Supplemental coverage limits

Additional policy provisions

Optional endorsements Covered Causes of Loss

Subject to all applicable provisions of this policy, property covered under Coverages A and B and Coverage C is insured for fortuitous direct physical loss, as follows:

A. Coverages A and B

That is not otherwise excluded or limited by this policy

B. Coverage C

That results from the following described causes of loss:

• Fire (hostile fire) or Lightning.
• Bursting of Fixtures: sudden accidental bulging, burning, cracking, or tearing apart of air conditioning or heating equipment, or home water heating appliances.
• Electricity: sudden accidental damage from an electrical current.
• Explosion.
• Falling Objects: damage to other property caused by falling objects.
• Freezing: freezing of air conditioning, heating, or plumbing equipment, or home appliances.
• Riot or Civil Commotion.
• Smoke: sudden accidental damage from smoke.
• Theft: theft or attempted theft, including disappearance of property from a known place if it is probable that the property was stolen.
• Vandalism: malicious damage to property.
• Vehicles or Aircraft.
• Water Damage: accidental discharge or overflow of water or steam – other than that caused by freezing – from within air conditioning, heating, or plumbing equipment, or home appliances on the residence premises.
• Weight of Ice, Sleet, or Snow: damage to other property within a building caused by the weight of ice, sleet, or snow.
• Wind or Hail.

Analysis

The covered causes of loss section is unique in that it simply lists the covered perils; exclusions to said perils are found in the MPL 01 common provisions form. Coverages A and B are open perils; unless the peril is excluded, there is coverage. This is standard for most homeowner policies. Like most policies coverage C is named perils, and while many are the typical perils, some are different. The fire or lightning peril specifies that the fire must be a hostile fire. A hostile fire is a fire that has escaped from its intended physical location, or was not started intentionally.

Bursting of fixtures is the next peril; accidental bulging, burning, cracking, or tearing apart of air conditioning or heating equipment, or home water heating appliances is covered. This is straightforward; if the hot water heater ruptures or cracks, there is coverage for that damage.

The electricity peril covers loss that is caused by sudden accidental damage from an electrical current; however electrical current is not defined. When you refer to the MPL 01 form, the exclusion states that damage caused by artificially generated electrical current that damages transistors, computers, or similar items or components is excluded. This includes increases or decreases in currents caused by brownouts, power surges, or spikes. Therefore, what is covered is naturally generated current, or artificially generated current as long as it does not damage certain items. A lightning strike to the house is covered. If a wall socket shorts the resultant fire is covered too; it is an artificially generated current, but it is not affecting transistors, computers, or other electrical components.

Explosion is left undefined and unrestricted, so anything that can be construed as an explosion is covered. Merriam Webster online defines explosion as "a large-scare, rapid, or spectacular expansion or bursting out or forth". A gunshot can be considered an explosion since the bullet bursts forth from the barrel. If an insured is cleaning his gun and accidentally shoots the television, coverage is available.

Falling objects is the next peril and simply states that damage to other property caused by falling objects is covered. However, in reviewing MPL 01, there is an exclusion for damage caused by a falling object unless the object first penetrates the roof or exterior wall structure. Therefore the bust of Uncle George falling off the mantel and damaging a table is not covered, however if a meteor breaks through the roof and damages the table, there is coverage.

Freezing is another peril that has exclusions in the MPL 01 form. The freezing of air conditioning, heating, plumbing equipment or home appliances is covered. There is an exclusion in MPL 01 for such damage if the property is unoccupied, vacant, or under construction. The standard exception applies if the insured has maintained adequate heat in the building or such appliances or equipment have been drained and the water supply turned off.

Riot and civil commotion are standard perils and like the explosion peril, are undefined and extremely broad. Merriam Webster online defines riot as "a public violence, tumult or disorder, or a tumultuous disturbance of the public peace by three or more persons assembled together and acting with a common intent". Commotion is defined as "a condition of civil unrest or insurrection". The Occupy Wall Street supporters caused a civil commotion.

Smoke is another peril that is left undefined; sudden and accidental damage from smoke is covered. The exclusion in MPL 01 applies to smoke from agricultural or industrial activities. Therefore all other forms of smoke are covered.

