loss or expense due to can-cellation of a lease or agreement.

The periods of time under 1. Additional Living Ex-pense, 2. Fair Rental Value and 3. Civil AuthorityProhibits Use above are not limited by expirationof this policy.

E. Additional Coverages1. Debris Removal

a. We will pay your reasonable expense forthe removal of:

(1) Debris of covered property if a PerilInsured Against that applies to the dam-aged property causes the loss; or

(2) Ash, dust or particles from a volcaniceruption that has caused direct loss to abuilding or property contained in abuilding.

This expense is included in the limit of li-ability that applies to the damaged property.If the amount to be paid for the actual dam-age to the property plus the debris removalexpense is more than the limit of liability forthe damaged property, an additional 5% ofthat limit is available for such expense.

b. We will also pay your reasonable expense,up to $1,000, for the removal from the"residence premises" of:

(1) Your tree(s) felled by the peril of Wind-storm or Hail or Weight of Ice, Snow orSleet; or

(2) A neighbor's tree(s) felled by a PerilInsured Against under Coverage C;

provided the tree(s):(3) Damage(s) a covered structure; or(4) Does not damage a covered structure,

but:(a) Block(s) a driveway on the "resi-

dence premises" which prevent(s) a"motor vehicle", that is registered foruse on public roads or property, fromentering or leaving the "residencepremises"; or

(b) Block(s) a ramp or other fixturedesigned to assist a handicappedperson to enter or leave the dwellingbuilding.

The $1,000 limit is the most we will pay inany one loss regardless of the number offallen trees. No more than $500 of this limitwill be paid for the removal of any one tree.This coverage is additional insurance.

2. Reasonable Repairsa. We will pay the reasonable cost incurred by

you for the necessary measures takensolely to protect covered property that isdamaged by a Peril Insured Against fromfurther damage.


b. If the measures taken involve repair toother damaged property, we will only pay ifthat property is covered under this policyand the damage is caused by a Peril In-sured Against. This coverage does not:

(1) Increase the limit of liability that appliesto the covered property; or

(2) Relieve you of your duties, in case of aloss to covered property, described inB.4. under Section I – Conditions.

3. Trees, Shrubs And Other PlantsWe cover trees, shrubs, plants or lawns, on the"residence premises", for loss caused by thefollowing Perils Insured Against:a. Fire or Lightning;b. Explosion;c. Riot or Civil Commotion;d. Aircraft;e. Vehicles not owned or operated by a resi-

dent of the "residence premises";f. Vandalism or Malicious Mischief; org. Theft.We will pay up to 5% of the limit of liability thatapplies to the dwelling for all trees, shrubs,plants or lawns. No more than $500 of this limitwill be paid for any one tree, shrub or plant. Wedo not cover property grown for "business"purposes.This coverage is additional insurance.

4. Fire Department Service ChargeWe will pay up to $500 for your liability as-sumed by contract or agreement for fire de-partment charges incurred when the fire de-partment is called to save or protect coveredproperty from a Peril Insured Against. We donot cover fire department service charges if theproperty is located within the limits of the city,municipality or protection district furnishing thefire department response.This coverage is additional insurance. No de-ductible applies to this coverage.

5. Property RemovedWe insure covered property against direct lossfrom any cause while being removed from apremises endangered by a Peril InsuredAgainst and for no more than 30 days whileremoved.This coverage does not change the limit of li-ability that applies to the property being re-moved.

6. Credit Card, Electronic Fund Transfer CardOr Access Device, Forgery And CounterfeitMoneya. We will pay up to $500 for:

(1) The legal obligation of an "insured" topay because of the theft or unauthorizeduse of credit cards issued to or regis-tered in an "insured's" name;

(2) Loss resulting from theft or unauthorizeduse of an electronic fund transfer cardor access device used for deposit, with-drawal or transfer of funds, issued to orregistered in an "insured's" name;

(3) Loss to an "insured" caused by forgeryor alteration of any check or negotiableinstrument; and

(4) Loss to an "insured" through acceptancein good faith of counterfeit United Statesor Canadian paper currency.

All loss resulting from a series of actscommitted by any one person or in whichany one person is concerned or implicatedis considered to be one loss.This coverage is additional insurance. Nodeductible applies to this coverage.

b. We do not cover:(1) Use of a credit card, electronic fund

transfer card or access device:(a) By a resident of your household;(b) By a person who has been entrusted

with either type of card or accessdevice; or

(c) If an "insured" has not complied withall terms and conditions under whichthe cards are issued or the devicesaccessed; or

(2) Loss arising out of "business" use ordishonesty of an "insured".

c. If the coverage in a. above applies, thefollowing defense provisions also apply:

(1) We may investigate and settle any claimor suit that we decide is appropriate.Our duty to defend a claim or suit endswhen the amount we pay for the lossequals our limit of liability.

(2) If a suit is brought against an "insured"for liability under a.(1) or (2) above, wewill provide a defense at our expense bycounsel of our choice.

(3) We have the option to defend at ourexpense an "insured" or an "insured's"bank against any suit for the enforce-ment of payment under a.(3) above.


7. Loss Assessmenta. We will pay up to $1,000 for your share of

loss assessment charged during the policyperiod against you, as owner or tenant ofthe "residence premises", by a corporationor association of property owners. The as-sessment must be made as a result of di-rect loss to property, owned by all memberscollectively, of the type that would be cov-ered by this policy if owned by you, causedby a Peril Insured Against under CoverageA, other than:

(1) Earthquake; or(2) Land shock waves or tremors before,

during or after a volcanic eruption.The limit of $1,000 is the most we will paywith respect to any one loss, regardless ofthe number of assessments. We will onlyapply one deductible, per unit, to the totalamount of any one loss to the property de-scribed above, regardless of the number ofassessments.

b. We do not cover assessments chargedagainst you or a corporation or associationof property owners by any governmentalbody.

c. Paragraph P. Policy Period under Section I– Conditions does not apply to this cover-age.

This coverage is additional insurance.8. Collapse

a. With respect to this Additional Coverage:(1) Collapse means an abrupt falling down

or caving in of a building or any part of abuilding with the result that the buildingor part of the building cannot be occu-pied for its current intended purpose.

(2) A building or any part of a building thatis in danger of falling down or caving inis not considered to be in a state of col-lapse.

(3) A part of a building that is standing isnot considered to be in a state of col-lapse even if it has separated from an-other part of the building.

(4) A building or any part of a building thatis standing is not considered to be in astate of collapse even if it shows evi-dence of cracking, bulging, sagging,bending, leaning, settling, shrinkage orexpansion.

b. We insure for direct physical loss to cov-ered property involving collapse of a build-ing or any part of a building if the collapsewas caused by one or more of the follow-ing:

(1) The Perils Insured Against named underCoverage C;

(2) Decay that is hidden from view, unlessthe presence of such decay is known toan "insured" prior to collapse;

(3) Insect or vermin damage that is hiddenfrom view, unless the presence of suchdamage is known to an "insured" prior tocollapse;

(4) Weight of contents, equipment, animalsor people;

(5) Weight of rain which collects on a roof;or

(6) Use of defective material or methods inconstruction, remodeling or renovation ifthe collapse occurs during the course ofthe construction, remodeling or renova-tion.

c. Loss to an awning, fence, patio, deck,pavement, swimming pool, undergroundpipe, flue, drain, cesspool, septic tank,foundation, retaining wall, bulkhead, pier,wharf or dock is not included under b.(2)through (6) above, unless the loss is a di-rect result of the collapse of a building orany part of a building.

d. This coverage does not increase the limit ofliability that applies to the damaged coveredproperty.

9. Glass Or Safety Glazing Material a. We cover:

(1) The breakage of glass or safety glazingmaterial which is part of a coveredbuilding, storm door or storm window;

(2) The breakage of glass or safety glazingmaterial which is part of a coveredbuilding, storm door or storm windowwhen caused directly by earth move-ment; and

(3) The direct physical loss to coveredproperty caused solely by the pieces,fragments or splinters of broken glass orsafety glazing material which is part of abuilding, storm door or storm window.


b. This coverage does not include loss:(1) To covered property which results be-

cause the glass or safety glazing mate-rial has been broken, except as pro-vided in a.(3) above; or

(2) On the "residence premises" if thedwelling has been vacant for more than60 consecutive days immediately beforethe loss, except when the breakage re-sults directly from earth movement asprovided in a.(2) above. A dwelling be-ing constructed is not considered va-cant.

c. This coverage does not increase the limit ofliability that applies to the damaged prop-erty.

10. Landlord's FurnishingsWe will pay up to $2,500 for your appliances,carpeting and other household furnishings, ineach apartment on the "residence premises"regularly rented or held for rental to others byan "insured", for loss caused by a Peril InsuredAgainst in Coverage C, other than Theft.This limit is the most we will pay in any oneloss regardless of the number of appliances,carpeting or other household furnishings in-volved in the loss.This coverage does not increase the limit of li-ability applying to the damaged property.

11. Ordinance Or Lawa. You may use up to 10% of the limit of liabil-

ity that applies to Coverage A for the in-creased costs you incur due to the en-forcement of any ordinance or law whichrequires or regulates:

(1) The construction, demolition, remodel-ing, renovation or repair of that part of acovered building or other structuredamaged by a Peril Insured Against;

(2) The demolition and reconstruction of theundamaged part of a covered buildingor other structure, when that building orother structure must be totally demol-ished because of damage by a Peril In-sured Against to another part of thatcovered building or other structure; or

(3) The remodeling, removal or replace-ment of the portion of the undamagedpart of a covered building or otherstructure necessary to complete the re-modeling, repair or replacement of thatpart of the covered building or otherstructure damaged by a Peril InsuredAgainst.

b. You may use all or part of this ordinance orlaw coverage to pay for the increased costsyou incur to remove debris resulting fromthe construction, demolition, remodeling,renovation, repair or replacement of prop-erty as stated in a. above.

c. We do not cover:(1) The loss in value to any covered build-

ing or other structure due to the re-quirements of any ordinance or law; or

(2) The costs to comply with any ordinanceor law which requires any "insured" orothers to test for, monitor, clean up, re-move, contain, treat, detoxify or neu-tralize, or in any way respond to, or as-sess the effects of, pollutants in or onany covered building or other structure.Pollutants means any solid, liquid,gaseous or thermal irritant or contami-nant, including smoke, vapor, soot,fumes, acids, alkalis, chemicals andwaste. Waste includes materials to berecycled, reconditioned or reclaimed.

This coverage is additional insurance.12. Grave Markers

We will pay up to $5,000 for grave markers, in-cluding mausoleums, on or away from the"residence premises" for loss caused by a PerilInsured Against under Coverage C.This coverage does not increase the limits ofliability that apply to the damaged coveredproperty.

SECTION I – PERILS INSURED AGAINSTA. Coverage A – Dwelling And Coverage B –

Other Structures1. We insure against risk of direct physical loss to

property described in Coverages A and B.2. We do not insure, however, for loss:

a. Excluded under Section I – Exclusions;b. Involving collapse, except as provided in

E.8. Collapse under Section I – PropertyCoverages; or

c. Caused by:(1) Freezing of a plumbing, heating, air

conditioning or automatic fire protectivesprinkler system or of a household ap-pliance, or by discharge, leakage oroverflow from within the system or ap-pliance caused by freezing. This provi-sion does not apply if you have usedreasonable care to:

(a) Maintain heat in the building; or


(b) Shut off the water supply and drainall systems and appliances of water.

However, if the building is protected byan automatic fire protective sprinklersystem, you must use reasonable careto continue the water supply and main-tain heat in the building for coverage toapply.For purposes of this provision a plumb-ing system or household appliance doesnot include a sump, sump pump or re-lated equipment or a roof drain, gutter,downspout or similar fixtures or equip-ment;

(2) Freezing, thawing, pressure or weight ofwater or ice, whether driven by wind ornot, to a:

(a) Fence, pavement, patio or swimmingpool;

(b) Footing, foundation, bulkhead, wall,or any other structure or device thatsupports all or part of a building, orother structure;

(c) Retaining wall or bulkhead that doesnot support all or part of a building orother structure; or

(d) Pier, wharf or dock;(3) Theft in or to a dwelling under construc-

tion, or of materials and supplies for usein the construction until the dwelling isfinished and occupied;

(4) Vandalism and malicious mischief, andany ensuing loss caused by any inten-tional and wrongful act committed in thecourse of the vandalism or maliciousmischief, if the dwelling has been vacantfor more than 60 consecutive days im-mediately before the loss. A dwellingbeing constructed is not considered va-cant;

(5) Mold, fungus or wet rot. However, we doinsure for loss caused by mold, fungusor wet rot that is hidden within the wallsor ceilings or beneath the floors orabove the ceilings of a structure if suchloss results from the accidental dis-charge or overflow of water or steamfrom within:

(a) A plumbing, heating, air conditioningor automatic fire protective sprinklersystem, or a household appliance,on the "residence premises"; or

(b) A storm drain, or water, steam orsewer pipes, off the "residencepremises".

