LANDLORD INSURANCE POLICY

Transcription

1 LANDLORD INSURANCE POLICY CSE SAFEGUARD INSURANCE COMPANY CORPORATE HEADQUARTERS 2121 North California Blvd. Suite 900 Walnut Creek, CA Toll-Free Number OFFICES LOCATED IN Walnut Creek, California Pasadena, California

2 TABLE OF CONTENTS Landlord Insurance Policy Special Form AGREEMENT... 3 DEFINITIONS... 3 COVERAGES... 5 COVERAGE A - DWELLING... 5 COVERAGE B - OTHER STRUCTURES... 5 COVERAGE D - FAIR RENTAL VALUE... 6 COVERAGE E - ADDITIONAL LIVING EXPENSE... 6 OTHER COVERAGES... 7 PERILS INSURED AGAINST... 9 COVERAGE A - DWELLING AND COVERAGE B - OTHER STRUCTURES... 9 COVERAGE C - PERSONAL PROPERTY GENERAL EXCLUSIONS GENERAL CONDITIONS OPTIONAL COVERAGES DAU REPLACEMENT COST COVERAGE DAU ADDITIONAL INSURED - Residence Premises DAU LOSS ASSESSMENT DAU BROAD FORM PERSONAL THEFT DAU DWELLINGS UNDER CONSTRUCTION DAU CPL COMPREHENSIVE PERSONAL LIABILITY HO WORKERS COMPENSATION RESIDENCE EMPLOYEES - CA DAU OLT PREMISES LIABILITY DAU PI PERSONAL INJURY BFU NS LENDERS LOSS PAYABLE ENDORSEMENT DAU PATHOGENIC ORGANISMS EXCLUSION

3 AGREEMENT We will provide the insurance described in this policy in return for the premium and compliance with all applicable provisions of this policy. DEFINITIONS Throughout this policy, you and your refer to the named insured shown in the Declarations and the spouse if a resident of the same household, and we, us and our refer to the CSE Safeguard Insurance Company. In addition, certain words and phrases are defined as follows: 1. Actual cash value a. When the damage to property is economically repairable, actual cash value means the cost of repairing the damage, less reasonable deduction for wear and tear, deterioration and obsolescence. b. When the loss or damage to property creates a total loss, actual cash value means the market value of property in a used condition equal to that of the destroyed property, if reasonably available on the used market. c. Otherwise, actual cash value shall mean the market value of new, identical or nearly identical property, less reasonable deduction for wear and tear, deterioration and obsolescence. 2. Bodily injury means bodily harm, sickness or disease, including required care, loss of services and death resulting therefrom. 3. Business includes trade, profession or occupation. 4. Day care center means a facility at the residence premises providing day care services for another s child or children: a. with or without compensation; b. on a regular basis; and c. for periods of less than twenty-four hours. Day care services do not include the activities of parents exchanging care of their children on a mutual cooperative basis, or the care of an exchange student at the residence premises. 5. Insured means you and, if an individual, the following residents of your household: a. your relatives; b. any other person under the age of 21 who is in the care of any person named above. Under DAU CPL - Comprehensive Personal Liability, 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 5a. or 5b. A person or organization using or having custody of these animals or watercraft in the course of any business, or without permission of the owner is not an insured; d. with respect to any vehicle to which this policy applies: 3

