4.3 Section I Perils Insured Against and Exclusions

4.3 Section I Perils Insured Against and Exclusions

Section I tells you what causes of loss are covered through the Perils Insured Against provision and what is removed through the Exclusions. The structure depends on the form: HO-3 is OPEN perils on Coverages A and B and NAMED perils on Coverage C; HO-2/4/6 are NAMED perils throughout; HO-5 is OPEN throughout.

The Named-Perils List (Coverage C, and all of HO-2)

These are the causes of loss that must be listed to be covered. Memorize them:

1. Fire or lightning
2. Windstorm or hail
3. Explosion
4. Riot or civil commotion
5. Aircraft
6. Vehicles
7. Smoke
8. Vandalism or malicious mischief (VMM)
9. Theft
10. Falling objects (broad-form only)
11. Weight of ice, snow, or sleet (broad-form only)
12. Accidental discharge or overflow of water/steam
13. Sudden/accidental tearing apart, cracking, burning, bulging of a system
14. Freezing of plumbing/heating/AC
15. Sudden/accidental damage from artificially generated electrical current
16. Volcanic eruption

How open perils changes the burden of proof

Under an OPEN-perils Coverage A (HO-3, HO-5), the loss is covered unless the policy excludes the cause. The insured only has to show a direct physical loss occurred; the insurer must prove an exclusion applies. Under NAMED perils, the insured must show the cause is one of the 16 listed perils. This burden-of-proof flip is a favorite exam distinction.

Named-peril nuances the exam tests

Several listed perils carry conditions. Theft does not cover property stolen from a dwelling under construction or from a part of the premises rented to others. Vehicles as a peril excludes damage caused by a vehicle owned or operated by a resident of the household when it strikes the dwelling. Vandalism is suspended if the dwelling has been vacant for more than the policy's stated period (commonly 60 days). Freezing of plumbing is covered only if the insured kept heat on or drained the system. These carve-outs convert a covered peril into a denied claim, so read the fact pattern for the condition.

Section I Exclusions (the "big eight" + others)

These causes are excluded on EVERY HO form regardless of peril basis:

Also excluded: governmental action, weather conditions that worsen an excluded cause, and (under open perils) wear and tear, mold, settling, animals owned by the insured, and faulty construction/design.

Flood is the classic trap

Flood (rising surface water) is EXCLUDED on every homeowners form. Flood coverage comes only from a separate NFIP / National Flood Insurance Program policy or a private flood policy. By contrast, water that backs up through a drain or sump can be added by the HO 04 95 (Water Back-Up and Sump Overflow) endorsement — but a true flood from a swollen river is never covered by an HO endorsement.

Anti-concurrent causation

The Section I exclusions are introduced by a powerful lead-in: the listed causes are excluded whether or not another cause contributes concurrently or in any sequence to the loss. This anti-concurrent causation language means that if an excluded peril (such as flood or earth movement) joins a covered peril to produce damage, the entire loss may be excluded. The exam tests this with a hurricane fact pattern: wind damage (covered) and storm surge flooding (excluded) hit the same home; the wind portion is paid, but the surge-driven damage is denied because flood is excluded even when wind contributed.

Earth movement and the endorsable exclusions

Earth movement — earthquake, landslide, mudflow, and sinkhole collapse — is excluded but can be bought back with the Earthquake endorsement (HO 04 54), which adds its own percentage deductible. Two exclusions can be partly restored: water back-up via HO 04 95, and ordinance or law beyond the built-in 10%. Power failure is excluded only when the interruption begins off the residence premises; if a covered peril on the premises knocks out power and food spoils, limited coverage may apply. Knowing which exclusions are absolute and which are endorsable separates passing from failing scores.