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Whatcha think….

Covered or not

Personal residential issues

1

with

Irene Morrill, CPCU, CIC, ARM, CRM, LIA, CPIW Vice President of Technical Affairs

Massachusetts Association of Insurance Agents

This program is designed to provide accurate and authoritative information in regard to the

subject matter covered. It is provided with the understanding that the publisher is not engaged in

rendering legal, accounting, or other professional service. If legal advice or other expert

assistance is required, the services of a competent professional person should be sought.

With special thanks to the Insurance Services Office, Inc. for advance information, continued

support, and permission to use their forms and information.

A homeowner is having work done on her home for which

she is renting an excavator. A relative will be operating the

equipment on her behalf. Would her liability cover this

piece of equipment?

From what I can see, she would have coverage under

Section II Exclusions,

"this exclusion does not apply to:

" Part 4, A, a vehicle or conveyance not subject to motor

vehicle registration which is: used to service an

"insured's" residence.

Maintenance vehicles

My client informed me that he has a utility trailer and

trailers his very expensive riding lawnmower over to his

aged mother’s house to mow her lawn.

If it falls out of the trailer and is damaged, is it covered?

If someone gets injured while he is mowing …is he

covered?


Well … the answer for both questions …depends on which

edition of the ISO HO policy the client has.

If the company is not “ISO” then one needs to READ the

policy.

The ISO HO-91 is the most user friendly and the ISO HO-

2000 is the LEAST user friendly


Coverage C covers personal property

anywhere in the world but … does not

cover

Motorized land conveyances UNLESS:

NOT subject to MVR

USED to service insured’s residence

DESIGNED to assist handicapped

Maintenance vehicles – HO-91

“eligibility issue” …if either

applies …EVER …then

ALWAYS covered

Coverage E is universe wide …but

excludes


NOT subject to MVR

USED to service insured’s residence



“eligibility issue” …if either

applies …EVER …then

ALWAYS covered




cover

“motor vehicles” UNLESS:

NOT subject to ANY REGISTRATION

USED SOLELY to service an

insured’s residence




excludes


NOT subject to ANY registration

USED SOLELY to service an

insured’s residence

DESIGNED to assist

handicapped and being USED

by handicapped




cover

“motor vehicles” UNLESS:

NOT subject to ANY REGISTRATION

USED SOLELY to service A

residence




excludes


NOT subject to ANY registration

USED SOLEY to service A residence


and used by handicapped

Maintenance vehicles – HO-91/2000/2011

An afterthought …

my answer was for

the named insured

But a relative is

using the vehicle …

is the relative an

“insured”?

It appears so …

HO-2000/2011 but HO-91 same


HO-91 will cover this rental of excavator issue

HO-2000 … the word “solely” could “get you” ..since

other people rent it for other things ….

HO-2011 …again …the word “solely” could be a problem

My client informed me that he has a utility trailer and

trailers his very expensive riding lawnmower over to his

aged mother’s house to mow her lawn.

If it falls out of the trailer and is damaged, is it covered?

If someone gets injured while he is mowing …is he

covered?



HO-91 would definitely cover this question

HO-2011 also ..used solely to service A residence – would

cover

HO-2000 …no way …used solely to service INSURED’s

residence

Bank request

Not sure if you can help. X Bank is requiring a declarations

page (not a binder) before there is a closing on a property.

Supposedly this is a new requirement of FHA Loans.

Most companies do not have immediate print on policies and

why would they want to write a policy ahead of closing, when

the closing date could change or the closing cancelled. The

agent and the carrier would frequently be cancelling and

rewriting.

We just lost an account because of this and they went to a

direct writer. This does not seem to be consumer friendly. Have

you heard of this? Any suggestions?

