Section I Perils Insured Against and Exclusions
Key Takeaways
- Named-perils puts the proof burden on the insured; open-perils (special form) puts it on the insurer to prove an exclusion.
- The broad named-peril list runs 16 perils ending with volcanic eruption; basic perils stop near vandalism/theft.
- Universal Section I exclusions include flood, earth movement, war, nuclear, neglect, intentional loss, and wear/tear/mold.
- The anti-concurrent-causation lead-in excludes a loss even when a covered cause contributes; wind vs. flood in a hurricane must be apportioned.
- Ensuing fire or explosion following an excluded peril is typically covered back.
Named Perils vs. Open Perils
Section I coverage works one of two ways:
- Named-perils (specified perils): the policy lists exactly what is covered; the insured bears the burden of proving the loss came from a listed peril. Used for personal property on HO-2/3/4/6, and for everything on HO-8.
- Open-perils (all-risk / special form): all direct physical loss is covered unless specifically excluded; the insurer bears the burden of proving an exclusion applies. Used for the dwelling on HO-3 and for both dwelling and contents on HO-5.
This burden-of-proof flip is heavily tested. Open-perils is broader and shifts the proof to the carrier.
The Broad-Form Named Perils
The HO-2/HO-3 personal-property (broad) named perils - know the list:
- Fire or lightning
- Windstorm or hail
- Explosion
- Riot or civil commotion
- Aircraft
- Vehicles
- Smoke
- Vandalism or malicious mischief
- Theft
- Falling objects
- Weight of ice, snow, or sleet
- Accidental discharge/overflow of water or steam
- Sudden tearing/cracking/burning/bulging of a heating/AC/sprinkler system
- Freezing of plumbing/HVAC
- Sudden damage from artificially generated electrical current
- Volcanic eruption
The first basic perils (HO-8, DP basic) stop around item 8-9; items 10-16 are what make the list "broad."
Section I Exclusions (Apply to All Forms)
Even open-perils forms exclude the following. These are tested as "which is NOT covered":
| Excluded Peril | Note / Where to Get Coverage |
|---|---|
| Flood / surface water | Separate NFIP or private flood policy |
| Earth movement (earthquake, sinkhole, landslide) | Earthquake endorsement / DIC |
| Water below the surface / seepage | Long-term seepage is maintenance, not sudden |
| War, nuclear hazard | Always excluded |
| Neglect / failure to protect property | Insured's duty after loss |
| Intentional loss | No coverage for the wrongdoer |
| Ordinance or law | Limited additional coverage only |
| Power failure / off-premises | Excluded if originating off premises |
| Governmental action, wear and tear, mold, rot, vermin | Maintenance items |
Concurrent Causation and the Anti-Concurrent Clause
The HO exclusions open with an anti-concurrent-causation (ACC) lead-in: a loss is excluded "regardless of any other cause or event contributing concurrently or in any sequence." So if excluded flood and covered wind combine to damage a roof, the flood-related damage stays excluded even though wind also contributed.
A classic trap: a hurricane brings both wind (covered) and storm surge/flood (excluded). The HO policy pays the wind portion; the flood portion needs NFIP. Adjusters must apportion the loss. Note that fire or explosion ensuing from an otherwise-excluded event is typically covered back (the "ensuing loss" exception).
On an HO-3, the insured's home is damaged by an earthquake that also ruptures a gas line, causing a fire that burns part of the house. How does the policy most likely respond?
Under an open-perils (special form) policy, who has the burden of proof when a loss occurs?
The Broad-Form Named Perils — Memorize the List
When a form (HO-2, or HO-3 contents) is named-peril, the insured must prove the loss came from a listed peril. The broad-form perils are commonly memorized in groups:
- Fire or lightning; windstorm or hail; explosion; riot or civil commotion; aircraft; vehicles; smoke; vandalism or malicious mischief; theft; volcanic eruption (the core "extended coverage + V&MM + theft" set), plus the broad-form additions:
- Falling objects; weight of ice, snow, or sleet; accidental discharge or overflow of water or steam; sudden and accidental tearing apart/cracking/burning/bulging of a heating or cooling system; freezing of plumbing; and sudden and accidental damage from artificially generated electrical current.
Trap: Flood, earthquake, and surface water are never on the named-peril list and are excluded even on open-peril forms — they require separate coverage.
Section I Exclusions and Anti-Concurrent Causation
The Section I exclusions apply to all homeowners forms, open-peril and named-peril alike. The standard list is earth movement (earthquake/landslide), water damage (flood, surface water, sewer back-up), war, nuclear hazard, neglect, intentional loss, governmental action, and ordinance or law, plus maintenance items — wear and tear, deterioration, mechanical breakdown, smog, rust, mold, vermin, and settling — that are not fortuitous.
Modern HO forms include an anti-concurrent causation (ACC) clause stating that an excluded peril is excluded regardless of any other cause contributing concurrently or in any sequence. The signature application is flood vs. wind: in a hurricane that brings both, the ACC clause denies the flood/storm-surge portion even though covered wind also damaged the home, which is why coastal owners must buy NFIP flood coverage. Expect a fact pattern that mixes a covered and an excluded peril and asks how the ACC clause resolves the claim — the excluded peril wins.
Open-Peril Mechanics and the Burden-of-Proof Flip
On an open-peril form (HO-3 structure, HO-5 structure and contents), coverage is presumed: the insured need only show a direct physical loss occurred, and the insurer must point to an exclusion to deny it. This burden-of-proof flip is the practical advantage open-peril buyers pay for, and it is why fact patterns describing an unexplained or mysterious loss favor the insured under HO-3/HO-5 but may fail under a named-peril HO-2 where the insured cannot identify a listed cause.
Worked contrast: A homeowner discovers the hardwood floor buckled with no obvious cause. Under HO-5 (open peril), the loss is covered unless the insurer proves an excluded cause such as flood, seepage over time, or wear. Under HO-2 (named peril), the same loss is not covered because the insured cannot tie it to a listed peril. The exam rewards recognizing that open-peril forms cover the unknown while named-peril forms cover only the proven-listed.
Remember too that several "perils" are actually written as additional coverages with their own conditions — collapse and glass breakage are covered subject to specific triggers, not as free-standing named perils, so a question may turn on whether the collapse meets the defined causes (hidden decay, vermin damage, weight of contents/snow, defective construction discovered during construction).