4.3 Section I Perils Insured Against and Exclusions

4.3 Section I Perils Insured Against and Exclusions

Section I perils determine when a loss is paid at all. Two structures appear across the HO program: named-perils language (HO-2, HO-4, HO-6, and HO-3/HO-5 personal property) listing the specific covered causes, and open-perils language (HO-3 dwelling, HO-5 everything) covering any cause of loss except those excluded. The exam tests (1) which form uses which approach, (2) the named-perils list, and (3) the standard exclusions that apply even under open-perils coverage.

Under open perils, coverage is broadest because the insurer must prove an exclusion. But open perils is not unlimited — every exclusion below still bites.

The Broad Named-Perils List

The HO broad form perils (used for HO-2 and for personal property under HO-3) expand the basic list. A common mnemonic groups them; the testable set includes:

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
9. Theft
10. Falling objects
11. Weight of ice, snow, or sleet
12. Accidental discharge/overflow of water or steam (plumbing, HVAC, appliance)
13. Sudden & accidental tearing apart/cracking/burning/bulging of a heating/AC/water system
14. Freezing of plumbing/HVAC/appliances
15. Sudden & accidental damage from artificially generated electrical current
16. Volcanic eruption

The basic form (HO-8) covers a shorter list and typically limits or omits some of these. Note: water damage here means internal plumbing/appliance discharge — NOT flood or sewer backup.

Section I Exclusions (Apply Even Under Open Perils)

These are the most-tested exclusions; many are removable by endorsement:

The Concurrent-Causation Trap

The exam loves the water trap. A storm dumps rain; the home floods from rising surface water AND wind also tears the roof. Wind damage is covered; flood is excluded even when a covered peril contributes — the HO forms use an anti-concurrent-causation lead-in stating that excluded causes are excluded whether or not another cause contributes concurrently or in sequence. So:

• Wind-driven rain entering through a wind-created opening → covered (wind made the opening).
• Surface water rising into the basement → excluded (flood), buy NFIP.
• Sewer backing up through floor drains → excluded unless the water backup endorsement is added.
• A burst supply pipe (sudden & accidental) → covered named peril; the resulting water damage is paid, though the worn pipe itself may not be.

Ensuing Loss, Theft Restrictions, and Vacancy

Several exclusions are paired with an ensuing-loss exception: the original cause (e.g., faulty workmanship, defective construction, a leaking pipe from wear) is excluded, but a resulting covered peril is paid. A poorly built wall is not covered, but if that defect lets a fire start, the fire damage is covered.

Watch the theft restrictions in named-perils forms: theft is generally not covered for property in a dwelling under construction (no occupancy yet) or for property stolen from a part of the residence rented to others. Theft of property away from the residence has its own conditions and the off-premises Cov C sub-limit. Finally, certain perils are suspended when the dwelling is vacant beyond a stated period — vandalism, glass breakage, and water/freezing losses can be excluded once the home has been vacant (commonly more than 60 consecutive days), because vacancy materially increases the hazard.

The Section I Exclusions, Read in Order

The HO Section I exclusions apply even under the open-peril dwelling coverage and are introduced with anti-concurrent-causation language: Ordinance or Law; Earth Movement; Water Damage (flood, surface water, sewer/drain backup, subsurface water); Power Failure (off-premises); Neglect; War; Nuclear Hazard; Intentional Loss; and Governmental Action.

Two more — faulty planning/workmanship/maintenance and weather conditions that combine with an excluded cause — round out the list. Several pair with ensuing-loss exceptions: if an excluded cause leads to a covered peril (e.g., faulty wiring causing a fire), the ensuing fire loss is covered.

The Concurrent-Causation Trap and Theft Restrictions

The concurrent-causation doctrine once forced insurers to pay when a covered and excluded peril combined; ISO responded with the lead-in clause "regardless of any other cause or event contributing concurrently or in any sequence," so a mudslide that follows heavy rain is excluded earth movement/water even though rain alone might be covered.

Theft has its own restrictions: loss by theft is not covered while the dwelling is under construction (until completed and occupied), and theft of property from a part of the residence rented to others is excluded. These overlay the Coverage C theft sublimits, so a stolen-jewelry question can be reduced twice — once by the sublimit, once by a residence-rented exclusion.