5.3 Section II: Personal Liability (Coverage E), Medical Payments (Coverage F) & Additional Coverages

Section II: Personal Liability (Coverage E), Medical Payments (Coverage F) & Additional Coverages

Quick Answer: Coverage E (Personal Liability, base limit $100,000 per occurrence) protects any "insured" against third-party claims and lawsuits for "bodily injury" or "property damage" caused by an "occurrence", and pays legal defense costs in addition to the policy limit. Coverage F (Medical Payments to Others, base limit $1,000 per person) pays medical and funeral expenses incurred within 3 years of an accident without regard to legal fault—but never covers the Named Insured or regular household residents (other than a "residence employee").

---

Coverage E (Personal Liability) vs. Coverage F (Medical Payments to Others)

Who Is Covered Under Coverage F (Medical Payments to Others)?

Coverage F applies only to:

1. A person ON the "insured location" with the permission of an "insured" (such as a guest or delivery driver who slips on your steps); OR
2. A person OFF the "insured location", if the "bodily injury":
   • (a) Arises out of a condition on the "insured location" or the ways immediately adjoining;
   • (b) Is caused by the activities of an "insured" (for example, the insured accidentally hits another golfer with an errant golf shot or collides with a jogger while riding a bicycle);
   • (c) Is caused by a "residence employee" in the course of the "residence employee's" employment by an "insured"; or
   • (d) Is caused by an animal owned by or in the care of an "insured" (for example, the insured's dog gets loose and bites a pedestrian down the street).

---

Section II Additional Coverages

Section II includes four Additional Coverages that are paid in addition to the Coverage E limit of liability and are never subject to a deductible:

1. Claim Expenses

The insurer pays:

• All expenses it incurs and court costs taxed against an "insured" in any suit it defends;
• Premiums on appeal or release-of-attachment bonds (for bond amounts up to the Coverage E limit);
• Reasonable expenses incurred by an "insured" at the insurer's request, including actual loss of earnings (but not loss of other income) up to $250 per day, for assisting the insurer in the investigation or defense of a claim or suit; and
• Post-judgment interest on the entire judgment that accrues after entry of the judgment and before the insurer pays or deposits its limit in court.

2. First Aid Expenses

Pays expenses for first aid to others incurred by an "insured" at the time of an accident for "bodily injury" covered under the policy (never pays for first aid to "you" or any other "insured").

3. Damage to Property of Others ($1,000 Replacement Cost / Under-Age-13 Rule)

Pays, at Replacement Cost, up to $1,000 per "occurrence" for "property damage" to property of others caused by an "insured", regardless of legal fault (often called "moral obligation" or voluntary property damage coverage).

• The Under-Age-13 Intentional Damage Rule (High-Yield Exam Concept!): This coverage excludes damage caused intentionally by an "insured" who is 13 years of age or older. Consequently, if an insured's 10-year-old child intentionally throws a baseball through a neighbor's $900 stained-glass window, Damage to Property of Others WILL pay the $900 at Replacement Cost because the child is under age 13! (If a 14-year-old child did the exact same intentional act, both Coverage E and Damage to Property of Others would be excluded).
• Other Exclusions: Does not cover property damage: (a) to the extent recoverable under Section I; (b) to property owned by an "insured"; (c) to property owned by or rented to a tenant of an "insured" or a resident in your household; or (d) arising out of "business" pursuits, non-insured locations, or the ownership, maintenance, or use of motor vehicles, watercraft, aircraft, or hovercraft.

4. Loss Assessment (Section II)

Pays up to $1,000 per occurrence for the insured's share of a loss assessment charged by a homeowners or condominium association resulting from covered Section II "bodily injury" or "property damage", or from the liability of an "insured" serving as an elected, unpaid director, officer, or trustee of the association.

---

Section II Exclusions & Critical Exceptions

1. Exclusions Applying to BOTH Coverage E and Coverage F

• Expected or Intended Injury: Excludes "bodily injury" or "property damage" expected or intended by an "insured" (even if of a different degree or to a different person than intended). Exception: Does not exclude "bodily injury" resulting from the use of reasonable force by an "insured" to protect persons or property.
• "Business" Pursuits & Professional Services: Excludes business activities and professional services, except occasional or part-time self-employed business activities of an "insured" under 21 years of age with no employees (such as babysitting, lawn care, or newspaper delivery).
• Rental of Premises: Excludes renting out premises except rental of an "insured location": (1) on an occasional basis if used only as a residence; (2) in part as a residence, provided a single-family unit lodges no more than two roomers or boarders; or (3) in part as an office, school, studio, or private garage.
• Motor Vehicle Liability — Memorize the 5 Covered Exceptions! While highway motor vehicles are excluded, Section II DOES cover:
  1. A vehicle in dead storage on an "insured location";
  2. A vehicle not subject to registration used solely to service an "insured's" residence (such as a riding lawn mower on the residence premises);
  3. A vehicle designed to assist the handicapped and being used to assist a handicapped person at the time of the occurrence (such as a motorized wheelchair);
  4. A motorized golf cart owned by an "insured" (up to 4 passengers, max 25 mph) while within a golfing facility or an approved private residential community; and
  5. A recreational off-road vehicle (such as an ATV, dirt bike, or snowmobile) that is either not owned by an "insured", OR owned by an "insured" provided the "occurrence" takes place ON an "insured location"! (Once an owned ATV or snowmobile leaves the "insured location" onto a public trail, road, or neighbor's land, Section II liability is excluded!).
• Watercraft Liability Exceptions (HO 2011): Unless the watercraft is being raced, rented to others, used to carry persons or cargo for a charge, or used for business, Section II DOES cover watercraft that is stored; sailing vessels under 26 feet (and sailing vessels 26 feet or longer that are not owned by or rented to an insured); inboard or inboard-outdrive boats of 50 hp or less not owned by an insured (or over 50 hp if neither owned by nor rented to an insured); and outboard power of 25 total horsepower or less (or more than 25 hp if the outboard is not owned by an insured).
• Other E & F Exclusions: Aircraft and hovercraft (except non-carrying hobby/model aircraft), War, Communicable Disease, Sexual Molestation, Corporal Punishment, or Physical/Mental Abuse, Controlled Substances (except legitimate use of prescription drugs under a licensed healthcare provider's orders), and Workers' Compensation obligations.

2. Exclusions Applying ONLY to Coverage E (Including the Fire Legal Liability Exception)

Coverage E alone also excludes:

1. Contractual Liability (except written contracts directly relating to the ownership, maintenance, or use of an "insured location");
2. "Property damage" to property owned by an "insured";
3. "Property damage" to property rented to, occupied or used by, or in the care, custody, or control of an "insured" — CRITICAL EXCEPTION (Fire Legal Liability): This exclusion does NOT apply to "property damage" caused by fire, smoke, or explosion! If an insured negligently starts a kitchen fire in a rented vacation cabin that causes $60,000 of fire and smoke damage to the cabin, Coverage E pays up to its $100,000 limit! Conversely, if the insured negligently overflows the bathtub in that same rented cabin causing $20,000 of water damage, Coverage E excludes the water damage to the rented cabin (and only the $1,000 Damage to Property of Others Additional Coverage can respond); and
4. "Bodily injury" to "you" or any "insured" (the Intra-Family Exclusion).

3. Key Section II Conditions

• Severability of Insurance: This insurance applies separately to each "insured", except that this condition never increases the Coverage E per-occurrence limit of liability.
• Bankruptcy of an Insured: Bankruptcy or insolvency of an "insured" does not relieve the insurer of its obligations under Section II.