4 (1) any person while engaged in your employment or the employment of any person included in 5a. or 5b.; or (2) any other person using the vehicle on an insured location with an insured s permission. 6. Insured location means the residence premises. Under DAU CPL - Comprehensive Personal Liability, insured location also means: a. that part of any other premises, other structures and grounds, used by you as a residence and which is shown in the Declarations or which is acquired by you during the policy period for your use as a residence; b. any premises used by you in connection with the residence premises included in 6a. above; c. any part of a premises not owned by an insured but where an insured is temporarily residing; d. vacant land owned by or rented to an insured other than farm land; e. land owned by or rented to an insured on which a one or two family dwelling is being constructed as a residence for an insured; f. individual or family cemetery plots or burial vaults of an insured; g. any part of a premises occasionally rented to an insured for other than business purposes. 7. Motor Vehicle means: a. a motorized land vehicle designed for travel on public roads or subject to motor vehicle registration. A motorized land vehicle in dead storage on an insured location is not a motor vehicle; b. a trailer or semi-trailer designed for travel on public roads and subject to motor vehicle registration. A boat, camp, home or utility trailer not being towed by or carried on a vehicle included in 7.a. is not a motor vehicle; c. a snowmobile or other motorized land vehicle owned by any insured and designed for recreational use off public roads, while off an insured location. A motorized golf cart or a motorized wheel chair is not a motor vehicle; d. any vehicle while being towed by or carried on a vehicle included in 7.a., 7.b. or 7.c. 8. Occurrence means an accident, including exposure to conditions, which results, during the policy period, in bodily injury or property damage. 9. Property damage means physical injury to or destruction of tangible property, including loss of use of this property. 10. Residence employee means an employee of any insured who performs duties in connection with the maintenance or use of the residence premises, including household or domestic services, or who performs duties elsewhere of a similar nature not in connection with the business of an insured. 11. Residence premises means: a. the one to four family dwelling or condominium, other structures and grounds; or b. that part of any other building; that you own or where you reside and which is shown as the Described Location in the Declarations. 4

5 Under DAU Broad Form Personal Theft, it does not include any part of the residence premises rented to others or used for business purposes. 12. Pollutants or Contaminants means any of the following: a. liquid fuels; b. lead or any materials containing lead; c. asbestos or any materials containing asbestos; d. radon; e. formaldehyde or any materials containing formaldehyde; f. electric fields, magnetic fields, electromagnetic fields, power frequency fields, electromagnetic radiation or any other electric or magnetic energy of any frequency; g. carbon monoxide; h. pathogenic or poisonous biological materials; i. acids, alkalis or chemicals; j. radioactive substances; or k. any other irritant or contaminant including waste, vapor, fumes or odors. COVERAGES THIS INSURANCE APPLIES TO THE DESCRIBED LOCATION, COVERAGES FOR WHICH A LIMIT OF LIABILITY IS SHOWN AND PERILS INSURED AGAINST FOR WHICH A PREMIUM IS STATED. COVERAGE A - DWELLING We cover: 1. the dwelling on the Described Location, used principally for dwelling purposes; 2. structures attached to the dwelling; 3. materials and supplies on or adjacent to the Described Location for use in the construction, alteration or repair of the dwelling or other structures on this location; and 4. if not otherwise covered in this policy, building equipment used for the service of and located on the Described Location. This coverage does not apply to land, including land on which the dwelling is located. COVERAGE B - OTHER STRUCTURES We cover other structures on the Described Location, separated from the dwelling by clear space. Structures connected to the dwelling by only a fence, utility line, or similar connection are considered to be other structures. We do not cover: 5

6 1. Land, including land on which the other structure is located; 2. Other structures used in whole or in part for commercial, manufacturing or farming purposes; or 3. Other structures rented or held for rental to any person not a tenant of the dwelling, unless used solely as private garage. COVERAGE C - PERSONAL PROPERTY We cover personal property, usual to the occupancy as a dwelling and owned or used by you or by members of your family residing with you while it is on the Described Location. We will cover at your request, personal property owned by a guest or servant while the property is on the Described Location. We do not cover: 1. accounts, bills, bullion, currency, deeds, evidences of debt, manuscripts, money or securities; 2. animals, birds or fish; 3. aircraft and parts; 4. motor vehicles, or motorized bicycles, other than motorized equipment used to service the Described Location; or 5. boats, other than rowboats and canoes. If you remove personal property from the Described Location to a newly acquired principal residence, the Coverage C limit of liability shall apply at each residence for the 30 days immediately after you begin to move the property there. This time period shall not extend beyond the termination of this policy. Our liability is limited to the proportion of the limit of liability that the value at each residence bears to the total value of all personal property covered by this policy. COVERAGE D - FAIR RENTAL VALUE We cover the fair rental value if a loss to property described in Coverage A, B or C by a Peril Insured Against under this policy makes that part of the Described Location rented to others or held for rental by you unfit for its normal use. Payment shall be for the shortest time required to repair or replace the part of the Described Location rented or held for rental. This period of time is not limited by expiration of this policy. Fair rental value shall not include any expense that does not continue while that part of the Described Location rented or held for rental is unfit for its normal use. If a civil authority prohibits you from use of the Described Location as a result of direct damage to a neighboring location by a Peril Insured Against in this policy, we cover any resulting fair rental value loss for a period not exceeding two weeks during which use is prohibited. We do not cover loss or expense due to cancellation of a lease or agreement. COVERAGE E - ADDITIONAL LIVING EXPENSE We cover the necessary increase in living expenses incurred by you so that your household can maintain its normal standard of living if a loss to property described in Coverage A, B, or C by a Peril Insured Against under this policy makes the Described Location unfit for its normal use. Payment shall be for the shortest time required to repair or replace the Described Location or, if you permanently relocate, the shortest, most reasonable time required for your household to settle elsewhere. The period of time is not limited by 6

