Section I Perils Insured Against and Exclusions

Named Peril vs. Open Peril

On named-peril coverage (HO-2 dwelling and contents; HO-3, HO-4, HO-6 contents), a loss is paid only if it results from a peril on the form's list. ISO's broad-form list has 16 named perils:

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 or overflow of water/steam
13. Sudden/accidental tearing apart of a heating or A/C system
14. Freezing of plumbing
15. Sudden/accidental damage from artificially generated electrical current
16. Volcanic eruption

Open Peril Coverage

Open-peril (special) coverage applies to the dwelling on HO-3 and to both dwelling and contents on HO-5. It covers any direct physical loss except those the policy specifically excludes. This is why claim disputes on open-peril forms revolve around exclusions rather than peril lists.

A frequent exam point: the broad-form peril of "falling objects" does not cover damage to the interior of a building or its contents unless the falling object first damages the exterior roof or wall. Likewise, "weight of ice, snow, or sleet" does not cover damage to outdoor structures like awnings, fences, patios, or swimming pools.

The Section I Exclusions (apply to all forms)

These exclusions remove coverage regardless of the peril basis:

Flood is never covered by a Homeowners policy; it requires a separate NFIP or private flood policy. Sewer or drain backup can be added back by endorsement (HO 04 95).

Anti-Concurrent Causation & Vacancy

Most ISO exclusions are introduced by anti-concurrent causation (ACC) language: "We do not insure for loss caused directly or indirectly by any of the following ... regardless of any other cause or event contributing concurrently or in any sequence to the loss." The practical effect: if an excluded peril (such as flood) contributes to a loss, the entire loss is excluded even if a covered peril (such as wind) also operated. This is why a hurricane's wind damage may be paid while its storm-surge flooding is denied.

Also tested: when a dwelling is vacant beyond 60 consecutive days, vandalism, glass breakage, and certain water losses are excluded, and any other covered loss is reduced. Note the distinction between vacant (empty of people and property) and unoccupied (furnished but no one present).

HO-3 Perils: Open on Building, Named on Contents

The defining feature of the HO-3 is its split peril basis: Coverages A and B (dwelling and other structures) are written open-perils (all direct physical loss except what is excluded), while Coverage C (personal property) is written on a named-perils list. The HO-5, by contrast, extends open perils to contents as well. On a named-perils basis the insured must prove the loss came from a listed peril; on open perils the insurer must prove an exclusion. This is why a mysteriously disappeared item may be denied under HO-3 contents (mysterious disappearance is not a listed peril) but could be covered under HO-5.

The Named-Perils List for Contents

The broad named-perils list applied to HO-2 and to HO-3/HO-5 contents includes fire/lightning, windstorm/hail, explosion, riot/civil commotion, aircraft, vehicles, smoke, vandalism/malicious mischief, theft, falling objects, weight of ice/snow/sleet, accidental discharge of water/steam, freezing of plumbing, sudden tearing/cracking of a heating system, and damage from artificially generated electrical current. The exam tests recognition - for example, that freezing of plumbing is covered only if the insured used reasonable care (maintained heat or shut off and drained the system).

Core Section I Exclusions

Standard homeowners exclusions remove ordinance or law (cost to rebuild to current code), earth movement (earthquake, landslide, sinkhole), water damage/flood (surface water, sewer backup unless endorsed), power failure (off premises), neglect, war, nuclear hazard, and intentional loss. Many are written with anti-concurrent-causation language so the loss is excluded even if a covered peril contributes. The big two consumers misunderstand are flood and earthquake, both excluded and requiring separate coverage (NFIP or a difference-in-conditions/earthquake endorsement).

Expect a scenario where storm surge floods a home and the claim is denied despite covered wind.

Reasonable-Care Conditions and the Mold Sublimit

Several named perils on the contents list are conditioned on the insured's conduct. Freezing of plumbing is covered only if the insured maintained heat or shut off the supply and drained the system while away. Accidental discharge of water is covered, but the continuous or repeated seepage that causes hidden, long-term damage is excluded as a maintenance issue. Modern homeowners forms also impose a low fungus/mold sublimit, treating mold as a maintenance and humidity problem rather than a sudden covered peril.

Recognizing these care-based conditions explains why a frozen pipe in a vacant, unheated house may be denied while a sudden burst in an occupied home is paid.