Bank request

Per below MA MGL ...I thought they HAD to accept a

binder:

CHAPTER 183. ALIENATION OF LAND. CONVEYANCE BY DEED. Section 65. Acceptance of written memorandum as evidence of insurance. Section 65. Any mortgagee doing business in the commonwealth who makes in excess of five mortgage loans per year shall accept a written memorandum of a preliminary contract of insurance pursuant to section ninety-eight of chapter one hundred and seventy-five as evidence of insurance from any duly licensed agent, broker or insurance company; provided, however, that a contract for insurance for a term of not less than one year is issued within thirty days of said memorandum, or in the event of the cancellation of said memorandum, the mortgagee shall be provided with prior written notification thereof. (Amended by 1986, 505.)

Rented jetski

For a rented jet ski that exceeds the HP allowed on the

homeowners policy, how would I get physical damage and

liability coverage- by purchasing it at the place I rent the jet

ski?

I assume for an owned jet ski, I would need a separate boat

owners policy, but can you please confirm? Thanks so much.

Rented jetski

All the ISO HO editions deal with watercraft the same

way.

The ISO HO-2000/2011 get into the very broad

watercraft liability definition …but bottom line when the

insured rents a jetski … they respond the same way

Rented jetski- the following is the HO-2000/2011

The Exclusion does not apply

to an inboard/inboard

outdrive engine if

RENTED <50 hp

Of course jetskis are

generally measured in cc not

hp …

So …

Converting hp to cc

Jet Ski PWC 1986 Kawasaki X-2 635 cc is 52hp

Rented jetski

If OWNED …it is NEVER covered for free …. Would need HO 24 75 but probably a personal watercraft policy

Rented jetski

Coverage C …personal property would restrict coverage to

special limit of $1,000 under the ISO HO-91 and $1500 under

ISO HO-2000/2011

Also …there is never any theft from off the residence premises

And no windstorm damage unless in fully enclosed building

HO replacement cost – does it end?

I have a client that has had a terrible time getting a contractor

that would agree to company appraisal.

Work took 2 years and 2 months.

She has the denial letter.

What avenue would be open to her? Have you heard if this

being waived for such course?


The HO 01 20 MA endorsement to ISO HO policy ... any edition modifies Loss Settlement


The ISO policy talks about 180 days

One ALWAYS can have ACV … I

would file a consumer complaint …

and see what happens … I know the

horror stories of building


Consumer complaint

Might be in order


To renege on paying R/C

for a few months is poor

business practice

Home sale and moving

Have a client who is selling his primary home and will be living in a

hotel for a few weeks until the construction for his new primary

home is complete.

He is inquiring about what type of policy he can have while his

personal property is in storage. Can you advise? Thanks!


Is the new home insured under a HO policy yet?

if so ... then the ISO HO-91 and HO-2000

provide complete coverage C in storage.

HO-91

HO-2000


Has previous policy been cancelled ...

one could "leave it open" for a bit ... for contents and liability ..

but will the house REALLY be done in a couple of weeks –

again ... full coverage C in storage if HO-91 or HO-2000 ...

Where they are temporarily residing could be an “insured location” –

HO-91 and HO-2000


Where are they living temporarily - a tenant's policy under ISO HO-

91or HO-2000 - gives full coverage C in storage also …

if one chooses to buy …or one already cancelled the HO-3


If the company writes their own

or is ISO HO-2011 then with

HO-2011 there is a 10% limitation

for stuff in storage facility.

Who insures the ring?

My client just bought his girl an engagement ring.

He wants to know who insures it …him or her?

What about the Diamond …does

his tenants policy cover that?

Number one …What is the contents limit

on the HO-4 and how valuable is the

diamond???

Number two … you only have 16 named perils

under the HO-4 UNLESS you have added the

All risk endorsement HO 05 24. - Losing stone

or ring STILL limited with open peril

endorsement

Number three … .”special limit” for theft of jewelry


HO-91 HO-2000/2011

COVERAGE C – Personal Property

Special Limits of Liability. These

limits do not increase the Coverage C

limit of liability. The special limit for

each numbered category below is the

total limit for each loss for all property

in that category.

5. $1000 for loss by theft of

jewelry, watches, furs,

precious and semi-precious

stones.