7 the expiration of this policy. If a civil authority prohibits you from use of the Described Location as a result of direct damage to neighboring premises by a Peril Insured Against in this policy, we cover the additional living expense for a period not exceeding two weeks during which use is prohibited. We do not cover loss or expense due to cancellation of a lease or agreement. OTHER COVERAGES 1. Other Structures - You may use up to 10% of the Coverage A limit of liability for loss by a Peril Insured Against to other structures described in Coverage B. Use of this coverage does not reduce the Coverage A limit of liability for the same loss. 2. Debris Removal - We will pay the reasonable expense incurred by you for the removal of debris from a property covered by this policy. Debris removal expense is included in the limit of liability applying to the damaged property. 3. Improvements, Alterations and Additions - If you are a tenant of the Described Location, you may use up to 10% of the Coverage C limit of liability for loss by a Peril Insured Against to improvements, alterations and additions made at your expense to that part of the Described Location used only by you. Use of this coverage does not reduce the Coverage C limit of liability for the same loss. 4. World-Wide Coverage - You may use up to 10% of the Coverage C limit of liability for loss by a Peril Insured Against to property covered under Coverage C except rowboats and canoes, while anywhere in the world. Use of this coverage reduces the Coverage C limit of liability for the same loss. 5. Fair Rental Value and Additional Living Expense - You may use up to 10% of the Coverage A limit of liability for loss of both Fair Rental Value as described in Coverage D and Additional Living Expense as described in Coverage E. Use of this coverage does not reduce the Coverage A limit of liability for the same loss. 6. Reasonable Repairs - We will pay up to $5,000 for the reasonable cost you incur for necessary repairs made solely to protect covered property from further damage, if a Peril Insured Against causes the loss. This coverage does not increase the limit of liability applying to the property being repaired. 7. Property Removed - Covered property while being removed from a premises endangered by a Peril Insured Against, and for not more than 30 days while removed is covered for direct loss from any cause. This coverage does not change the limit of liability that applies to the property being removed. 8. Lawns, Plants, Shrubs and Trees - You may apply up to 5% of the Coverage A limit of liability for loss to lawns, plants, shrubs, or trees on the Described Location by fire, lightning, smoke, explosion, riot or civil commotion, aircraft, vehicles except vehicles owned or operated by you or a resident of the Described Location, collapse of a building, and vandalism or malicious mischief, including damage during a burglary or attempted burglary, but not the theft of property. We shall not be liable for more than our proportion of $500 on any one plant, shrub or tree including expense incurred for removing debris thereof. We do not cover property grown for commercial purposes. Payment under this coverage reduces the Coverage A limit of liability by the amount paid. 9. Fire Department Service Charge - We will pay, up to $500, as an additional amount of insurance, for your liability assumed by contract or agreement for fire department charges incurred when the fire department is called to save or protect property from a peril insured against. We do not cover fire 7

8 department service charges if the property is located within the limits of the city, municipality or protection district furnishing the fire department response. 10. Ordinance Or Law a. The Ordinance Or Law limit of liability determined in b. or c. below will apply with respect to the increased costs you incur due to the enforcement of any ordinance or law which requires or regulates: (1) The construction, demolition, remodeling, renovation or repair of that part of a covered building or other structure damaged by a Peril Insured Against; (2) The demolition and reconstruction of the undamaged part of a covered building or other structure, when that building or other structure must be totally demolished because of damage by a Peril Insured Against to another part of that covered building or other structure; or (3) The remodeling, removal or replacement of the portion of the undamaged part of a covered building or other structure necessary to complete the remodeling, repair or replacement of that part of the covered building or other structure damaged by a Peril Insured Against. b. If you are an owner of a Described Location, and that location: (1) Is insured for Coverage A or Unit-Owners Building Items, you may use up to 10% of the limit of liability that applies to Coverage A or Unit-Owners Building Items at each Described Location; or (2) Is not insured for Coverage A or Unit-Owners Building Items, you may use up to 10% of the total limit of liability that applies to Coverage B at each Described Location. c. If you are a tenant of a Described Location, you may use up to 10% of the limit of liability that applies to Improvements, Alterations and Additions at each Described Location. Also, the words covered building used throughout this Other Coverages 10. Ordinance Or Law, refer to property at such a Described Location covered under Other Coverages 3. Improvements, Alterations and Additions. d. You may use all or part of this ordinance or law coverage to pay for the increased costs you incur to remove debris resulting from the construction, demolition, remodeling, renovation, repair or replacement of property as stated in a. above. e. We do not cover: (1) The loss in value to any covered building or other structure due to the requirements of any ordinance or law; or (2) The costs to comply with any ordinance or law which requires you or others to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, Pollutants or Contaminants in or on any covered building or other structure. (3) A loss due to any ordinance or law that: (a) you were required to comply with before the loss, even if the building was undamaged; and (b) you failed to comply with. This coverage applies only if you choose to repair or rebuild your home at its present location. This coverage is additional insurance. 8

9 DEDUCTIBLE In case of loss under Section I of this policy, we cover only that part of the loss over the deductible stated in the Declarations. The deductible does not apply to Coverage D - Fair Rental Value, Coverage E - Additional Living Expense or Fire Department Service Charge. PERILS INSURED AGAINST COVERAGE A - DWELLING AND COVERAGE B - OTHER STRUCTURES We insure for direct physical loss to property described in Coverages A and B except: 1. losses excluded under General Exclusions; 2. freezing of a plumbing, heating, air conditioning system or of a household appliance, or by discharge, leakage or overflow from within the system or appliance caused by freezing, while the dwelling is vacant, unoccupied or being constructed unless you have used reasonable care to: a. maintain heat in the building; or b. shut off the water supply and drain the system and appliances of water. 3. freezing, thawing, pressure or weight of water or ice, whether driven by wind or not, to a fence, pavement, patio, swimming pool, foundation, retaining wall, bulkhead, pier, wharf or dock; 4. theft of any property which is not actually part of any building or structure covered; 5. theft in or to a dwelling or structure under construction; 6. wind, hail, ice, snow or sleet to outdoor radio and television antennas and aerials including their lead-in wiring, masts or towers, or to lawns, trees, shrubs or plants. 7. vandalism and malicious mischief, theft or attempted theft or breakage of glass and safety glazing materials if the dwelling has been vacant for more than 30 consecutive days immediately before the loss. A dwelling being constructed is not considered vacant; 8. continuous or repeated seepage or leakage of water or steam over a period of time from within a plumbing, heating or air conditioning system or from within a household appliance; 9. wear and tear; marring; deterioration; inherent vice; latent defect; mechanical breakdown; rust; mold; wet or dry rot; smoke from agricultural smudging or industrial operations; release, discharge or dispersal of contaminants or pollutants; settling, cracking, shrinking, bulging or expansion of pavements, patios, foundations, walls, floors, roofs or ceilings; birds, vermin, rodents, insects or domestic animals. If any of these cause water to escape from a plumbing, heating, air conditioning system or of a household appliance, we cover loss caused by the water. We also cover the cost of tearing out and replacing any part of a building necessary to repair the system or appliance. We do not cover loss to the system or appliance from which the water escaped. Under items 2. through 9., any ensuing loss not excluded is covered. 9

10 COVERAGE C - PERSONAL PROPERTY We insure for direct physical loss of property described in Coverage C caused by: 1. Fire or lightning. 2. Windstorm or hail. This peril does not include loss to the property contained in a building caused by rain, snow, sleet, sand or dust unless the direct force of wind or hail damages the building causing an opening in a roof or wall and the rain, snow, sleet, sand or dust enters through this opening or to: a. Plants, shrubs or trees; b. Canoes or rowboats. 3. Explosion. 4. Riot or civil commotion. 5. Aircraft, including self-propelled missiles and spacecraft. 6. Vehicles. 7. Smoke, meaning sudden and accidental damage from smoke. 8. Vandalism or malicious mischief. This peril does not include loss by pilferage, theft, burglary or larceny. 9. Damage by Burglars, meaning damage to covered property caused by burglars. This peril does not include: a. Theft of property; or b. Damage caused by burglars to property on the Described Location if the dwelling has been vacant for more than 30 consecutive days immediately before the damage occurs. 10. Falling objects. This peril does not include loss to property contained in a building unless the roof or an exterior wall of the building is first damaged by a falling object. Damage to the falling object itself is not included, 11. Weight of ice, snow or sleet; which causes damage to property contained in a building. 12. Collapse of a building or any part of a building. This peril does not include settling, cracking, shrinking, bulging or expansion. 13. Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning system or from within a household appliance. This peril does not include loss: a. to the system or appliance from which the water or steam escaped; b. caused by or resulting from freezing; c. on the Described Location caused by accidental discharge or overflow which occurs off the Described Location. 14. Sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system, an air conditioning system or an appliance for heating water. 10

11 We do not cover loss caused by or resulting from freezing under this peril. 15. Freezing of a plumbing, heating, air conditioning system or of a household appliance. This peril does not include loss on the Described Location while the dwelling is unoccupied, unless you have used reasonable care to: a. maintain heat in the building; or b. shut off the water supply and drain the system and appliances of water. 16. Sudden and accidental damage from artificially generated electrical current. This peril does not include loss to a tube, transistor or similar electric component. GENERAL EXCLUSIONS We do not cover loss caused by any of the following excluded perils, whether occurring alone or in any sequence with a covered peril: 1. Earth Movement, which means any loss caused by, resulting from, contributed to, or aggravated by: a. the sinking, rising, shifting, expanding, or contracting of earth, all whether combined with water or not. Earth movement includes, but is not limited to, earthquake, landslide, mudflow, mudslide, sinkhole, subsidence, movement resulting from improper compaction, site selection or any other external forces, erosion including collapse or subsidence of land along a body of water as a result of erosion or undermining resulting from the action of water. This includes the channeling of a river or stream; b. erosion, shifting or displacement of materials supporting the foundation; and c. volcanic blast, volcanic explosion, shockwave, lava flow, lahars, and fallout of volcanic particulate matter. This exclusion applies whether the earth movement is caused by or resulting from human or animal forces, or any act of nature. Direct loss by fire or explosion is covered. 2. Water Damage, which means: a. (1) flood, surface water, waves, tidal water, tsunami, seiche, overflow of a body of water, storm surge or spray from any of these, whether or not driven by wind, including hurricane or similar storm; or (2) release of water held by a dam, levee, dike or by a water or flood control device or structure; or b. water below the surface of the ground, including that which exerts pressure on, or seeps or leaks through a building, wall, bulkhead, sidewalk, driveway, foundation, swimming pool, hot tub or spa, including their filtration and circulation systems or other structure; or c. water which escapes or overflows from sewers or drains located off the Described Location; or d. water which escapes or overflows from drains or related plumbing appliances on the residence premises; or 11