For purposes of this provision, aplumbing system or household appli-ance does not include a sump, sumppump or related equipment or a roofdrain, gutter, downspout or similar fix-tures or equipment; or

(6) Any of the following:(a) Wear and tear, marring, deteriora-

tion;(b) Mechanical breakdown, latent de-

fect, inherent vice, or any quality inproperty that causes it to damage ordestroy itself;

(c) Smog, rust or other corrosion, or dryrot;

(d) Smoke from agricultural smudging orindustrial operations;

(e) Discharge, dispersal, seepage, mi-gration, release or escape of pollut-ants unless the discharge, dispersal,seepage, migration, release or es-cape is itself caused by a Peril In-sured Against named under Cover-age C.Pollutants means any solid, liquid,gaseous or thermal irritant or con-taminant, including smoke, vapor,soot, fumes, acids, alkalis, chemi-cals and waste. Waste includesmaterials to be recycled, recondi-tioned or reclaimed;

(f) Settling, shrinking, bulging or expan-sion, including resultant cracking, ofbulkheads, pavements, patios, foot-ings, foundations, walls, floors, roofsor ceilings;

(g) Birds, vermin, rodents, or insects; or(h) Animals owned or kept by an "in-

sured".Exception To c.(6)Unless the loss is otherwise excluded, wecover loss to property covered under Cov-erage A or B resulting from an accidentaldischarge or overflow of water or steamfrom within a:(i) Storm drain, or water, steam or sewer

pipe, off the "residence premises"; or


(ii) Plumbing, heating, air conditioning orautomatic fire protective sprinkler sys-tem or household appliance on the"residence premises". This includes thecost to tear out and replace any part of abuilding, or other structure, on the "resi-dence premises", but only when neces-sary to repair the system or appliance.However, such tear out and replace-ment coverage only applies to otherstructures if the water or steam causesactual damage to a building on the"residence premises".

We do not cover loss to the system or ap-pliance from which this water or steam es-caped.For purposes of this provision, a plumbingsystem or household appliance does notinclude a sump, sump pump or relatedequipment or a roof drain, gutter, downspout or similar fixtures or equipment.

Section I – Exclusion A.3. Water Damage,Paragraphs a. and c. that apply to surfacewater and water below the surface of theground do not apply to loss by water coveredunder c.(5) and (6) above.Under 2.b. and c. above, any ensuing loss toproperty described in Coverages A and B notprecluded by any other provision in this policyis covered.

B. Coverage C – Personal PropertyWe insure for direct physical loss to the propertydescribed in Coverage C caused by any of thefollowing perils unless the loss is excluded in Sec-tion I – Exclusions.1. Fire Or Lightning2. Windstorm Or Hail

This peril includes loss to watercraft of all typesand their trailers, furnishings, equipment, andoutboard engines or motors, only while inside afully enclosed building.This peril does not include loss to the propertycontained in a building caused by rain, snow,sleet, sand or dust unless the direct force ofwind or hail damages the building causing anopening in a roof or wall and the rain, snow,sleet, sand or dust enters through this opening.

3. Explosion4. Riot Or Civil Commotion5. Aircraft

This peril includes self-propelled missiles andspacecraft.

6. Vehicles7. Smoke

This peril means sudden and accidental dam-age from smoke, including the emission orpuffback of smoke, soot, fumes or vapors froma boiler, furnace or related equipment.This peril does not include loss caused bysmoke from agricultural smudging or industrialoperations.

8. Vandalism Or Malicious Mischief9. Theft

a. This peril includes attempted theft and lossof property from a known place when it islikely that the property has been stolen.

b. This peril does not include loss caused bytheft:

(1) Committed by an "insured";(2) In or to a dwelling under construction, or

of materials and supplies for use in theconstruction until the dwelling is finishedand occupied;

(3) From that part of a "residence premises"rented by an "insured" to someone otherthan another "insured"; or

(4) That occurs off the "residence prem-ises" of:

(a) Trailers, semitrailers and campers;(b) Watercraft of all types, and their

furnishings, equipment and outboardengines or motors; or

(c) Property while at any other residenceowned by, rented to, or occupied byan "insured", except while an "in-sured" is temporarily living there.Property of an "insured" who is astudent is covered while at the resi-dence the student occupies to attendschool as long as the student hasbeen there at any time during the 60days immediately before the loss.

10. Falling ObjectsThis peril does not include loss to propertycontained in a building unless the roof or anoutside wall of the building is first damaged bya falling object. Damage to the falling object it-self is not included.

11. Weight Of Ice, Snow Or SleetThis peril means weight of ice, snow or sleetwhich causes damage to property contained ina building.


12. Accidental Discharge Or Overflow Of WaterOr Steama. This peril means accidental discharge or

overflow of water or steam from within aplumbing, heating, air conditioning or auto-matic fire protective sprinkler system orfrom within a household appliance.

b. This peril does not include loss:(1) To the system or appliance from which

the water or steam escaped;(2) Caused by or resulting from freezing

except as provided in Peril InsuredAgainst 14. Freezing;

(3) On the "residence premises" caused byaccidental discharge or overflow whichoccurs off the "residence premises"; or

(4) Caused by mold, fungus or wet rot un-less hidden within the walls or ceilingsor beneath the floors or above the ceil-ings of a structure.

c. In this peril, a plumbing system or house-hold appliance does not include a sump,sump pump or related equipment or a roofdrain, gutter, downspout or similar fixturesor equipment.

d. Section I – Exclusion A.3. Water Damage,Paragraphs a. and c. that apply to surfacewater and water below the surface of theground do not apply to loss by water cov-ered under this peril.

13. Sudden And Accidental Tearing Apart,Cracking, Burning Or BulgingThis peril means sudden and accidental tear-ing apart, cracking, burning or bulging of asteam or hot water heating system, an air con-ditioning or automatic fire protective sprinklersystem, or an appliance for heating water.We do not cover loss caused by or resultingfrom freezing under this peril.

14. Freezinga. This peril means freezing of a plumbing,

heating, air conditioning or automatic fireprotective sprinkler system or of a house-hold appliance but only if you have usedreasonable care to:

(1) Maintain heat in the building; or(2) Shut off the water supply and drain all

systems and appliances of water.However, if the building is protected by anautomatic fire protective sprinkler system,you must use reasonable care to continuethe water supply and maintain heat in thebuilding for coverage to apply.

b. In this peril, a plumbing system or house-hold appliance does not include a sump,sump pump or related equipment or a roofdrain, gutter, downspout or similar fixturesor equipment.

15. Sudden And Accidental Damage FromArtificially Generated Electrical CurrentThis peril does not include loss to tubes, tran-sistors, electronic components or circuitry thatare a part of appliances, fixtures, computers,home entertainment units or other types ofelectronic apparatus.

16. Volcanic EruptionThis peril does not include loss caused byearthquake, land shock waves or tremors.

SECTION I – EXCLUSIONSA. We do not insure for loss caused directly or indi-

rectly by any of the following. Such loss is ex-cluded regardless of any other cause or eventcontributing concurrently or in any sequence to theloss. These exclusions apply whether or not theloss event results in widespread damage or af-fects a substantial area.1. Ordinance Or Law

Ordinance Or Law means any ordinance orlaw:a. Requiring or regulating the construction,

demolition, remodeling, renovation or repairof property, including removal of any re-sulting debris. This Exclusion A.1.a. doesnot apply to the amount of coverage thatmay be provided for in E.11. Ordinance OrLaw under Section I – Property Coverages;

b. The requirements of which result in a lossin value to property; or

c. Requiring any "insured" or others to test for,monitor, clean up, remove, contain, treat,detoxify or neutralize, or in any way respondto, or assess the effects of, pollutants.Pollutants means any solid, liquid, gaseousor thermal irritant or contaminant, includingsmoke, vapor, soot, fumes, acids, alkalis,chemicals and waste. Waste includes ma-terials to be recycled, reconditioned or re-claimed.

This Exclusion A.1. applies whether or not theproperty has been physically damaged.

2. Earth MovementEarth Movement means:a. Earthquake, including land shock waves or

tremors before, during or after a volcaniceruption;


b. Landslide, mudslide or mudflow;c. Subsidence or sinkhole; ord. Any other earth movement including earth

sinking, rising or shifting;caused by or resulting from human or animalforces or any act of nature unless direct loss byfire or explosion ensues and then we will payonly for the ensuing loss.This Exclusion A.2. does not apply to loss bytheft.

3. Water DamageWater Damage means:a. Flood, surface water, waves, tidal water,

overflow of a body of water, or spray fromany of these, whether or not driven by wind;

b. Water or water-borne material which backsup through sewers or drains or which over-flows or is discharged from a sump, sumppump or related equipment; or

c. Water or water-borne material below thesurface of the ground, including waterwhich exerts pressure on or seeps or leaksthrough a building, sidewalk, driveway,foundation, swimming pool or other struc-ture;

caused by or resulting from human or animalforces or any act of nature.Direct loss by fire, explosion or theft resultingfrom water damage is covered.

4. Power FailurePower Failure means the failure of power orother utility service if the failure takes place offthe "residence premises". But if the failure re-sults in a loss, from a Peril Insured Against onthe "residence premises", we will pay for theloss caused by that peril.

5. NeglectNeglect means neglect of an "insured" to useall reasonable means to save and preserveproperty at and after the time of a loss.

6. WarWar includes the following and any conse-quence of any of the following:a. Undeclared war, civil war, insurrection,

rebellion or revolution;b. Warlike act by a military force or military

personnel; orc. Destruction, seizure or use for a military

purpose.

Discharge of a nuclear weapon will be deemeda warlike act even if accidental.

7. Nuclear HazardThis Exclusion A.7. pertains to Nuclear Hazardto the extent set forth in M. Nuclear HazardClause under Section I – Conditions.

8. Intentional LossIntentional Loss means any loss arising out ofany act an "insured" commits or conspires tocommit with the intent to cause a loss.In the event of such loss, no "insured" is enti-tled to coverage, even "insureds" who did notcommit or conspire to commit the act causingthe loss.

9. Governmental ActionGovernmental Action means the destruction,confiscation or seizure of property described inCoverage A, B or C by order of any govern-mental or public authority.This exclusion does not apply to such acts or-dered by any governmental or public authoritythat are taken at the time of a fire to prevent itsspread, if the loss caused by fire would becovered under this policy.

B. We do not insure for loss to property described inCoverages A and B caused by any of the follow-ing. However, any ensuing loss to property de-scribed in Coverages A and B not precluded byany other provision in this policy is covered.1. Weather conditions. However, this exclusion

only applies if weather conditions contribute inany way with a cause or event excluded in A.above to produce the loss.

2. Acts or decisions, including the failure to act ordecide, of any person, group, organization orgovernmental body.

3. Faulty, inadequate or defective:a. Planning, zoning, development, surveying,

siting;b. Design, specifications, workmanship, re-

pair, construction, renovation, remodeling,grading, compaction;

c. Materials used in repair, construction, reno-vation or remodeling; or

d. Maintenance;of part or all of any property whether on or offthe "residence premises".


SECTION I – CONDITIONSA. Insurable Interest And Limit Of Liability

Even if more than one person has an insurableinterest in the property covered, we will not be li-able in any one loss:1. To an "insured" for more than the amount of

such "insured's" interest at the time of loss; or2. For more than the applicable limit of liability.

B. Duties After LossIn case of a loss to covered property, we have noduty to provide coverage under this policy if thefailure to comply with the following duties is preju-dicial to us. These duties must be performed ei-ther by you, an "insured" seeking coverage, or arepresentative of either:1. Give prompt notice to us or our agent;2. Notify the police in case of loss by theft;3. Notify the credit card or electronic fund transfer

card or access device company in case of lossas provided for in E.6. Credit Card, ElectronicFund Transfer Card Or Access Device, For-gery And Counterfeit Money under Section I –Property Coverages;

4. Protect the property from further damage. Ifrepairs to the property are required, you must:a. Make reasonable and necessary repairs to

protect the property; andb. Keep an accurate record of repair ex-

penses;5. Cooperate with us in the investigation of a

claim;6. Prepare an inventory of damaged personal

property showing the quantity, description, ac-tual cash value and amount of loss. Attach allbills, receipts and related documents that jus-tify the figures in the inventory;

7. As often as we reasonably require:a. Show the damaged property;b. Provide us with records and documents we

request and permit us to make copies; andc. Submit to examination under oath, while not

in the presence of another "insured", andsign the same;

8. Send to us, within 60 days after our request,your signed, sworn proof of loss which setsforth, to the best of your knowledge and belief:a. The time and cause of loss;b. The interests of all "insureds" and all others

in the property involved and all liens on theproperty;

c. Other insurance which may cover the loss;

d. Changes in title or occupancy of the prop-erty during the term of the policy;

e. Specifications of damaged buildings anddetailed repair estimates;

f. The inventory of damaged personal prop-erty described in 6. above;

g. Receipts for additional living expensesincurred and records that support the fairrental value loss; and

h. Evidence or affidavit that supports a claimunder E.6. Credit Card, Electronic FundTransfer Card Or Access Device, ForgeryAnd Counterfeit Money under Section I –Property Coverages, stating the amountand cause of loss.

