4.3 Section I Perils Insured Against and Exclusions

Perils Insured Against

A peril is the cause of loss. How a homeowners form treats perils depends on whether it is named peril or open peril.

• HO-2 applies named perils to both the dwelling and personal property.
• HO-3 applies open perils to Coverages A and B (the structures) but named perils to Coverage C (personal property).
• HO-5 applies open perils to all property.

This split on the HO-3 is one of the most frequently tested points: the building is broadly protected, but belongings are covered only for listed perils.

The Broad-Form Named Perils

When a loss must be caused by a listed peril, these are the standard HO-2/contents 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 of water or steam (plumbing)
13. Freezing of plumbing
14. Sudden tearing/cracking of a heating system
15. Electrical damage to appliances
16. Volcanic eruption

A loss outside this list (on a named-peril form) is not covered.

Universal Section I Exclusions

Every homeowners form excludes the same core perils, regardless of form number:

These are sometimes remembered as the "WIN-PONG"-type list, but learn them by behavior, not mnemonic alone.

Flood vs. Water Damage Trap

A classic exam trap distinguishes flood from covered water damage:

• A burst interior pipe that floods the kitchen is a covered named peril (accidental discharge).
• Rising surface water entering from outside - a river overflow, storm surge, or backed-up surface runoff - is excluded flood, covered only by the National Flood Insurance Program (NFIP) or a private flood policy.

Sewer or drain backup is also excluded unless a water backup endorsement is added.

Anti-Concurrent Causation and the Ensuing-Loss Exception

Two doctrines decide many exclusion questions. The anti-concurrent causation clause states that an excluded peril is barred even if a covered peril contributes concurrently or in sequence — so if flood and wind both damage a home, the flood-caused portion is excluded regardless of the wind. This is why hurricane claims are litigated.

The ensuing-loss exception runs the other way: if an excluded event causes a separate covered peril, the resulting damage is covered. Classic example: faulty workmanship (excluded) causes a pipe to burst, and the ensuing water damage is covered even though the repair to the bad work is not.

How HO-3 Open Peril Actually Works on the Dwelling

On the HO-3/HO-5 dwelling (Coverages A and B), open-peril means all direct physical loss is covered unless excluded, and the insurer bears the burden of proving an exclusion. The dwelling-specific exclusions add: wear and tear, deterioration, mechanical breakdown, smog, rust, mold, wet/dry rot, settling/cracking, animals owned by the insured, birds/vermin/rodents/insects, and freezing of plumbing while the dwelling is vacant unless the insured used reasonable care or shut off and drained the system.

Worked trap: a sewer backs up and ruins a finished basement. Standard homeowners forms exclude water that backs up through sewers or drains; coverage exists only if the Water Backup and Sump Overflow endorsement (HO 04 95) was added. Contrast with a burst supply pipe, which is a covered accidental discharge. Distinguishing surface flood (NFIP), sewer backup (endorsement), and interior pipe burst (covered) is one of the highest-yield property exam skills.

Scenario Drills: Naming the Outcome

Examiners present a loss and ask "covered or not, and why." Practice these:

Vacancy, Neglect, and Intentional Loss

Three insured-conduct exclusions decide otherwise-covered claims. Neglect denies losses the insured failed to mitigate after the event (not securing a damaged roof, so rain causes more harm). Intentional loss voids coverage for damage an insured deliberately causes — and the 2011 ISO language denies the innocent co-insured's share for an intentional act by any insured in many editions. Vacancy (commonly 60+ days) suspends certain perils (glass breakage, vandalism, freezing) because an empty dwelling is higher risk.

Exam trap — concurrent causation: if an excluded flood and a covered wind both contribute, the anti-concurrent-causation clause bars the flood-caused damage entirely; only the clearly wind-caused portion is paid. Pair this with the ensuing-loss rule (an excluded cause that triggers a separate covered peril, like faulty work leading to a covered fire) to answer the trickiest property questions correctly.