Coverage C – Personal

Property

3. Special Limits Of

Liability

The special limit for each

category shown below is the

total limit for each loss for all

property in that category.

These special limits do not

increase the Coverage C limit

of liability.

e. $1,500 for loss by theft of

jewelry, watches, furs,

precious and

semiprecious stones


So …we most probably suggest SCHEDULING

the ring …

WHO SCHEDULES IT … Mike or Suzie???


Mike bought it and has insurable interest

Proposal is a “contract” … ring is the

“consideration” …bride-to-be must

return ring if cancel engagement

Suzie wearing it … has custody …could

insure it and if live at home …under mom

and dad’s policy


So …we most probably suggest SCHEDULING

the ring …

Under the HO-2000 /2011 you have the

choice of the

HO 04 61 Scheduled Personal Property

Endorsement

or

the HO 04 60 Scheduled Personal Property

Endorsement (With Agreed Value Loss

Settlement) HO 04 60

Both provide “all risk coverage” …with very

few exclusions


Perils discussion found in the HO 04 61 and the HO 04 60 C. Perils Insured Against

We insure against risks of direct loss to property described only if that loss is a physical loss to

property; however, we do not insure loss caused by any of the following:

1. Wear and tear, gradual deterioration or inherent vice.

2. Insects or vermin.

3. War, including the following and any consequence of any of the following:

a. Undeclared war, civil war, insurrection, rebellion or revolution;

b. Warlike act by a military force or military personnel; or

c. Destruction, seizure or use for a military purpose.

Discharge of a nuclear weapon will be deemed a warlike act even if accidental.

4. Nuclear Hazard, to the extent set forth in the Nuclear Hazard Clause of Section I –

Conditions.

5. If Fine Arts are covered:

a. Repairing, restoration or retouching process;

b. Breakage of art glass windows, glassware, statuary, marble, bric-a-brac, porcelains and

similar fragile articles. We cover loss by breakage if caused by:

(1) Fire or lightning;

(2) Explosion, aircraft or collision;

(3) Windstorm, earthquake or flood;

(4) Malicious damage or theft;

(5) Derailment or overturn of a conveyance.

We do not insure loss, from any cause, to property on exhibition at fair grounds or premises of

national or international expositions unless the premises are covered by this policy


The major

difference

between the

“normal”

Scheduled

personal

property floater

HO 04 61 and

the HO 04 60 is

the LOSS

VALUATION

CLAUSE:

HO 04 61

2. Loss Settlement

Covered property losses are settled as follows:

c. OTHER PROPERTY

(1) THE VALUE OF THE PROPERTY

INSURED IS NOT AGREED UPON BUT

WILL BE ASCERTAINED AT THE TIME OF

LOSS OR DAMAGE. WE WILL NOT PAY

MORE THAN THE LEAST OF THE

FOLLOWING AMOUNTS:

(a) THE ACTUAL CASH VALUE OF THE

PROPERTY AT THE TIME OF LOSS

OR DAMAGE;

(b) THE AMOUNT FOR WHICH THE

PROPERTY COULD REASONABLY BE

EXPECTED TO BE REPAIRED TO ITS

CONDITION IMMEDIATELY PRIOR TO

LOSS;

(c) THE AMOUNT FOR WHICH THE

ARTICLE COULD REASONABLY BE

EXPECTED TO BE REPLACED WITH

ONE SUBSTANTIALLY IDENTICAL TO

THE ARTICLE LOST OR DAMAGED; OR

(d) THE AMOUNT OF INSURANCE.

HO 04 60

F. Conditions

1. Loss Settlement

Covered property losses are settled as

follows:

a. Agreed Value

We will pay, for each article or property

designated in the Schedule, the full

amount shown in the Schedule which is

agreed to be the value of that article or

property. At our request, you will

surrender that article or property to us if

not lost or stolen.