Theft, another standard peril, includes the disappearance of property from a known place if it is probable that the property was stolen. This allows the insured to file a claim without necessarily having to file a police report. If an insured rides his bike to the park to meet friends and forgets to lock his bike to the bike rack, and upon returning finds the bike missing, it is likely that the bike was stolen. The bike is therefore covered. Excluded in form MPL 01 is theft committed by an insured, tenants, employees, or any other residents of the household. The form is not going to pay for the insured stealing from himself. Likewise the theft of furs, jewelry, money, securities, or silverware from any part of the premises that is rented is excluded. Valuables should be locked up since some tenants may not be able to resist temptation. When a dwelling is under construction building materials are excluded since they can be readily stolen from a worksite. If property is stolen from another residence that the insured owns, rents, or occupies, theft is excluded unless the insured is temporarily residing at the premises. If the insured inhabits the beach house only on occasion, it becomes attractive to thieves once they have discovered that the insured is not present. Also excluded while away from the residence premises is the theft of campers, trailers, or  watercraft, including accessories and equipment. These items are portable and easily stolen.

The policy states that vandalism is malicious damage to property; excluded on the MPL 01 is vandalism if the residence premises has been vacant for 30 consecutive days or more, or the vandalism is caused by an insured, tenants, or other residents of the household. Note that the vacancy must be continuous for 30 days; if the insured stays in the house with some furnishings for just one weekend that resets the 30-day requirement. Vacancy is often confused with the concept of unoccupancy. When a property is unoccupied, furniture, clothes, and other essentials for living may be in the house, but the insured is not currently living there. This is different than vacancy; when a property is vacant, there is nothing in the house; no furniture, clothes, dishes, or supplies. No one lives there, and the property is empty.

Vehicles and aircraft are covered perils and this is very broad. There are no exclusions or limiting factors; if an insured loads a dresser on to a truck, and in transporting the dresser to the refinisher's the dresser falls out of the truck, the damage to the dresser is covered since a vehicle caused the damage.

Other than that caused by freezing, the accidental discharge or overflow of water or steam from within air conditioning, heating, plumbing equipment or home appliances on the residence premises is covered. Exclusions listed in MPL 01 are for water or sewage that backs up through sewers or drains, overflow of sumps, or the discharge of sewers or water mains off the residence premises. Also excluded is underground, subsurface or surface water that exerts pressure on or flows, seeps, or leaks through walls, doors, driveways, windows, foundations, floors, pools, or other openings. Plumbing equipment is that which brings potable water into the home and carries used water away from the home into the sewer system. However, if an ensuing loss is caused by fire, explosion, glass breakage, or theft, that loss is covered.

The next peril is damage to other property within a building caused by the weight of ice, snow or sleet. Damage to bulkheads, docks, drains, driveways, flues, fences, foundations, patios, pavements, piers, pools, retaining walls or wharves caused by freezing, thawing, or the pressure or weight of ice, snow or sleet is excluded. It is natural for freezing and thawing of ice to push on concrete and other solid objects and potentially cause a loss; the weight of snow or sleet can have similar effects, and is excluded.

Wind or hail is the last named peril and like other perils, is not defined. The MPL 01 contains an exclusion for damage to campers, trailers or watercraft, including equipment, motors, or parts caused by wind or hail when the items are not in a fully enclosed building. Anything left outdoors is subject to the weather; it is the insured's responsibility to protect his property.

 2. Coverage C Special Limits

The limits shown below are the maximum per occurrence limit for that category. Any revised limits are shown elsewhere in this policy.

1. Campers and trailers (not used with watercraft) . . . . . ….. . . . . . . . . . . . . . . . $ 1,000
2. Computers while off the residence premises . . . . . . . . . . . … . . . . . . . . . . . . . . $ 3,000
3. Furs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ……… . . . . . . . . . . . . $ 1,000
4. Guns and accessories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . …… . . . . . . . . . . . . . $ 2,000
5. Grave markers . . . . . . . . . .. . . . . .. . . . . .. . . . . .. . . .. . . . . . . . .. . . . . . . . . .. . . . $ 1,000
6. Jewelry, watches, precious and semiprecious stones . . . .. . .  . . .. . . . . . . . . . . $ 500
7. Money . . . . . . . . . . . .. . . . . . .. . . . . . . . . .. . . . . .. . . . . .. . . . . .. . . . . .. . . . . . . . . . . $ 100
8. Property used or procured for use in business. . . . . . . . . . . . . . . . . . . . . . . . . $ 3,000

Only 15% of the limit can be applied to property off the residence premises.