C. Loss SettlementIn this Condition C., the terms "cost to repair orreplace" and "replacement cost" do not include theincreased costs incurred to comply with the en-forcement of any ordinance or law, except to theextent that coverage for these increased costs isprovided in E.11. Ordinance Or Law under SectionI – Property Coverages. Covered property lossesare settled as follows:1. Property of the following types:

a. Personal property;b. Awnings, carpeting, household appliances,

outdoor antennas and outdoor equipment,whether or not attached to buildings;

c. Structures that are not buildings; andd. Grave markers, including mausoleums;at actual cash value at the time of loss but notmore than the amount required to repair or re-place.

2. Buildings covered under Coverage A or B atreplacement cost without deduction for depre-ciation, subject to the following:a. If, at the time of loss, the amount of insur-

ance in this policy on the damaged buildingis 80% or more of the full replacement costof the building immediately before the loss,we will pay the cost to repair or replace, af-ter application of any deductible and withoutdeduction for depreciation, but not morethan the least of the following amounts:

(1) The limit of liability under this policy thatapplies to the building;

(2) The replacement cost of that part of thebuilding damaged with material of likekind and quality and for like use; or

(3) The necessary amount actually spent torepair or replace the damaged building.


If the building is rebuilt at a new premises,the cost described in (2) above is limited tothe cost which would have been incurred ifthe building had been built at the originalpremises.

b. If, at the time of loss, the amount of insur-ance in this policy on the damaged buildingis less than 80% of the full replacementcost of the building immediately before theloss, we will pay the greater of the followingamounts, but not more than the limit of li-ability under this policy that applies to thebuilding:

(1) The actual cash value of that part of thebuilding damaged; or

(2) That proportion of the cost to repair orreplace, after application of any deducti-ble and without deduction for deprecia-tion, that part of the building damaged,which the total amount of insurance inthis policy on the damaged buildingbears to 80% of the replacement cost ofthe building.

c. To determine the amount of insurancerequired to equal 80% of the full replace-ment cost of the building immediately be-fore the loss, do not include the value of:

(1) Excavations, footings, foundations,piers, or any other structures or devicesthat support all or part of the building,which are below the undersurface of thelowest basement floor;

(2) Those supports described in (1) abovewhich are below the surface of theground inside the foundation walls, ifthere is no basement; and

(3) Underground flues, pipes, wiring anddrains.

d. We will pay no more than the actual cashvalue of the damage until actual repair orreplacement is complete. Once actual re-pair or replacement is complete, we willsettle the loss as noted in 2.a. and b.above.However, if the cost to repair or replace thedamage is both:

(1) Less than 5% of the amount of insur-ance in this policy on the building; and

(2) Less than $2,500;we will settle the loss as noted in 2.a. andb. above whether or not actual repair or re-placement is complete.

e. You may disregard the replacement costloss settlement provisions and make claimunder this policy for loss to buildings on anactual cash value basis. You may thenmake claim for any additional liability ac-cording to the provisions of this ConditionC. Loss Settlement, provided you notify usof your intent to do so within 180 days afterthe date of loss.

D. Loss To A Pair Or SetIn case of loss to a pair or set we may elect to:1. Repair or replace any part to restore the pair or

set to its value before the loss; or2. Pay the difference between actual cash value

of the property before and after the loss.E. Appraisal

If you and we fail to agree on the amount of loss,either may demand an appraisal of the loss. In thisevent, each party will choose a competent and im-partial appraiser within 20 days after receiving awritten request from the other. The two appraiserswill choose an umpire. If they cannot agree uponan umpire within 15 days, you or we may requestthat the choice be made by a judge of a court ofrecord in the state where the "residence premises"is located. The appraisers will separately set theamount of loss. If the appraisers submit a writtenreport of an agreement to us, the amount agreedupon will be the amount of loss. If they fail toagree, they will submit their differences to the um-pire. A decision agreed to by any two will set theamount of loss.Each party will:1. Pay its own appraiser; and2. Bear the other expenses of the appraisal and

umpire equally.F. Other Insurance And Service Agreement

If a loss covered by this policy is also covered by:1. Other insurance, we will pay only the proportion

of the loss that the limit of liability that appliesunder this policy bears to the total amount ofinsurance covering the loss; or

2. A service agreement, this insurance is excessover any amounts payable under any suchagreement. Service agreement means a serv-ice plan, property restoration plan, home war-ranty or other similar service warranty agree-ment, even if it is characterized as insurance.

G. Suit Against UsNo action can be brought against us unless therehas been full compliance with all of the terms un-der Section I of this policy and the action is startedwithin two years after the date of loss.


H. Our OptionIf we give you written notice within 30 days afterwe receive your signed, sworn proof of loss, wemay repair or replace any part of the damagedproperty with material or property of like kind andquality.

I. Loss PaymentWe will adjust all losses with you. We will pay youunless some other person is named in the policyor is legally entitled to receive payment. Loss willbe payable 60 days after we receive your proof ofloss and:1. Reach an agreement with you;2. There is an entry of a final judgment; or3. There is a filing of an appraisal award with us.

J. Abandonment Of PropertyWe need not accept any property abandoned byan "insured".

K. Mortgage Clause1. If a mortgagee is named in this policy, any loss

payable under Coverage A or B will be paid tothe mortgagee and you, as interests appear. Ifmore than one mortgagee is named, the orderof payment will be the same as the order ofprecedence of the mortgages.

2. If we deny your claim, that denial will not applyto a valid claim of the mortgagee, if the mort-gagee:a. Notifies us of any change in ownership,

occupancy or substantial change in risk ofwhich the mortgagee is aware;

b. Pays any premium due under this policy ondemand if you have neglected to pay thepremium; and

c. Submits a signed, sworn statement of losswithin 60 days after receiving notice from usof your failure to do so. Paragraphs E. Ap-praisal, G. Suit Against Us and I. LossPayment under Section I – Conditions alsoapply to the mortgagee.

3. If we decide to cancel or not to renew thispolicy, the mortgagee will be notified at least 10days before the date cancellation or nonrene-wal takes effect.

4. If we pay the mortgagee for any loss and denypayment to you:a. We are subrogated to all the rights of the

mortgagee granted under the mortgage onthe property; or

b. At our option, we may pay to the mortgageethe whole principal on the mortgage plusany accrued interest. In this event, we willreceive a full assignment and transfer of themortgage and all securities held as collat-eral to the mortgage debt.

5. Subrogation will not impair the right of themortgagee to recover the full amount of themortgagee's claim.

L. No Benefit To BaileeWe will not recognize any assignment or grant anycoverage that benefits a person or organizationholding, storing or moving property for a fee re-gardless of any other provision of this policy.

M. Nuclear Hazard Clause1. "Nuclear Hazard" means any nuclear reaction,

radiation, or radioactive contamination, allwhether controlled or uncontrolled or howevercaused, or any consequence of any of these.

2. Loss caused by the nuclear hazard will not beconsidered loss caused by fire, explosion, orsmoke, whether these perils are specificallynamed in or otherwise included within the Per-ils Insured Against.

3. This policy does not apply under Section I toloss caused directly or indirectly by nuclearhazard, except that direct loss by fire resultingfrom the nuclear hazard is covered.

N. Recovered PropertyIf you or we recover any property for which wehave made payment under this policy, you or wewill notify the other of the recovery. At your option,the property will be returned to or retained by youor it will become our property. If the recoveredproperty is returned to or retained by you, the losspayment will be adjusted based on the amount youreceived for the recovered property.

O. Volcanic Eruption PeriodOne or more volcanic eruptions that occur within a72 hour period will be considered as one volcaniceruption.

P. Policy PeriodThis policy applies only to loss which occurs dur-ing the policy period.

Q. Concealment Or FraudWe provide coverage to no "insureds" under thispolicy if, whether before or after a loss, an "in-sured" has:1. Intentionally concealed or misrepresented any

material fact or circumstance;


2. Engaged in fraudulent conduct; or3. Made false statements;relating to this insurance.

R. Loss Payable ClauseIf the Declarations show a loss payee for certainlisted insured personal property, the definition of"insured" is changed to include that loss payeewith respect to that property.If we decide to cancel or not renew this policy, thatloss payee will be notified in writing.

SECTION II – LIABILITY COVERAGESA. Coverage E – Personal Liability

If a claim is made or a suit is brought against an"insured" for damages because of "bodily injury" or"property damage" caused by an "occurrence" towhich this coverage applies, we will:1. Pay up to our limit of liability for the damages

for which an "insured" is legally liable. Dam-ages include prejudgment interest awardedagainst an "insured"; and

2. Provide a defense at our expense by counselof our choice, even if the suit is groundless,false or fraudulent. We may investigate andsettle any claim or suit that we decide is ap-propriate. Our duty to settle or defend endswhen our limit of liability for the "occurrence"has been exhausted by payment of a judgmentor settlement.

B. Coverage F – Medical Payments To OthersWe will pay the necessary medical expenses thatare incurred or medically ascertained within threeyears from the date of an accident causing "bodilyinjury". Medical expenses means reasonablecharges for medical, surgical, x-ray, dental, am-bulance, hospital, professional nursing, prostheticdevices and funeral services. This coverage doesnot apply to you or regular residents of yourhousehold except "residence employees". As toothers, this coverage applies only:1. To a person on the "insured location" with the

permission of an "insured"; or2. To a person off the "insured location", if the

"bodily injury":a. Arises out of a condition on the "insured

location" or the ways immediately adjoining;b. Is caused by the activities of an "insured";c. Is caused by a "residence employee" in the

course of the "residence employee's" em-ployment by an "insured"; or

d. Is caused by an animal owned by or in thecare of an "insured".

SECTION II – EXCLUSIONSA. "Motor Vehicle Liability"

1. Coverages E and F do not apply to any "motorvehicle liability" if, at the time and place of an"occurrence", the involved "motor vehicle":a. Is registered for use on public roads or

property;b. Is not registered for use on public roads or

property, but such registration is required bya law, or regulation issued by a governmentagency, for it to be used at the place of the"occurrence"; or

c. Is being:(1) Operated in, or practicing for, any prear-

ranged or organized race, speed contestor other competition;

(2) Rented to others;(3) Used to carry persons or cargo for a

charge; or(4) Used for any "business" purpose except

for a motorized golf cart while on a golf-ing facility.

2. If Exclusion A.1. does not apply, there is still nocoverage for "motor vehicle liability" unless the"motor vehicle" is:a. In dead storage on an "insured location";b. Used solely to service an "insured's" resi-

dence;c. Designed to assist the handicapped and, at

the time of an "occurrence", it is:(1) Being used to assist a handicapped

person; or(2) Parked on an "insured location";

d. Designed for recreational use off publicroads and:

(1) Not owned by an "insured"; or(2) Owned by an "insured" provided the

"occurrence" takes place on an "insuredlocation" as defined in Definitions B.6.a., b., d., e. or h.; or

e. A motorized golf cart that is owned by an"insured", designed to carry up to 4 per-sons, not built or modified after manufac-ture to exceed a speed of 25 miles per houron level ground and, at the time of an "oc-currence", is within the legal boundaries of:

(1) A golfing facility and is parked or storedthere, or being used by an "insured" to:

(a) Play the game of golf or for otherrecreational or leisure activity al-lowed by the facility;


(b) Travel to or from an area where"motor vehicles" or golf carts areparked or stored; or

(c) Cross public roads at designatedpoints to access other parts of thegolfing facility; or

(2) A private residential community, includ-ing its public roads upon which a mo-torized golf cart can legally travel, whichis subject to the authority of a propertyowners association and contains an "in-sured's" residence.

B. "Watercraft Liability"1. Coverages E and F do not apply to any "water-

craft liability" if, at the time of an "occurrence",the involved watercraft is being:a. Operated in, or practicing for, any prear-

ranged or organized race, speed contest orother competition. This exclusion does notapply to a sailing vessel or a predicted logcruise;

b. Rented to others;c. Used to carry persons or cargo for a

charge; ord. Used for any "business" purpose.