The HO 04 61…doesn’t guarantee payment …

it pays the LEAST of

1) ACV

2) Repair

3) OUR replacement

4) Stated limit

The HO 04 60 guarantees the limit shown on the

endorsement as it is an agreed value coverage.

Agreed value generally costs more …

It is better as long as the insured continually

UPDATES the appraisal that activates the agreed

value option!!!!!


IF the fiancé’ moves in BEFORE she gets the

wedding ring …

is she an insured under his tenant’s policy …

does the policy cover her at all???

She is NOT an “insured” by definition under the

ISO HO-91 or the HO-2000/2011 policies


HO-91

In this policy, “you” and “your” refer to the

“named insured” shown in the Declarations

and the spouse if a resident of the same

household.

3. "Insured" means you and residents of your

household who are:

a. Your relatives; or

b. Other persons under the age of 21 and in

the care of any person named above.

Under Section II, "insured" also means:

c. With respect to animals or watercraft to

which this policy applies, any person or

organization legally responsible for these

animals or watercraft which are owned by

you or any person included in 3.a. or 3.b.

above. A person or organization using or

having custody of these animals or

watercraft in the course of any "business"

or without consent of the owner is not an

"insured";

d. With respect to any vehicle to which this

policy applies:

(1) Persons while engaged in your employ

or that of any person included in 3.a. or

3.b. above; or

(2) Other persons using the vehicle on an

“insured location” with your consent.

HO-2000/2011

5. "Insured" means:

a. You and residents of your household who are:

(1) Your relatives; or

(2) Other persons under the age of 21 and in the care

of any person named above;

b. A student enrolled in school full time, as defined by

the school, who was a resident of your household

before moving out to attend school, provided the

student is under the age of:

(1) 24 and your relative; or

(2) 21 and in your care or the care of a person

described in a.(1) above; or

c. Under Section II:

(1) With respect to animals or watercraft to which this

policy applies, any person or organization legally

responsible for these animals or watercraft which

are owned by you or any person included in a. or

b. above. "Insured" does not mean a person or

organization using or having custody of these

animals or watercraft in the course of any "business"

or without consent of the owner; or

(2) With respect to a "motor vehicle" to which this

policy applies:

(a) Persons while engaged in your employ or that

of any person included in a. or b. above; or

(b) Other persons using the vehicle on an "insured

location" with your consent.

Under both Sections I and II, when the word an

immediately precedes the word “insured”, the word an

means one or more “insureds”


My 20 year old son is living in a Non-Campus

Apartment at UNH in NH.

We live in Massachusetts.

I have some people here at work telling me, no

tenant policy needed because he is still my

dependent and my HO3 policy would cover him and

others saying because he is 20 and off campus my

HO3 would not respond.

What are your thoughts.

Son at school in apartment

Two questions ….

Who is YOUR HO insurance carrier and what edition

of ISO HO policy is it …and if not ISO …need to look

at definition of “insured”

Is living …CURRENTLY … didn’t college end for

summer … is he living in it YEAR ROUND and when

college not in session?



The answer is HO0003, 04/91 – he is back and forth between school and home all summer, but apartment is rented 6/1/16-5/31/17,

but …if the same apartment is rented the following year …the

“insured location” definition regarding temporarily residing

gets “gray”

d. Any part of a premises:

(1) Not owned by an "insured"; and

(2) Where an "insured" is temporarily residing

I would ask the underwriter just to see the company’s take on

this issue…they should have one since the HO-91 is over 2

decades old


An off campus apartment will be considered another “insured’s

residence” and contents limited to 10%

If he leaves his stuff more than 45 days there is no theft

Sometimes an HO-4 guarantees at least ONE policy will pay.


The ISO HO-2000/2011 creates a bigger problem with The definition of “insured”


The ISO HO-2000/2011 creates a bigger problem with The definition of “insured”


Move out in August come

back every May??

Move out as a Freshman

and come back graduated

as a senior?

This is NOT a cut and dried answer …

you really should be talking to the company …

not me …and certainly not co-workers


Our insured’s son will be renting an apartment

when he goes to college …

but the parents are signing the lease – will that be a

problem?


