4.3 Section I Perils Insured Against and Exclusions

Perils Insured Against

Which perils apply depends on the form. The named-peril forms reference a defined list; the open-peril forms cover everything not excluded. The list grew historically from the basic named perils, to broad, and finally to special/open.

The Named-Peril Lists

Memory aid: The HO-3 is a 'split' form — Coverage A/B run on special (open) perils, while Coverage C runs on broad named perils. The HO-5 elevates Coverage C to open perils as well.

Two Broad-Peril Traps

First, the freezing peril is covered only if the insured used reasonable care to maintain heat or shut off and drained the system in a vacant dwelling — abandon the home in winter without heat and a frozen-pipe loss is excluded. Second, theft under the broad list does not cover property stolen from a part of the residence rented to others or theft from a dwelling under construction. These conditions inside the peril definitions are tested as often as the exclusions themselves.

Also distinguish windstorm/hail from flood: wind-driven rain that enters through an opening the wind first created is covered, but rain entering an intact structure is not. Storm surge that pushes ocean water inland is flood, never windstorm — even during a hurricane.

Section I Exclusions (Concurrent-Causation Wording)

Even open-peril forms exclude a standard list. The HO program groups these and applies an anti-concurrent-causation lead-in ('We do not insure for loss... regardless of any other cause or event contributing concurrently or in any sequence to the loss'). That phrase is heavily tested — it defeats the argument that a covered peril 'also' contributed.

The excluded perils:

• Ordinance or Law (enforcement of building codes — but see the 10% additional coverage)
• Earth Movement (earthquake, landslide, sinkhole, mudflow)
• Water Damage (flood, surface water, sewer/drain backup, subsurface water)
• Power Failure (off-premises)
• Neglect (failure to protect property after a loss)
• War, Nuclear Hazard, Intentional Loss
• Governmental Action

Trap: Earthquake and flood are both excluded on every homeowners form. Earthquake is added back by the HO 04 54 endorsement (with a percentage deductible); flood is never added by HO endorsement — it requires a separate NFIP / private flood policy.

Exception Within an Exclusion

The water exclusion bars flood and sewer backup, but the policy then gives back coverage for the resulting ensuing loss in narrow cases — e.g., if excluded water causes a covered fire or explosion, the fire damage is covered. Similarly, sudden accidental discharge from a plumbing system (a burst pipe) is a covered broad peril, while continuous/repeated seepage over weeks is excluded as a maintenance issue. Distinguishing sudden-and-accidental from gradual is the most common water-claim exam question.

Mold is generally excluded except when it results from a covered water peril, and even then it is sublimited (commonly $10,000 by ISO endorsement). Sewer/drain backup is excluded on the base form and added back by the Water Back-Up and Sump Overflow endorsement (HO 04 95), typically with a sublimit such as $5,000.

The Three Water Sources — Keep Them Straight

Exam water questions almost always test which source of water is involved, because each is treated differently:

1. Flood / surface water (rising water, storm surge, overflow of a body of water) — excluded on the HO; covered only by NFIP/private flood.
2. Sewer or drain backup (water coming back up through pipes) — excluded on the base HO; added back by HO 04 95.
3. Accidental discharge (a burst pipe or overflowing appliance inside the home) — a covered broad peril on HO-2/4/6 and the open-peril HO-3/HO-5.

A single rainstorm can trigger all three, so read the fact pattern for where the water came from. Rising water from outside is flood (excluded); water backing up through a basement floor drain needs the endorsement; a pipe that suddenly bursts inside a wall is covered without endorsement. Misreading the source is the number-one wrong answer on the homeowners portion.

Reasonable-Care and Vacancy Conditions Inside the Perils

Several perils carry built-in conditions that function like mini-exclusions. The freezing peril requires the insured to maintain heat or drain the system in a vacant home; abandon a house in winter and a burst-pipe loss is denied. Theft does not cover property stolen from a part of the dwelling rented to others or from a home under construction. Vandalism and glass breakage may be suspended once a dwelling is vacant beyond 60 days. These conditions appear inside the peril definitions, so an item can be "covered peril, denied claim" because the insured failed a care condition.

Earthquake and Flood Are Both Excluded - Add Them Differently

The single most-tested exclusion pair is earth movement and water damage. Earthquake is excluded but can be added by the HO 04 54 endorsement with a percentage deductible. Flood is excluded and cannot be added by any HO endorsement - it requires a separate NFIP or private flood policy. Sewer and drain backup is excluded on the base form and added back by HO 04 95. Keeping the three water sources - flood, backup, accidental discharge - separate is the highest-value water-claim skill on the homeowners portion.