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Since neither the form nor endorsement indicates whether coverage is provided for part-time or full-time rentals, standard practice is to go in favor of the insured. So the property could be rented full or part time. Remember however, that there are vacancy provisions in most property policies that could eliminate coverage if the residence was left vacant for sixty days or more.

Details determine the extension of coverage

Question: The homeowners' policy in question covers the residence premises listed on the declarations page. If the named insured is no longer a resident at the listed location when a fire destroys the dwelling, I was told at a CIC seminar that there would be no coverage. But then I questioned whether the liability section of the HO-3 would still provide coverage. The answer I received from the instructor was that the named insured would still be covered under the liability section since there is no territorial limitation. However, the policy defines “insured location” as the residence premises listed on the declarations page as well as other location such as vacant land. If the named insured is no longer residing at the listed location, wouldn't liability coverage also cease not only at the residence premises but in total since liability coverage emanates from the residence premises?

— Hawaii Subscriber

Answer: It depends on the exact nature of the loss. If the loss arises out of a premises owned by, rented to, or rented to others by an insured that is not an insured location, so there is no coverage. If someone is injured at a house the insured is renting, but that house is not the one listed on the dec, there is no coverage. However, if an insured is walking his dog and the dog bites a passerby, there is coverage. The definition of “insured” is not relative to the residence premises on the policy.

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Vacant land liability coverage

Question: Our insured has a Homeowners HO0003 policy. The insured has vacant land that he owned that was not listed as a primary residence or “other residence” on his policy. A tree fell from this vacant land causing property damage to the owner of the adjacent property. Would there be liability coverage for this loss?

— Massachusetts Subscriber

Answer: Vacant land doesn't have to be listed on the homeowner's policy. It is considered part of the “insured location” by definition as long as it is not farmland and is owned by the insured. Coverage up to policy limits would apply under personal liability if the insured was found legally liable for the loss, or coverage under damage of property to others would apply for the limit of $1000.

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Coverage for home under construction

Question: Our insured is a homeowner who is acting as his own general contractor in building his new home. Does he need to buy any additional liability coverage to cover his liability at the location of the new home?

— Florida Subscriber

Answer: The insured does not need to buy the additional residence endorsement. The homeowners policies define an “insured location” as including any “land owned by or rented to an insured on which a one or two family dwelling is being built as a residence for an insured.”

Because the location of the new home is an insured location, your insured has section II coverage for injuries or damages arising out of the home's construction. The endeavor of building one's own home is a personal, not business, pursuit.

However, the homeowners policy provides no workers compensation coverage. If your insured is hiring subcontractors to do some of the work, he should get certificates of insurance from them indicating that they are carrying workers compensation coverage.

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When the insured rents an events facility

Question: My question pertains to the HO-3 ISO homeowners form in regards to the liability portion of the policy.

If a named insured would rent out a building (like Knights of Columbus hall, pavilion, church, or reception hall), would the liability coverage extend from the homeowner policy? Especially in regard to liquor being served, would there be coverage in regard to the host liquor liability?

The way I read the policy, there would be no property damage coverage to the rented location unless there is damage caused by fire, smoke, or explosion.

— Illinois Subscriber

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Answer: This involves the definition of “insured location,” which includes “any premises used by you in connection with a premises described in a. and b.” — a and b are the residence premises, which is the property where the insured resides, or other premises used as a residence and shown in the declarations or newly acquired. While the policy states that injury or damage arising out of a premises rented to an insured is not covered, this applies only if the location is not an insured location. A hall, restaurant, or other facility rented for an event can be considered to be a premises used in connection with the residence premises. There is no exclusion for host liquor liability on the ISO HO 00 03 05 11.

You are correct in that property damage is excluded other than for loss caused by fire, smoke, or explosion.

See also:

5 vexing insurance claims involving damaged windows or glass

Will business income insurance cover these 7 losses?