Well …that is interesting …and more of a legal

question…

Since the parents are NOT going to live there then the HO-4

cannot be in THEIR NAME ….

Named insured MUST live there


The ISO HO-2000/2011 definition of residence premises

under the ISO HO-4 is:

HO91 is:


Can we add parents in addition to son….

Otherwise …I’d prefer lease in just kid’s name …

But …I’d ask a lawyer if there are legal ramifications


I have a potential customer who is looking for a renters

policy. She has a 75 gallon fish tank and needs liability

coverage for in the event that the tank leaks and damages

the floor in her unit.

Would the HO 04 10/00 form cover this liability loss? I do

not have a copy of the 10/2000 form. But reading the

1991 HO 04 form I understand that liability coverage does

not apply to property damage to property rented to insured

or in their care or custody.

Does that apply to the unit?

Tenant’s policy and property damage to apartment

Under Section II personal liability exclusion one sees:

F. Coverage E – Personal Liability

Coverage E does not apply to:

The ISO HO-91/HO-2000/HO-2011 has same exclusion


There is an additional coverage of $1,000 but that is

it:

The HO-91 only provides $500


We have an insured with an HO-4 (10/00).

They have purchased some land and are going to

be building their new home on the land.

Will the HO-4 provide personal liability coverage for

the land while the home it being built?

Tenant’s policy and building a house

The ISO definition

of "insured

location" in HO-

2000/2011 (as well

as HO-91)

Tenant’s policy and building a house

One of my customers asked if he has a relative living

in the home who is a household member, and the

relative is injured on the premises, can the relative

go back and sue the homeowners for bodily injury?

On the ISO-HO3 form the definition of insured also

includes household members and I know that an

insured cannot sue themselves.

Is this something that commonly happens or

insured's will run into? Please let me know.

•

Insureds suing insureds

All of the ISO editions state that resident relatives are

Insureds ….

This is HO-2000 …but

We have seen the HO-91 and

HO-2011 previously


Anyone can be sued by anyone.

Does ANY ISO HO edition respond ...

MP states it does NOT apply to anyone living in your

household


YES

NO

Coverage E BI/PD excludes an

"insured" suing an "insured" ...

no defense and no payout

and "insured" does include

"resident relative"


A HO client has bought a golf cart and will drive it

on private roads in an association he is a member

of.

His home is on the association property.

Will liability coverage apply?

Not sure but under 4.c. on page 1. the policy form

says “Any premises used by you in connection with

a premises in 4a.” - does this extend coverage?

Golfcarts and HO policy

Hopefully you can help me with our bet.

I say there is coverage Dave along with Company

underwriter says no coverage.

There is a Whole dollar on the line for this question

so I am expecting a positive response in my favor.


The company in question

is an HO-91 carrier


In YOUR question you said PRIVATE roads in an

association … if they are PRIVATE roads …

then the HO-91 should respond per the definition of

“insured location” …

“residence premises” and any premises used in

connection with residence premises …or location used as

a residence a. and b.


The motor vehicle exclusion

under the HO-91 reads:

So it’s a recreational vehicle

Designed for off road use

If owned it can be used

On an insured location (common

Areas)

And

While playing golf on golf course


PRIVATE roads in a HO association SHOULD be considered an

“insured location” …and SHAME SHAME SHAME on a company

that interprets otherwise.

There is NOTHING in the policy that states the premises used in

connection with needs to be ADJACENT to the residence

premises.

SHAME SHAME SHAME if a company takes this standpoint.


If these are PUBLIC roads in an association …

such as “The Villages” in Florida …there could be an issue …

as public roads do not meet the definition of “insured location”

…per se …


The ISO HO-2000 and HO-2011

loves owned golf carts for

liability ANYWHERE in

community including public

roads


Thank you for attending…

Whatcha think

Personal residential issues

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Whatcha - massagent.com think pers... · rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent