Topics covered:

Introduction

Special limits of liability

Additional coverages

Perils insured against

Summary

Introduction

 Personal property, as well as buildings, may be covered on an open perils basis through use of ISO form HO 00 05. This form replaces the previous use of form HO 00 03 04 91 with the HO 00 15 special personal property coverage attached. The 2011 Form HO 00 05 contains the same revisions made to the HO 00 02 05 11 and HO 00 03 05 11, and is written in the same format. For example, the limitation of coverage for property in a self-storage facility to 10 percent of coverage C, or $1,000 (whichever is greater) that appears in the 2011 HO 00 02 and HO 00 03 also appears in the HO 00 05.

 Special Limits of Liability

 Three categories of personal property—those limited for loss by theft—have expanded coverage so that loss by theft, misplacing, or losing are included. The categories are jewelry, watches, furs, precious and semiprecious stones; firearms and related equipment; and silverware, silver-plated ware, goldware, gold-plated ware, platinumware, platinum-plated ware and pewterware. The HO 00 03 provides named perils coverage for personal property, so if jewelry is lost or misplaced there is no coverage at all. The HO 00 05 provides open perils for personal property, so the restriction simply limits coverage if the item is lost or misplaced. Otherwise, unless it falls under an exclusion, the property is covered. The amounts for these three categories are respectively $1,500, $2,500, and $2,500. Scheduled coverage should be arranged for insureds desiring greater amounts of insurance on such items. The remaining special limits are identical between policies.

Additional Coverages

 Under the HO 00 05, coverage for landlord's furnishings is limited to named perils. This is the same coverage in the HO 00 03, but because the HO 00 05 provides open perils for personal property, the named perils must be listed here in order to restrict coverage. Coverage is restricted because the property is located in a rented part of the dwelling. As the insured is not the one living there, the chance for damage is greater depending on the tenant at the time.

 Perils Insured Against

 The HO 00 05 provides open perils coverage by stating that the insurance applies to “risk of direct physical loss to property described in Coverages A, B and C” and then modified this broad statement through exclusions applicable to Coverages A, B, and C; Coverages A and B, and Coverage C. The exclusions to open perils are in a slightly different order between the two policies, and the vandalism section appears under coverages for A and B only, but the coverages are the same. Contents on the HO 00 05 are not insured for named perils coverage but insured for anything not otherwise excluded. So, for example, if rain entered an open window and damaged a sofa's silk upholstery, the unendorsed HO 00 03 would not respond, but the HO 00 05 would.

 Since personal property is on open perils coverage in the HO 00 05, changes to the open perils are made. The HO 00 05 does not cover breakage of “eyeglasses, glassware, statuary, marble, bric-a-brac, porcelains and similar fragile articles other than jewelry, watches, bronzes, cameras and photographic lenses.” (However, if such items as statuary or porcelains are scheduled, coverage for breakage may be added for an additional premium.) But, if the breakage results from fire, lightning, windstorm, hail, explosion, riot, civil commotion, aircraft, vehicles, collapse of a building, theft or attempted theft, smoke, or rupture of a steam or hot water appliance or system, it is covered.

 Not covered is damage due to dampness of atmosphere or extremes of temperature unless caused directly by rain, snow, sleet or hail; refinishing, renovating, repairing property other than jewelry, watches and furs; collision other than collision with a land vehicle, sinking, swamping or stranding of watercraft including trailers, furnishings equipment and outboard engines or motors. The insured can readily moderate climate within the dwelling. Sinking, stranding and the other perils while typical perils for boats aren't really what the homeowners form is designed to covered; such property should be placed on a watercraft policy.

 Also excluded is acts or decisions, including the failure to act, of any person, group, organization or governmental body. This in included in the HO 00 03, but in the HO 00 05 is appears under the coverage exclusions for personal property coverage separately from the general exclusions, where it appears as well.

 The HO 00 05, remember, provides open perils coverage for both dwelling and contents. There are certain section I exclusions (B.1, B.2, and B.3) in both the HO 00 03 and HO 00 05 that apply to coverages A and B. But in the HO 00 05, some of these exclusions are modified to apply to personal property as well. The water exclusion is modified to provide an exception for personal property that is away from a premises or location owned, rented, occupied or controlled by an “insured”. So if an insured was visiting a friend and left his laptop there and the laptop was then damaged by water, there would be coverage. The exclusion does apply to property owned, rented, occupied or controlled by an “insured” even if weather conditions contribute to produce the loss.

Summary

 The HO 00 05 is similar to the HO 00 03 except for the open perils coverage for personal property. Many insureds unfamiliar with insurance assume all their property is covered the same way. The HO 00 05 makes it easy to provide this coverage for insureds while providing the standard coverages for the home itself.