2. If Exclusion B.1. does not apply, there is still nocoverage for "watercraft liability" unless, at thetime of the "occurrence", the watercraft:a. Is stored;b. Is a sailing vessel, with or without auxiliary

power, that is:(1) Less than 26 feet in overall length; or(2) 26 feet or more in overall length and not

owned by or rented to an "insured"; orc. Is not a sailing vessel and is powered by:

(1) An inboard or inboard-outdrive engine ormotor, including those that power a wa-ter jet pump, of:

(a) 50 horsepower or less and notowned by an "insured"; or

(b) More than 50 horsepower and notowned by or rented to an "insured";or

(2) One or more outboard engines or mo-tors with:

(a) 25 total horsepower or less;(b) More than 25 horsepower if the

outboard engine or motor is notowned by an "insured";

(c) More than 25 horsepower if theoutboard engine or motor is ownedby an "insured" who acquired it dur-ing the policy period; or

(d) More than 25 horsepower if theoutboard engine or motor is ownedby an "insured" who acquired it be-fore the policy period, but only if:(i) You declare them at policy incep-

tion; or(ii) Your intent to insure them is

reported to us in writing within 45days after you acquire them.

The coverages in (c) and (d) above ap-ply for the policy period.

Horsepower means the maximum powerrating assigned to the engine or motor bythe manufacturer.

C. "Aircraft Liability"This policy does not cover "aircraft liability".

D. "Hovercraft Liability"This policy does not cover "hovercraft liability".

E. Coverage E – Personal Liability And CoverageF – Medical Payments To OthersCoverages E and F do not apply to the following:1. Expected Or Intended Injury

"Bodily injury" or "property damage" which isexpected or intended by an "insured" even ifthe resulting "bodily injury" or "property dam-age":a. Is of a different kind, quality or degree than

initially expected or intended; orb. Is sustained by a different person, entity,

real or personal property, than initially ex-pected or intended.

However, this Exclusion E.1. does not apply to"bodily injury" resulting from the use of reason-able force by an "insured" to protect persons orproperty;

2. "Business"a. "Bodily injury" or "property damage" arising

out of or in connection with a "business"conducted from an "insured location" or en-gaged in by an "insured", whether or not the"business" is owned or operated by an "in-sured" or employs an "insured".This Exclusion E.2. applies but is not lim-ited to an act or omission, regardless of itsnature or circumstance, involving a serviceor duty rendered, promised, owed, or im-plied to be provided because of the natureof the "business".

b. This Exclusion E.2. does not apply to:(1) The rental or holding for rental of an

"insured location";


(a) On an occasional basis if used onlyas a residence;

(b) In part for use only as a residence,unless a single family unit is in-tended for use by the occupyingfamily to lodge more than two room-ers or boarders; or

(c) In part, as an office, school, studio orprivate garage; and

(2) An "insured" under the age of 21 yearsinvolved in a part-time or occasional,self-employed "business" with no em-ployees;

3. Professional Services"Bodily injury" or "property damage" arising outof the rendering of or failure to render profes-sional services;

4. "Insured's" Premises Not An "InsuredLocation""Bodily injury" or "property damage" arising outof a premises:a. Owned by an "insured";b. Rented to an "insured"; orc. Rented to others by an "insured";that is not an "insured location";

5. War"Bodily injury" or "property damage" caused di-rectly or indirectly by war, including the follow-ing and any consequence of any of the follow-ing:a. Undeclared war, civil war, insurrection,

rebellion or revolution;b. Warlike act by a military force or military

personnel; orc. Destruction, seizure or use for a military

purpose.Discharge of a nuclear weapon will be deemeda warlike act even if accidental;

6. Communicable Disease"Bodily injury" or "property damage" whicharises out of the transmission of a communi-cable disease by an "insured";

7. Sexual Molestation, Corporal PunishmentOr Physical Or Mental Abuse"Bodily injury" or "property damage" arising outof sexual molestation, corporal punishment orphysical or mental abuse; or

8. Controlled Substance"Bodily injury" or "property damage" arising outof the use, sale, manufacture, delivery, transferor possession by any person of a ControlledSubstance as defined by the Federal Food andDrug Law at 21 U.S.C.A. Sections 811 and812. Controlled Substances include but are notlimited to cocaine, LSD, marijuana and all nar-cotic drugs. However, this exclusion does notapply to the legitimate use of prescription drugsby a person following the orders of a licensedphysician.

Exclusions A. "Motor Vehicle Liability", B. "Water-craft Liability", C. "Aircraft Liability", D. "HovercraftLiability" and E.4. "Insured's" Premises Not An "In-sured Location" do not apply to "bodily injury" to a"residence employee" arising out of and in thecourse of the "residence employee's" employmentby an "insured".

F. Coverage E – Personal LiabilityCoverage E does not apply to:1. Liability:

a. For any loss assessment charged againstyou as a member of an association, corpo-ration or community of property owners, ex-cept as provided in D. Loss Assessmentunder Section II – Additional Coverages;

b. Under any contract or agreement enteredinto by an "insured". However, this exclu-sion does not apply to written contracts:

(1) That directly relate to the ownership,maintenance or use of an "insured loca-tion"; or

(2) Where the liability of others is assumedby you prior to an "occurrence";

unless excluded in a. above or elsewhere inthis policy;

2. "Property damage" to property owned by an"insured". This includes costs or expenses in-curred by an "insured" or others to repair, re-place, enhance, restore or maintain such prop-erty to prevent injury to a person or damage toproperty of others, whether on or away from an"insured location";

3. "Property damage" to property rented to, occu-pied or used by or in the care of an "insured".This exclusion does not apply to "propertydamage" caused by fire, smoke or explosion;

4. "Bodily injury" to any person eligible to receiveany benefits voluntarily provided or required tobe provided by an "insured" under any:a. Workers' compensation law;


b. Non-occupational disability law; orc. Occupational disease law;

5. "Bodily injury" or "property damage" for whichan "insured" under this policy:a. Is also an insured under a nuclear energy

liability policy issued by the:(1) Nuclear Energy Liability Insurance As-

sociation;(2) Mutual Atomic Energy Liability Under-

writers;(3) Nuclear Insurance Association of Can-

ada;or any of their successors; or

b. Would be an insured under such a policybut for the exhaustion of its limit of liability;or

6. "Bodily injury" to you or an "insured" as definedunder Definitions 5.a. or b.This exclusion also applies to any claim madeor suit brought against you or an "insured":a. To repay; orb. Share damages with;another person who may be obligated to paydamages because of "bodily injury" to an "in-sured".

G. Coverage F – Medical Payments To OthersCoverage F does not apply to "bodily injury":1. To a "residence employee" if the "bodily injury":

a. Occurs off the "insured location"; andb. Does not arise out of or in the course of the

"residence employee's" employment by an"insured";

2. To any person eligible to receive benefits vol-untarily provided or required to be provided un-der any:a. Workers' compensation law;b. Non-occupational disability law; orc. Occupational disease law;

3. From any:a. Nuclear reaction;b. Nuclear radiation; orc. Radioactive contamination;all whether controlled or uncontrolled or how-ever caused; ord. Any consequence of any of these; or

4. To any person, other than a "residence em-ployee" of an "insured", regularly residing onany part of the "insured location".

SECTION II – ADDITIONAL COVERAGESWe cover the following in addition to the limits ofliability:A. Claim Expenses

We pay:1. Expenses we incur and costs taxed against an

"insured" in any suit we defend;2. Premiums on bonds required in a suit we de-

fend, but not for bond amounts more than theCoverage E limit of liability. We need not applyfor or furnish any bond;

3. Reasonable expenses incurred by an "insured"at our request, including actual loss of earnings(but not loss of other income) up to $250 perday, for assisting us in the investigation or de-fense of a claim or suit; and

4. Interest on the entire judgment which accruesafter entry of the judgment and before we payor tender, or deposit in court that part of thejudgment which does not exceed the limit of li-ability that applies.

B. First Aid ExpensesWe will pay expenses for first aid to others in-curred by an "insured" for "bodily injury" coveredunder this policy. We will not pay for first aid to an"insured".

C. Damage To Property Of Others1. We will pay, at replacement cost, up to $1,000

per "occurrence" for "property damage" toproperty of others caused by an "insured".

2. We will not pay for "property damage":a. To the extent of any amount recoverable

under Section I;b. Caused intentionally by an "insured" who is

13 years of age or older;c. To property owned by an "insured";d. To property owned by or rented to a tenant

of an "insured" or a resident in your house-hold; or

e. Arising out of:(1) A "business" engaged in by an "in-

sured";(2) Any act or omission in connection with a

premises owned, rented or controlled byan "insured", other than the "insured lo-cation"; or

(3) The ownership, maintenance, occu-pancy, operation, use, loading or un-loading of aircraft, hovercraft, watercraftor "motor vehicles".


This exclusion e.(3) does not apply to a"motor vehicle" that:

(a) Is designed for recreational use offpublic roads;

(b) Is not owned by an "insured"; and(c) At the time of the "occurrence", is

not required by law, or regulation is-sued by a government agency, tohave been registered for it to beused on public roads or property.

D. Loss Assessment1. We will pay up to $1,000 for your share of loss

assessment charged against you, as owner ortenant of the "residence premises", during thepolicy period by a corporation or association ofproperty owners, when the assessment ismade as a result of:a. "Bodily injury" or "property damage" not

excluded from coverage under Section II –Exclusions; or

b. Liability for an act of a director, officer ortrustee in the capacity as a director, officeror trustee, provided such person:

(1) Is elected by the members of a corpora-tion or association of property owners;and

(2) Serves without deriving any incomefrom the exercise of duties which aresolely on behalf of a corporation or as-sociation of property owners.

2. Paragraph I. Policy Period under Section II –Conditions does not apply to this Loss As-sessment Coverage.

3. Regardless of the number of assessments, thelimit of $1,000 is the most we will pay for lossarising out of:a. One accident, including continuous or re-

peated exposure to substantially the samegeneral harmful condition; or

b. A covered act of a director, officer or trus-tee. An act involving more than one direc-tor, officer or trustee is considered to be asingle act.

4. We do not cover assessments charged againstyou or a corporation or association of propertyowners by any governmental body.

SECTION II – CONDITIONSA. Limit Of Liability

Our total liability under Coverage E for all dam-ages resulting from any one "occurrence" will notbe more than the Coverage E limit of liabilityshown in the Declarations. This limit is the sameregardless of the number of "insureds", claimsmade or persons injured. All "bodily injury" and"property damage" resulting from any one accidentor from continuous or repeated exposure to sub-stantially the same general harmful conditionsshall be considered to be the result of one "occur-rence".Our total liability under Coverage F for all medicalexpense payable for "bodily injury" to one personas the result of one accident will not be more thanthe Coverage F limit of liability shown in the Decla-rations.

B. Severability Of InsuranceThis insurance applies separately to each "in-sured". This condition will not increase our limit ofliability for any one "occurrence".

C. Duties After "Occurrence"In case of an "occurrence", you or another "in-sured" will perform the following duties that apply.We have no duty to provide coverage under thispolicy if your failure to comply with the followingduties is prejudicial to us. You will help us by see-ing that these duties are performed:1. Give written notice to us or our agent as soon

as is practical, which sets forth:a. The identity of the policy and the "named

insured" shown in the Declarations;b. Reasonably available information on the

time, place and circumstances of the "oc-currence"; and

c. Names and addresses of any claimantsand witnesses;

2. Cooperate with us in the investigation, settle-ment or defense of any claim or suit;

3. Promptly forward to us every notice, demand,summons or other process relating to the "oc-currence";

4. At our request, help us:a. To make settlement;b. To enforce any right of contribution or in-

demnity against any person or organizationwho may be liable to an "insured";


c. With the conduct of suits and attend hear-ings and trials; and

d. To secure and give evidence and obtain theattendance of witnesses;

5. With respect to C. Damage To Property OfOthers under Section II – Additional Cover-ages, submit to us within 60 days after theloss, a sworn statement of loss and show thedamaged property, if in an "insured's" control;

6. No "insured" shall, except at such "insured's"own cost, voluntarily make payment, assumeobligation or incur expense other than for firstaid to others at the time of the "bodily injury".

D. Duties Of An Injured Person – Coverage F –Medical Payments To Others1. The injured person or someone acting for the

injured person will:a. Give us written proof of claim, under oath if

required, as soon as is practical; andb. Authorize us to obtain copies of medical

reports and records.2. The injured person will submit to a physical

exam by a doctor of our choice when and asoften as we reasonably require.

E. Payment Of Claim – Coverage F – MedicalPayments To OthersPayment under this coverage is not an admissionof liability by an "insured" or us.

F. Suit Against Us1. No action can be brought against us unless

there has been full compliance with all of theterms under this Section II.

2. No one will have the right to join us as a partyto any action against an "insured".

3. Also, no action with respect to Coverage E canbe brought against us until the obligation ofsuch "insured" has been determined by finaljudgment or agreement signed by us.

G. Bankruptcy Of An "Insured"Bankruptcy or insolvency of an "insured" will notrelieve us of our obligations under this policy.

H. Other InsuranceThis insurance is excess over other valid and col-lectible insurance except insurance written specifi-cally to cover as excess over the limits of liabilitythat apply in this policy.

I. Policy PeriodThis policy applies only to "bodily injury" or "prop-erty damage" which occurs during the policy pe-riod.