This limit does not apply to property held for sale.

1. Property in an apartment rented or held for rental to others . . . . . . . . . . . $ 1,000
2. Securities . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . $ 2,000
3. Silverware . . . . . . . . .. . . . . . . . .. . . . . . . .. . . . . . . .. . . . . . .. . . . . . . . . . . . . . . . . $ 3,000
4. Watercraft and their equipment, motors, parts, or trailers . . .  . . . . . . . . . . $ 1,000

Analysis

The special limits are the maximum limits of coverage for specified items. Certain items that are particularly valuable, or easily damaged or stolen should be scheduled with a specific value. These limits provide basic coverage for these items. Notice that the limit for computers is for computers while off the residence premises; computers off the premises are more likely to be stolen or damaged, therefore a limit applies. There is no limit for computers on the residence premises. An insured may have thousands of dollars worth of jewelry; the basic rate for homeowners contents does not contemplate that exposure, so coverage is at a minimum. Expensive amounts of jewelry should be scheduled. Likewise it is difficult for an insured to prove that he had $100,000 stuffed in the mattress that burned; only $100 worth of money is covered; for security large sums of cash should be put in a bank, or at least a fireproof safe.

Property used for business is also limited, and particularly when the property is off the residence premises. This is a homeowners policy, and if an insured has a large business then that property should be covered on a business policy. As mentioned earlier, property in an apartment rented to others has a higher risk of damage, therefore coverage for such items is limited. Watercraft of any significance should be on a boat policy.

3. Supplemental Coverage Limits

The limits shown below are the maximum per occurrence limit for that category. Any revised limits are shown elsewhere in this policy.

Section I – Property

1.B. Lawns and Decorative Plants, Shrubs, and Trees Coverage Per Occurrence Total  .$ 2,000

Limit Per Plant, Shrub, or Tree . . . . . . . . ……………. . . . . . .. . . . … . . . .. . . . . . . . . . .. . . . . . $ 300

1.C. Water Damage Expense Coverage . . . . . . . . . …………….. . . . . . . . . . . . . . . . . . . . . . . . $ 100

3.B. Computer Media and Computer Software Coverage . . …….. . . . . . . . . . . . . . . . . . . . $ 3,000

4. Credit Card Coverage . . . …. . . ….. . . . . . . . . … . . . . … . . .. . . …. . . . . . . . . . …. . . . . . $ 2,000
5. Debris Removal Coverage
6. Additional limit for Coverages A, B, or C . . .. …. . … ….. ………………… . . 10% of Coverage A
7. Additional per occurrence tree debris removal limit . . . . . . ……………………. . . . . . . . $ 300
8. Fire Expense Coverages
9. Fire Department Service Charge . . . . . . . . . . . . . . . . . . . . . . ……………………. . . . . . . . . $ 500
10. Fire Extinguisher Recharge Expense . . . . . . . . . . . . . ………………… . . . .. . . . . . . . . . . . $ 500
11. Loss Assessment Coverage . . . . . . . . . . . .. . . . . . ………….. . . . . . . . . . . . . . . . . . . . . . $ 5,000
12. Portable Electronic Equipment, Cassette Tapes, Compact Disks, and Other Media Coverage . . ……………………………………………………………………………………………………………………… . . $ 200
13. Work Interruption Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . …………….. . . . . . . . . . $ 2,000
14. Building Code or Law Coverage (see below) . . . . . . . . . . .  . . . . . . . . . . . . 10% of Coverage A
15. Lock Replacement Coverage (see below). . . . . . . . . . . . . . …………… . . . . . . . . . . . . . . $ 250

Section II — Liability

2. Damage to Property of Others Coverage (form MDL 2) . . . . …………… . . . . . . . . . . . $ 500

9 Loss Assessment Coverage. . . . . . . . . . . . . . . . . . . . . . . . . …………… . . .  . . . . . . . . . . . $ 5,000

Analysis

The supplemental limits are similar to the special limits in that they are the maximum limits for certain coverages. These are extra coverages, and as such do not have large limits. Except for building code or law, and lock replacement coverage, the coverages themselves are explained in the discussion of MPL  01 Common Provisions form.