12 e. water which escapes or overflows or discharges, for any reason, from within a sump pump, sump pump well or any other system designed to remove water which is drained from the foundation area. Water includes any water-borne materials. This exclusion applies whether the water damage is caused by or resulting from human or animal forces or any act of nature. Direct loss by fire, explosion or theft resulting from water damage is covered. 4. Power Interruption, meaning the interruption of power or other utility service if the interruption takes place away from the Described Location. If a Peril Insured Against ensues on the Described Location, we will pay only for loss caused by the ensuing peril. 5. Neglect, meaning your failure to use all reasonable means to save and preserve property at and after the time of a loss. 6. War, including undeclared war, civil war, insurrection, rebellion, revolution, warlike act by a military force or military personnel, destruction or seizure or use for a military purpose, and including any consequence of any of these. Discharge of a nuclear weapon shall be deemed a warlike act even if accidental. 7. Nuclear Hazard, to the extent set forth in the Nuclear Hazard Clause of the Conditions. 8. Intentional Loss, which means any loss arising out of any act you or any person or organization named as an additional insured commits or conspires to commit with the intent to perform the act or cause a loss. In the event of such loss, neither you nor any such person or organization is entitled to coverage, even those who did not commit or conspire to commit the act causing the loss. 9. Acts or Decisions, including the failure to act or decide, of any person, group, organization or governmental body. However, any ensuing loss not excluded or excepted in this policy is covered. 10. Weather Conditions that contribute in any way with a cause or event excluded in this section to produce a loss. However, any ensuing loss not excluded or excepted in this policy is covered. 11. Planning, Construction or Maintenance, meaning faulty, inadequate or defective: a. planning, zoning, development, surveying, siting; b. design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction; c. materials used in repair, construction, renovation or remodeling; or d. maintenance; of property whether on or off the residence premises by any person or organization. However, any ensuing loss not excluded or excepted in this policy is covered. 12. Pollution or Contamination, which means loss resulting from the production, use, storage, discharge, dispersal, seepage, migration, release, escape, emission, transmission, absorption, or contamination of or by pollutants or contaminants whether actual, alleged or threatened at any time, and however caused, and whether or not within the knowledge or control of an insured. Direct loss by fire resulting from pollution or contamination is covered. 12

13 GENERAL CONDITIONS 1. Policy Period and Changes a. The effective time of this policy is 12:01 A.M. Standard Time at the Described Location. This policy applies only to loss which occurs during the policy period. The policy may be renewed for successive policy periods if the required premium is paid and accepted by us on or before the expiration of the current policy period. The premium will be computed at our then current rate for coverage then offered. b. Changes: (1) Before the end of any policy period, we may offer to change the coverage provided in this policy. Your payment of the premium billed by us for the next policy period will be your acceptance of our offer. (2) This policy contains all agreements between you and us. If a change requires a premium adjustment, we will adjust the premium as of the effective date of change. Additional or return premiums of $6.00 or less will be waived. 2. Insurable Interest and Limit of Liability. Even if more than one person has an insurable interest in the property covered, we shall not be liable: a. for an amount greater than the interest of a person insured under this policy; or b. for more than the limit of liability that applies. 3. Concealment or Fraud. This policy will be void if an insured has, before or after a loss; a. intentionally concealed or misrepresented any material fact or circumstance; or b. made false statements or engaged in fraudulent conduct relating to this insurance. 4. Your Duties After Loss. In case of a loss to which this insurance may apply, you shall see that the following duties are performed: a. give prompt notice to us or our agent; b. protect property from further damage, make reasonable and necessary repairs required to protect the property, and keep an accurate record of repair expenses; c. prepare an inventory of damaged personal property showing in detail, the quantity, description, actual cash value and amount of loss. Attach to the inventory all bills, receipts and related documents that substantiate the figures in the inventory; d. as often as we reasonably require: (1) exhibit the damaged and undamaged property; (2) provide us with records and documents we request and permit us to make copies; and (3) submit to examinations under oath and subscribe the same; e. submit to us, within 60 days after we request, your signed, sworn proof of loss which sets forth, to the best of your knowledge and belief: (1) the time and cause of loss; 13

