Section I Perils Insured Against and Exclusions

Perils Insured Against

Section I coverage depends on whether the form is named-peril or open-peril.

Named-peril forms (HO-2, and Coverage C of HO-3) list the perils that trigger coverage. The classic 16 broad-form perils are:

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
13. Sudden/accidental tearing apart, cracking, burning, or bulging of a heating/AC/sprinkler system
14. Freezing of plumbing/heating/AC systems
15. Sudden/accidental damage from artificially generated electrical current
16. Volcanic eruption

The first 10 or 11 are the basic-form (HO-1, largely retired) perils; numbers 11-16 add the "broad" perils. Open-peril forms (HO-3 dwelling, HO-5) flip the logic: every direct physical loss is covered unless excluded - so you study the exclusions instead of a peril list.

Section I Exclusions (the big concurrent-causation list)

These apply to all forms and are the heart of open-peril analysis:

• Ordinance or law - increased cost to comply with building codes (buy back with HO 04 77)
• Earth movement - earthquake, landslide, sinkhole, mudflow (earthquake endorsement HO 04 54 available)
• Water damage - flood, surface water, water below the ground (water table), and sewer/drain backup (backup buy-back via HO 04 95)
• Power failure occurring off the residence premises
• Neglect by the insured to save property at and after a loss
• War and nuclear hazard
• Intentional loss by an insured
• Governmental action (seizure, destruction by order)

Flood vs. Sewer Backup - a Classic Trap

Students conflate these. Flood (surface water rising from outside) is always excluded by the HO policy and requires a separate NFIP or private flood policy. Sewer/drain backup (water backing UP through pipes into the home) is also excluded by default but can be added back with the Water Backup endorsement (HO 04 95). Exam logic: water coming down/up from below or in = check endorsement; water rising across the ground from outside = NFIP flood policy, never the HO.

Anti-Concurrent-Causation

The water and earth-movement exclusions contain anti-concurrent-causation language: the loss is excluded "regardless of any other cause or event contributing concurrently or in any sequence." So if wind (covered) and flood (excluded) combine to destroy a home, the flood exclusion can bar the claim even though a covered peril participated - the reason post-hurricane wind-vs-water disputes are litigated so heavily.

Mold, Wear and Tear, and Maintenance

Open-peril forms still exclude losses that are not sudden and accidental:

• Wear and tear, deterioration, marring
• Mechanical breakdown, latent defect, rust, corrosion
• Smog, settling, cracking, shrinking, bulging
• Birds, vermin, rodents, insects
• Mold/fungus/wet rot - generally excluded; limited buy-back exists

Trap: a slow plumbing leak causing gradual rot is not covered (not sudden/accidental), but a pipe that suddenly bursts is covered. The trigger word "sudden and accidental" separates a covered claim from an excluded maintenance issue.

Freezing and the Maintenance Conditions

The freezing peril (peril 14) has a teeth condition: if the dwelling is vacant or unoccupied, freezing of plumbing is covered only if the insured maintained heat in the building or shut off the water supply and drained the system. Leave a vacant home unheated, pipes freeze and burst, and the claim is denied for failing the maintenance condition - a perennial exam scenario.

Likewise, theft coverage is suspended on a dwelling under construction (no occupancy yet) and theft of property from a part of the residence rented to others is excluded. And vandalism is excluded if the dwelling has been vacant for more than 60 consecutive days immediately before the loss. These vacancy/occupancy conditions repeatedly trip up candidates, so tie each one to the status of the home at the time of loss.

Perils Insured Against by Form

On a named-peril Homeowners form (HO-2, and contents on HO-3), coverage applies only to the listed perils: fire/lightning, windstorm/hail, explosion, riot/civil commotion, aircraft, vehicles, smoke, vandalism, theft, volcanic eruption, falling objects, weight of ice/snow/sleet, accidental discharge or overflow of water/steam, sudden/accidental tearing or cracking of a heating/AC/sprinkler system, freezing, and sudden artificial electrical-current damage. On an open-peril structure (HO-3 Coverage A/B, HO-5 throughout), every direct physical loss is covered unless excluded — shifting the burden of proof to the insurer.

The exam often presents a contents loss on an HO-3 (named peril) versus a structure loss on the same policy (open peril) to test whether you can apply two different triggers within one policy.

Section I Exclusions and Anti-Concurrent Causation

Homeowners forms exclude a standard set of causes regardless of form: ordinance or law (beyond the small additional coverage), earth movement, water damage (flood, surface water, sewer/drain backup unless endorsed), power failure, neglect, war, nuclear hazard, intentional loss, and governmental action. A second tier excludes weather conditions that combine with an excluded peril, acts or decisions of any group, and faulty planning/construction/maintenance — but an ensuing covered loss (for example, a fire that follows faulty wiring) is still paid.

The anti-concurrent-causation lead-in is decisive: it states the listed causes are excluded "regardless of any other cause or event contributing concurrently or in any sequence." This means that when an excluded cause (such as flood) combines with a covered cause (such as wind) to produce a loss, the entire loss can be denied — the reason wind-versus-water disputes after hurricanes are litigated so heavily and a recurring exam scenario.