4. Additional Policy Provisions

1. Owner Occupancy

Unless otherwise agreed to in this policy by us, it is understood that the covered dwelling is owned and customarily occupied by you and this is the condition of hazard and use that we undertake to insure under this policy.

B. Section I B — Supplemental Coverages

Coverages 11 and 12 are added:

11.Building Code or Law Coverage

(a) Coverage A is extended to cover the loss or expense described in (1), (2), and (3) that ensues as a direct consequence of a covered loss at the residence premises. We cover such for an amount determined by applying the applicable factor shown in Supplemental Coverage Limit      11 (above) to the Coverage A limit of liability shown in the Declarations. The losses or expenses covered are:

(1) The loss caused by enforcement of any building, land use, or zoning code or law in force on the date of the covered loss, that:

• Requires the demolition of parts of the same property not damaged by a covered cause of loss.
• Regulates the construction or repair of buildings.
• Establishes the building, land use, or zoning requirements at the described premises.

(2) The increased expense you incur to construct, rebuild, or repair the property caused by enforcement of building, land use, or zoning code or law in force on the date of the covered loss. The property must be intended for the same use or occupancy as the current property unless otherwise prohibited by such code or law.

(3) The expense you incur to demolish undamaged parts of property and clear the site of such parts, caused by enforcement of building, land use, or zoning code or law inforce on the date of the covered loss.

(b) We are not liable for payment under this Supplemental Coverage:

(1) Until the property is repaired or replaced by you or us as soon as possible after the loss at the same premises. The repair or replacement must be made within the time period described in condition 2.B.1 – Replacement Coverage of Section I E – Conditions in form MPL 01. We may waive, in writing, the requirement to replace at the same location if building laws prohibit replacement at the described location, or for any other reason acceptable to us.

(2) For any loss or expense arising out of the enforcement of any code, directive, law, ordinance, or regulation requiring any insured or others to clean up, contain, detoxify, monitor, neutralize, remove, test  for or treat asbestos, or any pollutants.

(c) Our maximum liability under this Supplemental Coverage (items (a) (1), (2), and (3) combined), subject to the limit of liability shown in the Declarations and the limitations on our liability described in Condition 2 – How Losses are Settled of Section I E – Conditions in form MPL 01, is the sum of the following:

(1) The cost to demolish the property and clear the site, and

(2) The cost to reconstruct or replace the property on the described premises.

(d) This Supplemental Coverage does not apply to buildings or structures insured on an actual cash value basis.

Analysis

The additional policy provisions are just that; provisions that do not readily fit in the coverage or condition sections of the policy. The first provision is that the dwelling is owned and occupied by the insured unless separately agreed to by the carrier. This policy was provided based on this assumption. A property that is not owner occupied is not always maintained as well as when the owner is the primary resident; hence the provision that rates are based on the assumption that the owner is present and maintaining the property.

A supplemental coverage for building ordinance or law coverage is added. This provides coverage for expenses caused by the enforcement of any building, land use or zoning codes that require the demolition of parts not damaged by the loss, regulates the construction or repair of a building, and establishes the building, land use, or zoning requirements at the described premises. This coverage does not apply to structures insured on an actual cash value basis. Expenses include the increased expense of construction, rebuilding, or repair of the property caused by enforcement of a law or code; the property must be intended for the same use or occupancy as before the loss. If the insured had a one family dwelling he cannot now build a four family dwelling with the intention of renting the extra units since that is not what was originally insured. This applies unless there is a code or law prohibiting such rebuilding. Expenses incurred to demolish undamaged parts of the residence caused by enforcement of a code are also covered.

Note that the carrier is not liable for payment until the property is repaired or replaced as soon as possible and at the same premises after the loss. The repair must be made in the time frame stipulated in MPL 01condition 2.B.1 – Replacement Coverage of Section I E – Conditions, 180 days. In order for the building to be moved to a different location, the carrier must approve the relocation in writing. The location is part of the underwriting the policy; the carrier may have different underwriting requirements if the insured moves the dwelling into a flood plain, and that was not the criteria under which the dwelling was originally written.