14 (2) the interest of you and all others in the property involved and all encumbrances on the property; (3) other insurance which may cover the loss; (4) changes in title or occupancy of the property during the term of the policy; (5) specifications of damaged buildings and detailed estimates for repair of the damage; (6) an inventory of damaged personal property described in 4.c.; (7) receipts for Additional Living Expenses incurred and records supporting the Fair Rental Value loss. 5. Loss Settlement. Covered property losses are settled as follows: a. personal property and structures that are not buildings at actual cash value at the time of loss but not exceeding the amount necessary to repair or replace; b. carpeting, domestic appliances, awnings, outdoor antennas and outdoor equipment, whether or not attached to buildings, at actual cash value at the time of loss but not exceeding the amount necessary to repair or replace; c. buildings under Coverage A or B at replacement cost without deduction for depreciation, subject to the following; (1) We will pay the full cost of repair or replacement, without deduction for depreciation, but not exceeding the smallest of the following amounts: (a) the limit of liability under this policy applying to the building; (b) the replacement cost of that part of the damaged building for equivalent construction and use on the same premises as determined shortly following the loss; or (c) the amount actually and necessarily spent to repair or replace the damaged building. (2) When the cost to repair or replace the damage is more than $2,500, we will pay the difference between actual cash value and replacement cost only after the damaged or destroyed property has actually been repaired or replaced. (3) You may disregard the replacement cost loss settlement provisions and make claim under this policy for loss or damage to buildings on an actual cash value basis. You may still make claim for any additional liability on a replacement cost basis after actual repair or replacement is completed. 6. Loss to a Pair or Set. In case of loss to a pair or set we may elect to: a. repair or replace any part to restore the pair or set to its value before the loss; or b. pay the difference between actual cash value of the property before and after the loss. 7. Glass Replacement. Covered loss to glass shall be settled on the basis of replacement with safety glazing materials when required by ordinance or law. 8. Appraisal. If you and we do not agree on the amount of loss, either can demand that the amount of the loss be set by appraisal. If either makes a written demand for appraisal, each shall select a competent, independent appraiser and notify the other of the appraiser s identity within 20 days of receipt of the written demand. The two appraisers shall then select a competent, impartial umpire. If 14

15 the two appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state of the Described Location to select an umpire. The appraisers shall then set the amount of the loss. If the appraisers submit a written report of agreement to us, the amount agreed upon shall be the amount of the loss. If the appraisers fail to agree within a reasonable time, they shall submit their differences to the umpire. Written agreement signed by any two of these three shall set the amount of the loss. Each appraiser shall be paid by the party selecting that appraiser. Other expenses of the appraisal and the compensation of the umpire shall be paid equally by you and us. 9. Other Insurance. If property covered by this policy is also covered by other fire insurance, we will pay only the proportion of the loss caused by any peril insured against under this policy that the limit of liability applying under this policy bears to the total amount of fire insurance covering the property. 10. Subrogation. You may waive in writing before a loss all rights of recovery against any person. If not waived, we may require an assignment of rights of recovery for a loss to the extent that payment is made by us. If an assignment is sought, the person insured shall sign and deliver all related papers and cooperate with us in any reasonable manner. 11. Suit Against Us. No action shall be brought unless there has been compliance with the policy provisions and the action is started within one year after the loss or damage. 12. Our Option. If we give you written notice within 30 days after we receive your signed, sworn statement of loss, we may repair or replace any part of the property damaged with equivalent property. 13. Loss Payment. We will adjust all losses with you. We will pay you unless some other person is named in the policy or is legally entitled to receive payment. Loss will be payable 30 days after we receive your proof of loss and: a. reach agreement with you; or b. there is an entry of a final judgment; or c. there is a filing of an appraisal award with us. 14. Abandonment of Property. We need not accept any property abandoned by you. 15. Mortgage Clause. The word mortgagee includes trustee or lien holder. If a mortgagee is named in this policy, any loss payable under Coverage A or B shall be paid to the mortgagee and you, as interests appear. If more than one mortgagee is named, the order of payment shall be the same as the order or precedence of the mortgages. If we deny your claim, that denial shall not apply to a valid claim of the mortgagee, if the mortgagee: a. notifies us of any change in ownership, occupancy or substantial change in risk of which the mortgagee is aware; b. pays any premium due under this policy on demand if you have neglected to pay the premium; c. submits a signed, sworn statement of loss within 60 days after receiving notice from us of your failure to do so. Policy conditions relating to Appraisal, Suit Against Us and Loss Payment apply to the mortgagee. 15