J. Concealment Or FraudWe do not provide coverage to an "insured" who,whether before or after a loss, has:1. Intentionally concealed or misrepresented any

material fact or circumstance;2. Engaged in fraudulent conduct; or3. Made false statements;relating to this insurance.

SECTIONS I AND II – CONDITIONSA. Liberalization Clause

If we make a change which broadens coverageunder this edition of our policy without additionalpremium charge, that change will automaticallyapply to your insurance as of the date we imple-ment the change in your state, provided that thisimplementation date falls within 60 days prior to orduring the policy period stated in the Declarations.This Liberalization Clause does not apply tochanges implemented with a general program re-vision that includes both broadenings and restric-tions in coverage, whether that general programrevision is implemented through introduction of:1. A subsequent edition of this policy; or2. An amendatory endorsement.

B. Waiver Or Change Of Policy ProvisionsA waiver or change of a provision of this policymust be in writing by us to be valid. Our requestfor an appraisal or examination will not waive anyof our rights.

C. Cancellation1. You may cancel this policy at any time by re-

turning it to us or by letting us know in writing ofthe date cancellation is to take effect.

2. We may cancel this policy only for the reasonsstated below by letting you know in writing ofthe date cancellation takes effect. This can-cellation notice may be delivered to you, ormailed to you at your mailing address shown inthe Declarations. Proof of mailing will be suffi-cient proof of notice.a. When you have not paid the premium, we

may cancel at any time by letting you knowat least 10 days before the date cancella-tion takes effect.

b. When this policy has been in effect for lessthan 60 days and is not a renewal with us,we may cancel for any reason by letting youknow at least 10 days before the date can-cellation takes effect.


c. When this policy has been in effect for 60days or more, or at any time if it is a re-newal with us, we may cancel:

(1) If there has been a material misrepre-sentation of fact which if known to uswould have caused us not to issue thepolicy; or

(2) If the risk has changed substantiallysince the policy was issued.

This can be done by letting you know atleast 30 days before the date cancellationtakes effect.

d. When this policy is written for a period ofmore than one year, we may cancel for anyreason at anniversary by letting you know atleast 30 days before the date cancellationtakes effect.

3. When this policy is canceled, the premium forthe period from the date of cancellation to theexpiration date will be refunded pro rata.

4. If the return premium is not refunded with thenotice of cancellation or when this policy is re-turned to us, we will refund it within a reason-able time after the date cancellation takes ef-fect.

D. NonrenewalWe may elect not to renew this policy. We may doso by delivering to you, or mailing to you at yourmailing address shown in the Declarations, writtennotice at least 30 days before the expiration dateof this policy. Proof of mailing will be sufficientproof of notice.

E. AssignmentAssignment of this policy will not be valid unlesswe give our written consent.

F. SubrogationAn "insured" may waive in writing before a loss allrights of recovery against any person. If notwaived, we may require an assignment of rights ofrecovery for a loss to the extent that payment ismade by us.If an assignment is sought, an "insured" must signand deliver all related papers and cooperate withus.Subrogation does not apply to Coverage F orParagraph C. Damage To Property Of Others un-der Section II – Additional Coverages.

G. DeathIf any person named in the Declarations or thespouse, if a resident of the same household, dies,the following apply:1. We insure the legal representative of the de-

ceased but only with respect to the premisesand property of the deceased covered underthe policy at the time of death; and

2. "Insured" includes:a. An "insured" who is a member of your

household at the time of your death, butonly while a resident of the "residencepremises"; and

b. With respect to your property, the personhaving proper temporary custody of theproperty until appointment and qualificationof a legal representative.

HOMEOWNERS HO AZ SP 16

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

HO AZ SP 16 Includes Copyright Material of Insurance Services Office, Inc. with its permission Page 1 of 7

SPECIAL PROVISIONS – ARIZONA

AGREEMENT is replaced by the following:

In reliance on the information you have given us, we agree to provide the insurance coverages indicated on the policy Declarations. In return, you must pay the premium when due and comply with the policy terms and conditions and immediately inform us of any change of title, use or occupancy of the “residence premises”.

DEFINITIONS

Item 2 in Paragraph B. is replaced by the following:

2. “Bodily injury” means actual physical injury, sickness or disease. This includes required care, loss of services and death resulting therefrom. “Bodily injury” does not include any of the following:

a. mental injuries such as: emotional distress, mental anguish, humiliation, mental distress, or any similar injury unless it arises out of physi-cal injury to the person claiming such a mental injury.

b. communicable disease, bacteria, parasite, virus, or other organism, any of which are transmitted by an “insured” to any other per-son. It also does not include the exposure to any such disease, bacteria, parasite, virus, or other organism by an “insured” to any other person.

Item 3.a. in Paragraph B. is replaced by the following:

3. “Business” means:

a. A trade, profession, or occupation engaged in on a full-time, part-time or occasional basis, whether for profit or otherwise including the rental or holding for rental of an “insured loca-tion” on a short term or occasional basis;

Item 11 in Paragraph B. is replaced by the following:

11. “Residence premises” means:

a. The one family dwelling where you reside;

b. The two, three or four family dwelling where you reside in at least one of the family units; or

c. That part of any other building where you reside;

and which is shown as the “residence premis-es” in the Declarations and which is occupied by you as your primary residence.

“Residence premises” also includes other structures and grounds at that location.

The following definitions are added to Paragraph B.:

12. "Actual cash value" means the amount it would currently cost to repair or replace covered property with new material of like kind and quality, less allowance for physical deterioration and de-preciation, including obsolescence.

13. “Vacant” means the dwelling lacks the neces-sary amenities, adequate furnishings, or utili-ties and services to permit occupancy of the dwelling as a residence.

14. “Unoccupied” means the dwelling is not being inhabited as a residence.

SECTION I – PROPERTY COVERAGES

The following is added to Paragraph A. Coverage A – Dwelling:

3. We do not cover damage to the “residence premises” arising from an “insured’s” “busi-ness”.

The following is added to Paragraph C. Coverage C – Personal Property item 1. Covered Property:

1.c. However, there is no coverage for damage to or theft of the personal property of an “insured”, or of others, or of a guest when the damage or theft arises from an “insured’s” “business”.

Item 3.e. and Item 3.g.of paragraph C. Coverage C – Personal Property item 3. Special Limits of Liabil-ity are changed as follows:

3.e. $1,500 on jewelry, watches, furs, precious and semiprecious stones.

3.g. $2,500 on silverware, silver-plated ware, goldware, gold-plated ware, platinumware, platinum-plated ware and pewterware. This includes flatware, hollow-ware, tea sets, trays and trophies made of or including silver, gold or pewter.

of 7 Includes Copyright Material of Insurance Services Office, Inc. with its permission HO AZ SP 16

The following are added to Paragraph C. Coverage C – Personal Property item 3. Special Limits of Lia-bility:

l. $5,000 on personal computers and related equipment and storage media such as disk drives, printers and commercial software. There is no coverage for said personal com-puters and related equipment and storage media while away from the “residence prem-ises”.

m. $1,500 on all collections including but not limited to baseball cards, comic books, album covers and any other memorabilia. This limit applies regardless of the number of collec-tions or collectibles.

n. $2,500 on any one work of art and $10,000 in the aggregate for works of art including, but not limited to, statuary (such as, but not lim-ited to, Hummels), marbles, bronzes, porce-lains, rare glass, bric-a-brac and art glass windows.

o. $2,500 on any one article and $10,000 in the aggregate for loss of oriental rugs. Orien-tal rugs are any hand-woven silk or wool rug, carpet, tapestry, wall-hanging or other similar article, whose principle value is derived from its color, design, quality of wood or silk, quali-ty of weaving, condition and age. Oriental rugs include but are not limited to Persian (Iranian), Turkish, Caucasian and Turkoman, Chinese and Indian rugs.

p. $2,000 for loss by theft of bicycles and re-lated equipment.

q. $2,000 on cameras, projectors and related equipment.

r. $2,000 on audio and video media storage devices such as dvds, records, cds and tapes.

s. $2,000 on gaming systems including their games and accessories.

t. $2,000 for loss by theft of ladies’ purses, handbags, wallets, cosmetic bags, and relat-ed accessories.

u. $2,500 for loss by theft of, or vandalism to, large appliances, including air conditioners, HVAC systems, clothes washing machines, clothes dryers, refrigerators, and any other unattached large appliances.

Paragraph C. Coverage C – Personal Property

Item 4.c Property Not Covered “Motor vehicles” is replaced by:

c. “Motor vehicles”.

(1) This includes:

(a) Their accessories, equipment and parts; or

(b) Electronic apparatus and accessories de-signed to be operated solely by power from the electrical system of the “motor vehicle”. Ac-cessories include antennas, tapes, wires rec-ords, discs or other media that can be used with any apparatus described above.

This exclusion applies whether or not the “mo-tor vehicle” is on or off the “residence premis-es” or whether the property described in (a) and (b) above is located on or off the “motor vehicle”.

(2) We do cover “motor vehicles” not required to be registered for use on public roads or property which are:

(a) Used solely to service an “insured’s” resi-dence; or

(b) Designed to assist the handicapped;

The following are added to Paragraph C. Coverage C – Personal Property Item 4. Property Not Covered:

l. Controlled Substances as defined by the Federal Food and Drug Law at 21 U.S.C. Sec-tions 811 and 812. Controlled Substances in-clude but are not limited to cocaine, LSD, mari-juana and all narcotic drugs. With the exception of marijuana, this exclusion does not apply to prescription drugs possessed for the legitimate use by an insured following the law-ful orders of a licensed health care profession-al. Marijuana, medicinal or otherwise, is not covered under any circumstances.

m. Marijuana or cannabis plants, or any items used to grow or cultivate marijuana or canna-bis plants.

ADDITIONAL COVERAGES

The following is added to Paragraph E. Additional Coverages Item 1. Debris Removal Item 1.a.:

The limit for the costs for necessary debris removal services incurred by you prior to obtaining our authori-ty to incur such costs is $2,500. This limit does not apply in the event of a covered loss by fire where the actual cash value is equal to or exceeds the dwelling limit of coverage shown in the Declarations or a loss caused by a state declared emergency.

Paragraph E. Additional Coverages Item 2. Rea-sonable Repairs is renamed 2. Reasonable Repairs and Emergency Services and Item 2.a is replaced as follows:

HO AZ SP 16 Includes Copyright Material of Insurance Services Office, Inc., with its permission Page 3 of 7

2. Reasonable Repairs and Emergency Services

a. We will pay the reasonable cost incurred by you for reasonable repairs and emergency services per-formed solely to protect covered property that is dam-aged by a Peril Insured Against from further damage.

The limit for the costs for necessary reasonable re-pairs and emergency services incurred by you prior to obtaining our authority to incur such costs is $2,500. This limit does not apply in the event of a covered loss by fire where the actual cash value is equal to or exceeds the dwelling limit of coverage shown in the Declarations or a loss caused by a state declared emergency.

The following is added to Paragraph E. Additional Coverages Item 3. Trees, Shrubs and Other Plants:

No coverage is provided for marijuana plants or can-nabis plants.

4. Fire Department Service Charge is deleted.

SECTION I – PERILS INSURED AGAINST

The introductory paragraph in item A.1. is replaced by the following:

We insure for sudden and accidental direct physical loss to property described in Coverages A and B. Unless otherwise excluded, we cover all direct loss by fire and lightning.

Paragraph A.2.c.(4) is replaced by the following:

Vandalism and malicious mischief, and any ensuing loss caused by any intentional and wrongful act committed in the course of the vandalism or malicious mischief, if the “residence premises” has been “va-cant” or “unoccupied” for more than 30 consecutive days immediately before the loss. A dwelling being constructed is not considered “vacant” or “unoccu-pied”;

Paragraph A.2.c.(5) is replaced by the following:

(5) Rust, mold, fungus, wet rot, dry rot, asbestos, lead, or microbial contamina-tion or pathogenic organism whether or not hidden within the walls or ceilings or within or beneath the floors or above the ceilings of a structure. This exclusion applies to all loss, damage, costs and/or expenses incurred by you to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize the rust, mold, fungus, wet rot, dry rot, asbestos, lead, or microbial contamination or pathogenic organism.

The following are added to Paragraph A.2.c.(6):

(i) Nesting or infestation, or dis-charge or release of waste products or secretions, by any animals, birds, rodents or insects;

(j) Pressure from or presence of (1) any trees, shrubs, plants or lawn, or (2) any root system from any trees, shrubs, plants or lawn;

The Exception to c.(6) in paragraph A.2.c.(6) is replaced by the following:

If any of these cause direct physical loss or damage to covered property from direct contact with water, and the water results from a sudden and accidental discharge, eruption, overflow or release of water from within any portion of a plumbing, heating, air condi-tioning or automatic fire protective sprinkler system, or household appliance, we cover loss caused by the water. Additionally, unless such loss is otherwise excluded herein, we cover loss to property covered under coverage A or B resulting from a sudden and accidental discharge, eruption, overflow or release of water from within any portion of a plumbing, heating, air conditioning, automatic protective sprinkler system or household appliance causing direct physical loss or damage to covered property from direct contact from water. A sudden and accidental discharge, eruption, overflow or release of water does not include a con-stant or repeating gradual, intermittent or slow release of water, or the infiltration or presence of water over a period of time. We also cover the cost of tearing out and replacing any part of a building necessary to repair the system or appliance.

This exception does not include loss, including deteri-oration, rust, mold, fungus, or wet or dry rot:

a. to the appliance or system from which the water or steam escaped;

b. caused by or resulting from freezing, except as provided in paragraph 2(c);


c. on the “residence premises” caused by accidental discharge or overflow which occurs off the “resi-dence premises”;

d. caused by or resulting from any water, or the presence of water or steam, over a period of time from any constant, continuous or repeating grad-ual, intermittent or slow discharge, seepage, leakage, trickle, collecting infiltration, or overflow of water from any source whether known or un-known to any insured, whether or not hidden from within any portion of a plumbing, heating or air conditioning system or from within a household appliance;

e. caused by or resulting from water which backs up through sewers or drains or water which enters into and overflows from within a sump pump, well or other type system designed to remove subsur-face water which is drained from the foundation area.

The following language is eliminated from Paragraph A.2.:

Section I – Exclusion A.3. Water Damage, Para-graphs a. and c. that apply to surface water and water below the surface of the ground do not apply to loss by water covered under c.(5) and (6) above.

The introductory paragraph in item B. Coverage C – Personal Property is replaced by the following:

We insure for sudden and accidental direct physical loss to property described in Coverage C caused by any of the following perils unless the loss is excluded in Section I – Exclusions, with the exception of loss by fire and lightning. Unless otherwise excluded, we cover all direct loss by fire and lightning.

Paragraph B. Coverage C – Personal Property item 12. Accidental Discharge or Overflow of Water or Steam is replaced by the following:

12. Sudden and Accidental Discharge, Eruption,

Overflow or Release of Water from within any portion of a plumbing, heating, air conditioning or automatic fire protective sprinkler system, or household appliance causing direct physical loss or damage to covered property from direct con-tact from water. A sudden and accidental dis-charge, eruption, overflow or release of water does not include a constant or repeating gradual, intermittent or slow release of water, or the infil-tration or presence of water over a period of time.

This peril does not include loss, including deterio-ration, rust, mold, or wet or dry rot:

a. to the appliance or system from which the wa-ter or steam escaped;

b. caused by or resulting from freezing, except as provided for in peril insured against 14. freezing;

c. on the “residence premises” caused by acci-dental discharge or overflow which occurs off the “residence premises”.

d. caused by or resulting from any water, or the presence of water or steam, over a period of time from any constant, continuous or repeat-ing gradual, intermittent or slow discharge, seepage, leakage, trickle, collecting infiltra-tion, or overflow of water from any source whether known or unknown to any insured, whether or not hidden, from within any portion of a plumbing, heating or air conditioning sys-tem or from within a household appliance;

e. caused by or resulting from water which backs up through sewers or drains or water which enters into and overflows from within a sump pump, well or other type system de-signed to remove subsurface water which is drained from the foundation area.

SECTION I – EXCLUSIONS

Paragraph A. 3. Water Damage, item (b), is replaced by the following:

b. water, sewage or waterborne material which backs up through sewers, drains or sumps, or which overflows or is discharged from a sump, sump pump or related equipment, sewers or drains, whether the blockage or backup origi-nates on or off premises; or

A. 8. Intentional Loss is replaced by the following:

8. Intentional, Criminal or Illegal Activity

a. We do not provide coverage for any loss aris-ing out of any act committed by or at the direc-tion of an "insured" with the intent to cause a loss, or any loss resulting from criminal or ille-gal activity.

Criminal and Illegal Activity means any and all criminal and illegal acts performed by any in-sured that result in damage to your structure or personal property.

b. However, this exclusion will not apply to deny an "insured's" claim for an otherwise covered property loss under this policy if such loss is caused by an act of domestic violence by an-other "insured" under this policy and the "in-sured" making claim:

(1) Did not cooperate in or contribute to the creation of the loss; and


(2) Cooperates in any investigation relating to the loss.

We may apply reasonable standards of proof for such claims.

c. If we pay a claim pursuant to Paragraph 8.b., our payment to the "insured" is limited to that "insured's" insurable interest in the property less any payments we first made to a mortga-gee or other party with a secured interest in the property. In no event will we pay more than the Limit of Liability.

(This is Exclusion A.8. in Forms HO 00 03 and HO 00 05.)

The following are added to Paragraph A: 11. Illegal Manufacturing, Production or Opera-tion, meaning loss from:

a. The illegal growing of plants or the illegal rais-ing or keeping of animals; or

b. The illegal manufacture, production, operation or processing of chemical, biological, ani-mal or plant materials.

Such loss is excluded whether caused by vandal-ism or any other cause and whether or not within the knowledge or control of an insured.

12. Rust, Mold, Fungus, Wet Rot, Dry Rot, Asbes-tos, Lead, or Microbial Contamination or Patho-genic Organism

Rust, mold, fungus, wet rot, dry rot, asbestos, lead, or microbial contamination or pathogenic organism. Whenever such rust, mold, wet rot, dry rot, lead, as-bestos, or microbial contamination or pathogenic organism occurs, it is always excluded under this policy, however caused.

SECTION I – CONDITIONS

Paragraph B. Duties After Loss Item 4.a. is replaced by the following:

a. Make reasonable and necessary repairs to protect the property. Any repairs performed by or on behalf of the insured beyond repairs rea-sonably necessary to protect the property from further damage may result in a denial of cover-age for the entire claim if the repairs, beyond those reasonably necessary to protect the property from further damage, hinders our in-vestigation and evaluation of the cause of the loss or the determination of the scope and ex-tent of the damage caused by the loss;

The following is added to Paragraph B. Duties After Loss Item 7:

d. Provide recorded or signed statements;

The following is added to Paragraph C. Loss Settle-ment item 1.:

Payment of loss on an actual cash value basis will not include payment of sales tax unless and until such sales tax is actually incurred by you.

The following is added to Paragraph C. Loss Settle-ment item 2.:

f. Payment of loss on an actual cash value basis will not include payment of sales tax or contractor’s overhead and profit unless and un-til such sales tax or contractor’s overhead and profit is actually incurred by you.

E. Appraisal is replaced by the following:

E. Appraisal

If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent and impartial appraiser within 20 days after receiving a written request from the other. The two appraisers will choose a competent and impartial umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the state where the "residence premises" is located. The appraisers will separately set the amount of loss. If the ap-praisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their dif-ferences to the umpire. A decision agreed to by any two will set the amount of loss.

Each party will:

1. Pay its own appraiser; and

2. Bear the other expenses of the appraisal and umpire equally.

I. Loss Payment is replaced by the following:

I. Loss Payment

We will adjust all losses with you. We will pay you unless some other person is named in the policy or is legally entitled to receive payment. Loss will be payable 30 days after we receive your proof of loss and:

1. Reach an agreement with you;

2. There is an entry of a final judgment; or

3. There is a filing of an appraisal award with us.

Q.Concealment Or Fraud is replaced by the follow-ing:


Q. Concealment Or Fraud

We provide coverage to no "insureds" under this policy if, whether before or after a loss, an "in-sured" has:

1. Intentionally concealed or misrepresented any material fact or circumstance;

2. Made false statements of fact which, if known to us, would have caused us not to issue the policy; or

3. Engaged in fraudulent conduct relating to this insurance.

(This is Condition P. in Form HO 00 04.)

SECTION II – EXCLUSIONS

The following is added to Paragraph B. “Watercraft Liability”:

3. Coverages E and F do not apply to “bodily injury” or “property damage” arising out of the ownership, maintenance, use, occupancy, loading or unloading, entering or exiting of any “watercraft” designated as an airboat, air cushion, jet ski or similar type of craft.

The exception to the “business” exclusion in item E.2.b(1)(a) is deleted in its entirety.

The following are added to Paragraph E. Coverage E – Personal Liability and Coverage F – Medical Payments to Others:

9. Aggressive Animals

“Bodily injury” or “property damage” arising directly or indirectly from the ownership, possession or supervi-sion of any of the animals described herein which are owned or kept or supervised by you or any insured or resident or tenant or guest whether or not the bodily injury or property damage occurs on your premises or any other location. These animals include a) any of the prohibited breeds of dogs described below, b) any other dog known by breed or species to be vicious; c) any animal with a previous bite history; or d) any animal or reptile whose ownership is considered illegal by any federal, state or local ordinance.

Prohibited breeds of dogs include Pit Bulls (by any name, including American Staffordshire Terrier), Doberman Pincers, Rottweilers, German Shepherds, Chows, Akitas, Huskies, Malamutes, Mastiffs, Presa Cannario, Working American Bulldog, South African Boerboels, Great Danes, Cane Corso (aka Italian Mastiff), Dogo Argentino, Afghan Kuchi, Wolf Hybrid, Alano Espanol, Tosa, Dogue de Bordeaux, Central Asian Ovtcharka, Fila Brasileiro, or Korean Jindos, and any mixed breed made up of one or more of the breeds listed above is also considered a prohibited breed of dog.

Pursuant to this exclusion we have no obligation to defend or indemnity any claim or “suit” seeking dam-ages for “bodily injury” or “property damage” which is excluded from coverage by this exclusion, including damages for “bodily injury” or “property damage” arising from the negligent supervision of any of the animals described herein.

10. Criminal Acts

“Bodily injury” or “property damage” resulting from any act or omission which is criminal, committed by or at the direction of an insured, or an act or omission which is criminal in nature and committed by an in-sured who lacked the mental capacity to appreciate the criminal nature or wrongfulness of the act or omission or conform his or her conduct to the re-quirements of the law, or to form the necessary intent under the law.

11. Personal Injury

“Bodily injury” or “property damage” resulting from Personal Injury. Personal Injury includes, but is not limited to:

a. false arrest, detention or imprisonment, or malicious prosecution; or

b. libel, slander or defamation of character; or:

c. invasion of privacy, wrongful eviction, wrongful entry or trespass.

12. Punitive Damages

We do not cover punitive or exemplary damages, including, but not limited to, any liability arising from demands for the payment of punitive or exemplary damages or the cost of defense related to such dam-ages.

SECTION II – CONDITIONS

J. Concealment Or Fraud is replaced by the follow-ing:

J. Concealment Or Fraud

We do not provide coverage to an "insured" who, whether before or after a loss, has:

1. Intentionally concealed or misrepresented any material fact or circumstance;


2. Made false statements of fact which, if known to us, would have caused us not to issue the policy; or

3. Engaged in fraudulent conduct relating to this insurance.

SECTION I AND II – CONDITIONS

C. Cancellation

Paragraph 2. is replaced by the following:

2. We may cancel this policy only for the reasons stated below by letting you know in writing of the date cancellation takes effect. This cancel-lation notice will be mailed to you at your mail-ing address shown in the Declarations.

Proof of mailing will be sufficient proof of no-tice.

a. When you have not paid the premium, we may cancel at any time by letting you know at least 10 days before the date cancella-tion takes effect.

b. When this policy has been in effect for less than 60 days and is not a renewal with us, we may cancel for any reason by letting you know at least 10 days before the date can-cellation takes effect.

c. When this policy has been in effect for 60 days or more, or at any time if it is a renew-al with us, we may cancel:

(1) If there has been a material misrepre-sentation of fact which if known to us would have caused us not to issue the policy;

(2) If the risk has changed substantially since the policy was issued, except to the extent that the insurer should rea-sonably have foreseen the change or contemplated the risk in writing the poli-cy; or

(3) If you fail to take reasonable steps to eliminate or reduce any conditions in or on the insured premises which contrib-uted to a loss in the past or will increase the probability of future losses.

This can be done by letting you know at least 30 days before the date cancellation takes effect.

D. Nonrenewal is replaced by the following:

D. Nonrenewal

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

If our nonrenewal is based on the condition of the premises, you will be given 30 days' notice to remedy the identified conditions. If the identified conditions are remedied, coverage will be re-newed. If the identified conditions are not reme-died to our satisfaction, you will be given an addi-tional 30 days, upon payment of premium, to correct the defective condition.

This provision will not apply and this policy will terminate:

1. At the end of the policy period, if you have agreed to nonrenewal; or

2. On the effective date of any other insurance policy, if you have accepted the other policy and it was issued as a replacement for this in-surance.

F. Subrogation

The following is added:

If we pay an "insured", who is a victim of domestic violence, for a loss caused by an act of domestic violence, the rights of that "insured" to recover damages from the perpetrator of the violence are transferred to us to the extent of our payment. Fol-lowing the loss, that "insured" may not waive such rights to recover against the perpetrator of the domestic violence.

All other provisions of this policy apply.

OPTIONAL COVERAGE ENDORSEMENTS NOTE: Insurance is provided for each of the following optional coverages only if indicated in the Declarations with the form number shown and a premium charged.

HOMEOWNERS PLUS ENDORSEMENT HP-1

COVERAGE A - DWELLING AND COVERAGE 8 - OTHER STRUCTURES Guaranteed Replacement Cost Coverage on Building Structures - GRC This endorsement providing for unlimited amounts of coverage on the dwelling and other structures (as defined in Coverages A and B) is included in this policy

COVERAGE C - PERSONAL PROPERTY

Increased to 70% of Coverage A Amount. As shown on the Declarations page, the limit of liability for Coverage C has been increased to 70% of the amount of Coverage A .

Replacement Cost Coverage on Personal Property- H0-1036

This endorsement which provides for replacement cost coverage on unscheduled personal property is included in this policy. In addition, replacement cost coverage applies to awnings, carpeting, household appliances, outdoor antennas and outdoor equipment, whether or not attached to buildings.

It is no longer necessary to repair or replace the property to receive full replacement cost unless the loss exceeds $1,500.

Special Limits of Liability. The Special Limits shown in the basic policy are increased as follows:

e. $2,000 on jewelry, watches , fur garments and garments trimmed with fur, precious and semi-precious stones.

g. $3,000 on silverware or goldware (not bullion) .

COVERAGE D - LOSS OF USE The amount of coverage for loss of use is increased to 40% of the amount of Coverage A.

ADDITIONAL COVERAGES

Refrigerated Contents Coverage. We will pay up to $500 over your deductible for loss to the contents of refrigerated or freezer units on the premises caused by either of the following:

1. Interruption of electrical service to the described dwelling; or

2. Mechanical or electrical malfunction of the unit itself.

The unplugging of the appliance shall not be covered. If a loss occurs to which this coverage may apply, you must use all reasonable means to protect the refrigerated products from further damage. If you do not protect the products as required, this coverage will not apply to the loss.

Damage to Property of Others. Under Section II - Additional Coverages, the limit on Damage to Property of Others is increased to $1,500.

Loss Assessment Coverage. The limit for this coverage is increased from $1,000 to $2,000.

ALL OTHER POLICY TERMS, CONDITIONS AND EXCLUSIONS NOT AMENDED BY THIS ENDORSEMENT CONTINUE TO APPLY.

OCE 2016

GUARANTEED REPLACEMENT COST ENDORSEMENT (Building Structures Only)

GRC

In consideration for the premium charged for this policy and subject to the following conditions the Company guarantees to pay the full cost of replacement of the dwelling and/or appurtenant private structures if the property is destroyed or damaged beyond repair by a peril insured against under this policy and during the term of this policy. All other provisions of the policy continue to apply.

1. The "limits of liability" for Coverage A (Dwelling) and Coverage B (Appurtenant Private Structures) as of the effective date of this

endorsement represent, to the satisfaction of the Company and Insured, the full replacement cost of the existing structure(s). In order to comply with this condition, you must provide us with accurate information about your home, including by confirming the accuracy of the square footage and year built information displayed on the Declarations page.

2. You must agree to maintain coverage on the building structures at 100% of their full replacement cost.

3. This endorsement applies only to buildings in place as of the date this endorsement becomes effective. Any structural alterations or additions made subsequent to the effective date of this endorsement are not included in this Replacement Cost Guarantee unless you report to us, within 30 days, any improvements or additions to the dwelling building. If you do not, and the full replacement cost of these improvements and/or additions exceeds $5,000 or 5% of the Coverage A limit shown on the Declarations page, whichever is greater, then the Coverage A limit shown on the Declarations page will again become the maximum limit we will pay.

4. Payment of loss on an actual cash value basis will not include payment of sales tax or contractor’s overhead and profit unless and until such

sales tax and overhead and profit is actually incurred by you.

REPLACEMENT COST COVERAGE ON PERSONAL PROPERTY

H0-1036

It is agreed that provisions of this policy applicable to Coverage C ‐ Unscheduled Personal Property and any Scheduled Personal Property endorsement which is a part of the policy are amended to substitute the term "replacement cost" for the term "actual cash value" where ever it appears.

1. It is also agreed that, subject to the terms of this endorsement , if any of the following property: a. outdoor radio and television antennas and aerials, b. carpeting, c. awnings, d. domestic appliances and outdoor equipment (whether or not attached to the building), is damaged by a peril covered by this policy, the loss will be adjusted on a "replacement cost" basis rather than an "actual cash value" basis.

2. This Company shall only be liable under this endorsement:

a. for any loss of property owned by an insured; b. for any loss to property which has been maintained in good and workable condition and is being used or stored for use by the insured; c. when the damaged or destroyed property has actually been repaired or replaced by the insured.

3. The Company's liability for loss under this Endorsement shall not exceed the smallest of the following amounts:

a. the limit of liability of this policy applicable to the damaged or destroyed property b. the replacement cost of the property or any part thereof; c. the amount actually and necessarily spent by the insured in repairing or replacing the property or any part thereof

4. We will pay the difference between "actual cash value" and the "replacement cost" only after the damaged destroyed or stolen property

has actually been repaired and replaced. You may make a claim for loss on an "actual cash value" basis and then make a claim within 180 days after loss, for any additional liability under "replacement cost" after you have repaired or replaced the property. Payment of loss on an “actual cash value” basis will not include payment of sales tax unless and until such sales tax is actually incurred by you.

5. The named insured may elect to disregard the replacement cost coverage condition of this endorsement in making claim, hereunder,

but such election shall not prejudice the named insured's right to make further claim within 60 day after loss for any additional ability brought about by this endorsement.

6. Exclusion: This Endorsement shall not apply to antiques, fine arts, paintings, statuary and similar articles, which, by their inherent

nature cannot be replaced with new articles. Also excluded are articles whose age or history contribute substantially to their value including by not limited to memorabilia, souvenirs, and collector's items.

7. Definition: "replacement cost" means the cost, at the time of the loss, of a new article identical to the one damaged, destroyed or

stolen. When the identical article is no longer manufactured or is not available, replacement cost shall mean the cost of a new article similar to that damaged or destroyed and which is of comparable quality and usefulness.

OCE 2016




PREMISES ALARM OR FIRE PROTECTION SYSTEMWe acknowledge the installation of an alarm systemand/or automatic sprinkler system approved by us onthe "residence premises". You agree to maintain thissystem or systems, for which we have granted acredit, in working order and to let us know promptly ofany change, including removal, made to the sys-tem(s).


THIS ENDORSEMENT DOES NOT CONSTITUTE A REDUCTION OF COVERAGE.


NO SECTION II – LIABILITY COVERAGES FORHOME DAY CARE BUSINESS

LIMITED SECTION I – PROPERTY COVERAGES FORHOME DAY CARE BUSINESS

A. "Business", as defined in the policy, means:1. A trade, profession or occupation engaged in

on a full-time, part-time, or occasional basis; or2. Any other activity engaged in for money or

other compensation, except the following:a. One or more activities:

(1) Not described in b. through d. below;and

(2) For which no "insured" receives morethan $2000 in total compensation for the12 months before the beginning of thepolicy period;

b. Volunteer activities for which no money isreceived other than payment for expensesincurred to perform the activity;

c. Providing home day care services for whichno compensation is received, other than themutual exchange of such services; or

d. The rendering of home day care services toa relative of an "insured".

B. If an "insured" regularly provides home day careservices to a person or persons other than "in-sureds" as their trade, profession or occupation,that service is a "business".

C. If home day care service is not a given "insured's"trade, profession or occupation but is an activity:1. That an "insured" engages in for money or

other compensation; and2. From which an "insured" receives more than

$2,000 in total/combined compensation from itand any other activity for the 12 months beforethe beginning of the policy period;

the home day care service and other activity will beconsidered a "business".

D. With respect to C. above, home day care service isonly an example of an activity engaged in formoney that may be a "business". Any single activ-ity or combination of activities:1. Described in A.2. above, and2. Engaged in for money by a single "insured";may be considered a "business" if the $2000threshold is exceeded.

E. With respect to A. through D. above, coveragedoes not apply to or is limited with respect to homeday care service which is a "business". For exam-ple, this policy:1. Does not provide:

a. Section II coverages. This is because a"business" of an "insured" is excluded underE.2. of Section II – Exclusions;

b. Coverage, under Section I, for other struc-tures from which any "business" is con-ducted; and

2. Limits Section I coverage, under Coverage C –Special Limits of Liability, for "business" prop-erty:a. On the "residence premises" for the home

day care "business" to $2,500. This is be-cause Category h. (e. in Form HO 00 08)imposes that limit on "business" property onthe "residence premises";

b. Away from the "residence premises" for thehome day care "business" to $500. This isbecause Category i. (f. in Form HO 00 08)imposes that limit on "business" propertyaway from the "residence premises". Cate-gory i. does not apply to property describedin Categories j. and k. (g. and h. respec-tively in Form HO 00 08).

HO WR 12 Page 1 of 2 02/2013 ed.

HOMEOWNERS HO WR 12


LIMITED SMOKE, SOOT, ASH AND DEBRIS RESULTING FROM WILDFIRE COVERAGE

SCHEDULE*

This special limit of liability applies to the total of all losses or costs payable under this endorsement during the policy period, regardless of the number of buildings, other structures and personal property insured under this policy. This limit is the total annual aggregate limit available for all Section I – Property Coverages listed in the Schedule. This limit does not increase any of the Section I – Property Coverage limits of liability. Total Property Coverage Limit for Smoke, Soot, Ash and Debris resulting from a Wildfire or Brushfire. This limitation of coverage is only applicable if the loss is not reported to us within forty-five (45) days of the governmental authority’s full containment or extinguishment of the wildfire or brushfire event.

$2,500

Coverage A – Dwelling

Coverage B – Other Structures

Coverage C – Personal Property

Coverage D – Loss of Use

*Entries may be left blank if shown elsewhere in this policy for this coverage.

With respect to the coverage provided under this endorse-ment, “smoke, soot, ash and debris resulting from a wildfire or brushfire” means any type of air or wind borne or wind driven smoke, soot, ash, dust, particle, material or byproduct that is produced, discharged, emitted or released during, caused by or at any time resulting from or following a wildfire and/or brushfire event. The following is added to SECTION I – PROPERTY COVERAGES, E - Additional Coverages: 13. Smoke, Soot, Ash and Debris Resulting From a Wildfire or Brushfire a. The amount shown in the Schedule above is the most

we will pay for:

(1) The total of all loss payable under the Section I – Property Coverages listed in the Schedule above caused by “smoke, soot, ash and debris resulting from a wildfire or brushfire;”

(2) The cost to remove “smoke, soot, ash and debris resulting from a wildfire or brushfire” from covered property;

(3) The cost to tear out and replace any part of the building or other covered property as needed to gain access to the “smoke, soot, ash and debris resulting from a wildfire or brushfire;” and

(4) The cost of testing of air or property to confirm the absence, presence or level of “smoke, soot, ash and debris resulting from a wildfire or brushfire,” whether performed prior to, during or after removal, repair, restoration or replacement. The cost of such testing will be provided only to the extent that there is reason to believe that there is a presence of “smoke, soot, ash and debris resulting from a wildfire or brushfire.”

b. The coverage described in this endorsement only applies when such losses or costs are a result of a wildfire or brushfire event, regardless of when such wildfire or brushfire event occurred, and the losses or costs caused by “smoke, soot, ash and debris resulting from a wildfire or brushfire” occur during the policy period.

However, this special limit of liability is not applicable where covered property at the insured premises has sustained loss or costs, including loss of use thereof, caused by “smoke, soot, ash and debris resulting from a wildfire or brushfire” if the claim for the loss or costs is reported to us within forty-five (45) days of the governmental authority’s full containment or extinguishment of the wildfire or brushfire event. Any loss or costs caused by “smoke, soot, ash and debris resulting from a wildfire or brushfire” that is not reported to us within forty-five (45) days of the full containment or extinguishment of the wildfire or brushfire event shall be subject to this special limit of liability.

HO WR 12 Page 2 of 2 02/2013 ed.

HOMEOWNERS

HO WR 12

LIMITED SMOKE, SOOT, ASH AND DEBRIS RESULTING FROM WILDFIRE COVERAGE

c. The amount shown in the Schedule for this coverage is the most we will pay for the total of all losses or costs payable under this endorsement during the policy period regardless of the number of buildings, other structures and personal property insured under this policy.

d. If there is covered loss or damage to covered property, not caused, in whole or in part, by “smoke, soot, ash and debris resulting from a wildfire or brushfire,” the loss payment will not be limited by the terms of this endorsement, except to the extent that “smoke, soot, ash and debris resulting from a wildfire or brushfire” cause an increase in the loss. Any such increase in the loss will be subject to the terms of this endorsement.

e. This coverage does not increase the limit of liability

applying to the damaged covered property or the loss of use thereof.

f. This special limit of liability is not applicable where

covered property at the insured premises has sustained any direct damage by fire.