The pollution exclusion is reiterated here; the carrier is not responsible for payment for clean up, containment, detoxifying, monitoring, neutralizing, removal or test of any pollutants required by the enforcement of any ordinance, code, or law.

The maximum liability is subject to the limit present on the declarations and is the sum of the cost to demolish the property and clear the site and the cost to reconstruct or replace the property on the described premises.

12. Lock Replacement Coverage

We will pay, up to the limit shown above for Supplemental Coverage 12, the reasonable, necessary expenses incurred to replace or rekey locks at the residence premises. Coverage applies only if an insured's keys have been stolen. No deductible applies to this coverage.

1. Section I D — Losses Not Insured
2. Exclusion 13. B. (1) does not apply.
3. The following exclusion is added:

Other Than Owner Occupancy Exclusion

We do not provide insurance for a covered dwelling that is not owned and customarily occupied by you.

If MPL 150 is listed in the Declarations, this exclusion does not apply.

1. Section II D — Liability Not Insured

The following exclusion is added:

Other Than Owner Occupancy Exclusion

We do not cover bodily injury or property damage arising out of a covered dwelling that is not owned and customarily occupied by you.

If MPL 150 is listed in the Declarations, this exclusion does not apply.

Analysis

The supplemental lock replacement coverage is explained. The coverage applies the necessary and reasonable expenses to replace or rekey locks at the residence premises. In order for coverage to apply the insured's keys must have been stolen; there is no coverage if the insured simply misplaced or lost his keys. There is no deductible for this coverage.

If the dwelling is not owned or customarily occupied by the named insured, there is no coverage. The policy is not designed for rental properties. However, if MPL 150 is listed in the declarations this exclusion does not apply.

Likewise, bodily injury or property damage arising out of a covered dwelling that is not owned or customarily occupied by the named insured is not covered. Again, MPL 150 removes this exclusion if it appears on the declaration.

Optional Endorsements

A. Townhouse or Row House — Endorsement MPL 67, MPL 68, or MPL 69

If endorsement MPL 67, MPL 68, or MPL 69 is listed in the Declarations, it is understood by us that the covered dwelling is part of a row house or townhouse complex: MPL 67 – up to 4 units; MPL 68 – 5 to 8 units; MPL 69 – 9 or more units.

B. Protective Devices — Endorsement MPL 70

If endorsement MPL 70 is listed in the Declarations, the premium reflects installation of a smoke detector, or other protective devices or systems. You agree that you, and those you designate to care for the premises, will maintain all such in active working order, and to immediately notify us of any change in such status.

C. Seasonal Use — Endorsement MPL 72

If endorsement MPL 72 is listed in the Declarations, it is understood by us that the covered dwelling is customarily occupied on a seasonal basis.

D. Gated Community – Endorsement MPL 73

If endorsement MPL 73 is listed in the Declarations, the premium has been modified to reflect that the covered dwelling is part of a gated community or part of a gated community with security patrol.

E. New Dwelling – Endorsement MPL 76

If endorsement MPL 76 is listed in the Declarations, the premium has been modified to reflect the age of dwelling as made known to us by you.

Analysis

Unique to MSO is the concept of trigger endorsements. These are endorsements that are preprinted in the main policy forms, and their coverage is activated if the endorsement number is shown on the declarations. Endorsements MPL 67, 68, and 69 modify the policy to indicate that the dwelling is part of a row house or townhouse complex. MPL 67 indicates up to 4 units, MPL indicates 5 to 8 units, and MPL 69 indicates 9 or more units. If none of these endorsements are listed on the declarations, then it is understood that the dwelling is a stand-alone home. If one of these endorsements is added, then that endorsement applies.

Endorsement MPL 70 reflects installation of a smoke detector or other protective device and that this is reflected in the premium. The insured agrees that he will maintain such devices in working order, and notify the carrier of any change in status.

Endorsement MPL 72 indicates that the dwelling is used on a seasonal basis. New in the 2010 form is Gated Community Endorsement MPL 73. This indicates that a discount in premium has been provided since the dwelling is either part or a gated community or a gated community with a security patrol. This reduces the risk of theft and break-ins on the property.

Endorsement MPL 76 indicates that the premium has been modified to reflect the age of the dwelling; this is used for newer homes.