Section I Perils Insured Against and Exclusions

Perils Insured Against

The form number you learned in 4.1 controls the Perils Insured Against clause. The structure differs between dwelling and contents:

• HO-2: Coverages A, B, and C all use the broad-form named-perils list (16 perils).
• HO-3: Coverages A and B are open perils ('we insure against risk of direct physical loss... except as excluded'); Coverage C uses the broad-form named-perils list.
• HO-5: Coverages A, B, and C are all open perils.
• HO-8: Coverages A, B, and C use a narrowed named-perils list (fewer than the broad form; theft is limited to on-premises and capped).

When a form is open-perils, the insurer must point to an exclusion or limitation to deny; when it is named-perils, the insured must affirmatively tie the loss to a listed peril.

Coverage C named perils (broad form)

Even on the HO-3, contents losses must trace to one of the 16 broad-form perils. Heavily tested members of that list:

• Accidental discharge or overflow of water or steam from plumbing/HVAC - but NOT continuous/repeated seepage (that's excluded as maintenance).
• Weight of ice, snow, or sleet that damages the building.
• Freezing of plumbing - covered only if the insured used reasonable care (maintained heat or shut off and drained the system).
• Sudden and accidental damage from artificially generated electrical current - excludes damage to tubes, transistors, and similar electronic components.
• Falling objects - interior contents covered only if the exterior is first damaged.

Section I Exclusions (the 'big eight' concurrent-causation exclusions)

These apply to all HO forms, including open-perils HO-3/HO-5, and use anti-concurrent-causation language ('we do not pay regardless of any other cause contributing concurrently or in any sequence'):

1. Ordinance or law (cost to comply with building codes - buy back with HO 04 77).
2. Earth movement (earthquake, landslide, sinkhole, mudflow) - earthquake added by HO 04 54.
3. Water damage - flood, surface water, sewer/drain backup, and groundwater (sewer backup addable by HO 04 95; flood needs separate NFIP/private flood).
4. Power failure (off-premises).
5. Neglect to preserve property after a loss.
6. War.
7. Nuclear hazard.
8. Intentional loss by an insured.

A ninth, governmental action (seizure/destruction), is sometimes listed.

Dwelling-only (Coverage A/B) additional exclusions

Open-perils dwelling coverage adds a second tier that bars losses generally considered wear-and-tear or maintenance:

• Wear and tear, deterioration, marring, mechanical breakdown.
• Mold, fungus, wet rot (sublimited buy-back via HO 04 26/27).
• Smog, rust, corrosion, and settling/cracking of foundations and walls.
• Damage from birds, vermin, rodents, insects, or domestic animals.
• Continuous or repeated seepage of water over weeks/months.

Key trap: an ensuing covered loss is still paid. If excluded rust causes a pipe to suddenly burst, the resulting water damage to other property is covered even though the corrosion itself is not.

Theft, sublimits, and special situations

Theft coverage carries its own tested rules. Theft is excluded when committed by an insured, when it occurs at a dwelling under construction (materials/supplies), and for property at a secondary or vacation residence while no insured is there (limited coverage). Theft of property away from the residence premises is covered but several Coverage C special limits drop (e.g., jewelry, firearms).

For freezing claims, the policy will not pay if the insured failed to maintain heat or to shut off and drain the plumbing during a vacancy - a classic 'snowbird' loss the exam likes to test. Vandalism is also excluded if the dwelling has been vacant more than 60 consecutive days before the loss, because vacant property is a heightened moral/physical hazard.

Finally, distinguish the water-damage exclusion (flood, surface water, sewer backup, groundwater - excluded everywhere) from the covered peril of accidental discharge from an indoor plumbing/HVAC system. A pipe that suddenly bursts inside the home is a covered cause of loss on every form; water that enters from outside or backs up through a drain is the excluded category. The HO 04 95 endorsement adds limited water/sewer backup coverage, and flood always requires a separate NFIP or private flood policy.

The Section I Exclusions and How They Decide Claims

Open-peril homeowners coverage lives or dies on its exclusions. The recurring "big eight" concurrent-causation exclusions are:

1. Ordinance or law (code upgrades) 2. Earth movement 3. Water damage (flood, surface water, sewer backup) 4. Power failure (off-premises) 5. Neglect 6. War 7. Nuclear hazard 8. Intentional loss.

Anti-concurrent causation trap: The lead-in says these are excluded "regardless of any other cause or event contributing concurrently or in any sequence." So a flood that combines with a covered windstorm is still excluded for the flood portion - the clause defeats efficient-proximate-cause arguments.

Theft Coverage and Its Limits

Theft is covered, but with conditions: theft from a dwelling under construction is excluded (no occupant to deter it), and theft of property away from a secondary residence is limited. The Coverage C special limits (jewelry, firearms, money) cap theft recovery on those categories regardless of the overall limit.

Mold, Wear, and Maintenance

The form excludes ordinary wear and tear, deterioration, mechanical breakdown, and mold/fungus beyond a small capped amount, because these are maintenance items, not fortuitous losses. Ensuing loss rules still apply: if an excluded cause leads to a covered peril (a wear-and-tear pipe failure causing sudden water discharge), the resulting water damage may be covered even though the worn pipe itself is not.