HO AZ OSD Includes copyright material Insurance Services Office, Inc., with its permission

Page 1 of 2

OPTIONAL SPECIAL DEDUCTIBLES

NOTE: The following special deductibles apply to your policy only if the form number is listed on your Declarations page.

WINDSTORM OR HAIL DEDUCTIBLE HO 03 12 AZ

Windstorm Or Hail Deductible Percentage Amount:

Information required to complete this Schedule, if not shown above, will be shown in the Declarations.

SECTION I – DEDUCTIBLE

The following special deductible is added to the policy:

With respect to the peril of Windstorm Or Hail, for any one loss, we will pay only that part of the total of all loss payable that exceeds the windstorm or hail deductible.

The dollar amount of the windstorm or hail deductible is determined by multiplying the Coverage A Limit Of Liability shown in the Declarations by the deductible percentage amount shown in the Schedule above. This reference to the Coverage A Limit of Liability is made for the sole purpose of calculating the Windstorm or Hail Deductible.

No other deductible in the policy applies to loss caused by windstorm or hail.


THEFT DEDUCTIBLE HO 03 12 T AZ

Theft Deductible Percentage Amount:




With respect to the peril of Theft, for any one loss, we will pay only that part of the total of all loss payable that exceeds the theft deductible.

The dollar amount of the theft deductible is determined by multiplying the Coverage A Limit Of Liability shown in the Declarations by the deductible percentage amount shown in the Schedule above. This reference to the Coverage A Limit of Liability is made for the sole purpose of calculating the Theft Deductible.

No other deductible in the policy applies to loss caused by theft.


HO AZ OSD Includes copyright material Insurance Services Office, Inc., with its permission

Page 2 of 2

WATER DEDUCTIBLE HO 03 12 W AZ

Water Deductible Percentage Amount:




With respect to a covered accidental direct physical loss to property subject to this endorsement and resulting from sudden and accidental discharge, eruption, overflow or release of water from within any portion of a plumbing, heating, air conditioning or automatic fire protective sprinkler system, or household appliance, for any one loss, we will pay only that part of the total of all loss payable that exceeds the water deductible.

The dollar amount of the water deductible is determined by multiplying the Coverage A Limit Of Liability shown in the Declarations by the deductible percentage amount shown in the Schedule above. This reference to the Coverage A Limit of Liability is made for the sole purpose of calculating the Water Deductible.

No other deductible in the policy applies to water losses subject to this endorsement.


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OPTIONAL COVERAGE LIMITATIONS NOTE: The following coverage limitations apply to your policy only if the form number is listed on your Declarations page.

COMMON CONSTRUCTION REPLACEMENT COST HO CC RC AZ

We will pay the cost to repair or replace with common construction and for the same use on the premises shown in the Declarations, the damaged part of the property covered under Section I - Coverages, Coverage A - Dwelling or Coverage B - Other Structures, subject to the following:

(1) We will pay only for repair or replacement of the damaged part of the property with common construction techniques and materials commonly used by the building trades in standard new construction. We will not pay the cost to repair or replace obsolete, antique or custom construction with like kind and quality.

The terms “common construction replacement cost” and “repair or replace” do not include the increased costs incurred to comply with the enforcement of any ordinance or law.


C. Loss Settlement

Paragraph 2. is replaced by the following:

2. Buildings covered under Coverage A or B:

a. If, at the time of loss, the amount of insurance in this policy on the damaged building is 80% or more of the common construction replacement cost of the building immediately before the loss, and you contract for repair or replacement of the damaged building for the same use, within 180 days of the damage unless we and you otherwise agree, we will pay the lesser of the following amounts:

(1) The limit of liability under this policy that applies to the building; or

(2) The necessary amount actually spent to repair or replace the damaged building on a common construction replacement cost basis. However, if this amount is less than the actual cash value of that part of the damaged building, we will settle the loss on an actual cash value basis.

b. If you do not make claim under 2.a. above, we will pay the lesser of the following amounts:

(1) The limit of liability under this policy that applies to the building; or

(2) The actual cash value of the damaged part of the building.

c. If, at the time of loss, the amount of insurance in this policy on the damaged building is less than 80% of the common construction replacement cost of the building immediately before the loss, we will pay the greater of the following amounts, but not more than the limit of liability under this policy that applies to the building:

(1) The actual cash value of that part of the building damaged; or

(2) That proportion of the cost to repair or replace, without deduction for depreciation, that part of the building damaged, which the total amount of insurance in this policy on the damaged building bears to 80% of the common construction replacement cost of the building.

d. To determine the amount of insurance required to equal 80% of the common construction replacement cost of the building immediately before the loss, do not include the value of:

(1) Excavations, footings, foundations, piers, or any other structures or devices that support all or part of the building, which are below the undersurface of the lowest basement floor;

(2) Those supports in (1) above which are below the surface of the ground inside the foundation walls, if there is no basement; and

(3) Underground flues, pipes, wiring and drains.

e. If the actual cash value of the damage is less than the common construction replacement cost, then:

HO AZ OCL

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(1) We will pay no more than the actual cash value of the damage until replacement is complete. Once replacement is complete, we will settle the loss according to the provisions of 2.a. and 2.c. above.

However, if the cost to functionally repair the damage is both:

(a) Less than 5% of the amount of insurance in this policy on the building; and

(b) Less than $2,500;

we will settle the loss according to the provisions of 2.a. and 2.c. above whether or not replacement is complete.

(2) We must be notified within 180 days after the date of loss that you intend to repair or replace the damaged property.

f. Payment of loss on an actual cash value basis will not include payment of sales tax or contractor’s overhead and profit unless and until such overhead and profit is actually incurred by you.


ACTUAL CASH VALUE LOSS SETTLEMENT HO 04 93 AZ WINDSTORM OR HAIL LOSSES TO ROOF SURFACING


For purposes of this endorsement, the term “roof surfacing” means the material of the roof structure, including flashings, that is located on or above the roof decking.

This endorsement modifies the Section I – Loss Settlement Condition in the policy form with respect to a covered loss to “roof surfacing” caused by the peril of windstorm or hail. Such loss will be subject to actual cash value loss settlement. Therefore, the loss settlement conditions that pertain to "repair or replacement cost without deduction for depreciation" are changed as noted below:

C. Loss Settlement

1. Paragraph 1.(c) is replaced by the following:

(c) Structures that are not buildings, including their “roof surfacing”;

2. The following is added to Paragraph 1.:

(e) “Roof surfacing” on structures that are buildings if a loss to the “roof surfacing” is caused by the peril of windstorm or hail.

3. In Paragraph 2., the introductory statement "Buildings covered under Coverage A or B at replacement cost without deduction for depreciation, subject to the following:" is replaced by the following:

2. Buildings covered under Coverage A or B, except for their “roof surfacing” if the loss to the “roof surfacing” is caused by the peril of windstorm or hail, at replacement cost without deduction for depreciation, subject to the following:


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SEASONAL HOME ENDORSEMENT HO SH AZ

SECTION I – PROPERTY COVERAGES

Special Limit of Liability

Sudden and Accidental Discharge, Eruption, Overflow or Release of Water

The total limit of liability for Coverages A, B, C and D combined is $25,000 per policy term for any covered loss caused by a sudden and accidental discharge, eruption, overflow or release of water that occurs while you are not physically residing in the “residence premises” and are residing elsewhere. This special limit is the most we will pay for the total of all covered loss or costs payable for damage or loss arising out of sudden and accidental discharge, eruption, overflow or release of water that occurs while you are not physically residing in the “residence premises” and are residing elsewhere. This special limit does not apply when you are physically residing in and physically occupying the “residence premises”.

SECTION I – PERILS INSURED AGAINST

Paragraph A.2.c.(4) does not apply as long as the property continues to be occupied by you on a seasonal basis.

SECTION II – LIABILITY

Coverage L – Personal Liability and Coverage F - Medical Payments to Others are restricted to apply only with respect to “bodily injury” and “property damage” arising out of the ownership, maintenance, occupancy or use of the “residence premises.”

All other provisions of the policy continue to apply.

PRIVACY NOTICE

The Company is committed to carefully guarding the personal information you provide to us. The statements in this Notice apply to our current as well as former customers.

In the normal course of business, the Company may collect personal information about you, such as name, address, social security number, income, marital status, employment and other similar personal information from you on applications and other forms. The Company may also request information from other sources such as government agencies or insurance support organizations. The Company restricts access to your personal information to only employees of the Company, and others who need to know the information to provide our insurance services to you. The Company maintains physical, electronic, and procedural safeguards and has established security standards and procedures to guard your personal information from unauthorized disclosure.

Pursuant to Arizona Revised Statutes §20-2113, the Company may disclose your personal information without your prior permission to (i) enable a person to perform an insurance or business function for the Company; (ii) prevent or detect criminal activity, fraud or material misrepresentation; (iii) an insurance regulatory authority; (iv) a law enforcement or other governmental authority to protect the interest of the Company in the event of illegal activity; (v) a medical care institution or medical professional to verify coverage or benefits; (vi) a person whose only use will be in connection with marketing a product or service but only after you have been given an opportunity to direct the Company not to disclose personal information for this purpose; (vii) facilitate actuarial or research studies; or (viii) to an affiliate that only uses the information in connection with an audit of the Company or an agent or broker of the Company. The Company without your prior permission will disclose your personal information to the Company’s agents or brokers in order to allow those persons to perform their insurance functions in connection with servicing insurance products sold to you by the Company or in facilitating claims that have been made to the Company. The Company will also disclose your personal information, without your prior permission, as may be required in order to facilitate any examinations by an insurance regulatory authority or as may otherwise be required by law.

If you submit a written request to the Company, you have a right of access with respect to all personal information within 30 days of the date your written request was received. You may see a copy of the personal information relating to you and the Company will disclose to you to whom it has disclosed the personal information within two years of the date of your request to see your copy of the personal information. You may ask the Company in writing to correct, amend, or delete any information about you in our fi les. If the Company corrects, amends, or deletes the information we will notify you in writing and any person designated by you that has received the personal information within the preceding two years and any person or organization that provided the personal information. If the Company refuses to correct, amend, or delete the personal information, you have the right to fi le a concise statement of what you believe is the correct information and a concise statement of the reasons you disagree with our refusal to correct, amend, or delete the personal information. The Company will put your statement in your fi le so that anyone reviewing your fi le will see it, and we will include your statement with the personal information and any future disclosures by the Company.

Personal information about you obtained from an insurance support organization may be retained by the insurance support organization and disclosed to other persons.

In Witness Whereof, we have caused this policy to be executed and attested, and, if required by state law, this policy shall not be valid unless countersigned by our authorized representative.

President

IF YOU HAVE A COMPLAINT REGARDING TOUR POLICY, YOU SHOULD CONTACT YOUR AGENT OR THE COMPANY FIRST. IF THIS FAILS TO PRODUCE A SATISFACTORY SOLUTION TO THE PROBLEM, YOU CAN CONTACT THE DEPARTMENT OF INSURANCE, CONSUMER AFFAIRS DIVISION, 2910 N 44TH ST, STE 210, PHOENIX, AZ 85018-7269, OR CALL 800-325-2548.

To help protect your right to privacy we would like you to be aware of the following information:

When providing homeowners or dwelling fi re coverage, in addition to the information that we receive from our agent, we sometimes obtain a property inspection report. That report will typically include a diagram of your property and a color photograph which we use as an indicator of the overall exterior maintenance of the property. There are check-off questions regarding age of dwelling, roof construction, and general maintenance of the property. The organization completing the report does not ask any questions of neighbors. Their information is gathered from observation of the premises.

You don’t need to be home for the completion of the inspection. If a neighbor asks, the inspector will identify himself and briefl y explain his purpose, or he may leave a card at the residence advising the owner he has inspected the property.

You have a right to obtain a copy of the report or to be interviewed in connection with it. Upon written request, we will provide you with the name and address of the reporting company, if you desire to review the report. You have the right to discuss any inaccuracies and have them corrected.

Occasionally an insurance company may contact the company which last provided coverage and ask some routine questions about the exterior maintenance of the home and verify any losses incurred during the previous policy term. The Privacy Protection Act requires that you know this information may be disclosed to another company if a request is made in writing.

In the event of an adverse underwriting decision, you are entitled, upon written request, to know the specifi c items of information concerning your property that support the Company’s decision and the sources of the information. Your written request must be received by us within 90 business days of the date of the notice. We will respond within 21 business days of the receipt of your request.

NOTIFICATION OF INFORMATION PRACTICES

CONSUMER COMPLAINTS

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