16 If the policy is canceled by us, the mortgagee shall be notified at least 20 days before the date cancellation takes effect. If we pay the mortgagee for any loss and deny payment to you: a. we are subrogated to all the rights of the mortgagee granted under the mortgage on the property; or b. at our option, we may pay to the mortgagee the whole principal on the mortgage plus any accrued interest. In this event, we shall receive a full assignment and transfer of the mortgage and all securities held as collateral to the mortgage debt. Subrogation shall not impair the right of the mortgagee to recover the full amount of the mortgagee s claim. 16. No Benefit to Bailee. We will not recognize any assignment or grant any coverage for the benefit of any person or organization holding, storing or transporting property for a fee regardless of any other provision of this policy. 17. Cancellation. a. You may cancel this policy at any time by returning it to us or by notifying us in writing of the date cancellation is to take effect. b. We may cancel this policy only for the reasons stated in this condition by notifying you in writing of the date cancellation takes effect. This cancellation notice may be delivered to you, or mailed to you at your mailing address shown in the Declarations. Proof of mailing shall be sufficient proof of notice. (1) When you have not paid the premium whether payable to us or to our agent or under any finance or credit plan, we may cancel at any time by notifying you at least 20 days before the date cancellation takes effect. (2) When this policy has been in effect for less than 60 days and is not a renewal with us, we may cancel for any reason by notifying you at least 31 days before the date cancellation takes effect. (3) When this policy has been in effect for 60 days or more, or at any time if it is a renewal with us, we may cancel if there has been: (a) conviction of a crime having as one of its necessary elements an act increasing the hazard insured against; or (b) discovery of fraud or material misrepresentation; or (c) discovery of grossly negligent acts or omissions substantially increasing any of the hazards insured against; or (d) physical changes in the property insured against which result in the property becoming uninsurable. This can be done by notifying you at least 31 days before the date cancellation takes effect. c. When this policy is canceled, the premium for the period from the date of cancellation to the expiration date will be refunded. When the policy is canceled, the return premium will be pro rated. d. If, when we cancel this policy, the return premium is not refunded with the notice of cancellation, we will refund it within 25 days after the date cancellation takes effect. If when you cancel this 16

17 policy, the return premium is not refunded when this policy is returned to us, we will refund it within a reasonable time after the date cancellation takes effect. 18. Nonrenewal. We may elect not to renew this policy. We may do so by delivery to you, or mailing to you at your mailing address shown in the Declarations, written notice at least 45 days before the expiration date of this policy. Proof of mailing shall be sufficient proof of notice. 19. Liberalization Clause. If we revise this policy to provide more coverage without additional premium charge, your policy will automatically provide the additional coverages as of the date the revision is effective. 20. Waiver or Change of Policy Provisions. A waiver or change of any provision of this policy must be in writing by us to be valid. Our request for an appraisal or examination shall not waive any of our rights. 21. Assignment. Assignment of this policy shall not be valid unless we give our written consent. 22. Death. If you die, we insure: a. your legal representative but only with respect to the property covered under the policy at the time of death; b. with respect to your property, the person having proper temporary custody of the property until appointment and qualification of a legal representative. 23. Nuclear Hazard Clause. a. Nuclear Hazard means any nuclear reaction, radiation or radioactive contamination, all whether controlled or uncontrolled or however caused, or any consequence of any of these. b. Loss caused by the nuclear hazard shall not be considered loss caused by fire, explosion, or smoke, whether these perils are specifically named in or otherwise included within the Perils Insured Against. c. This policy does not apply to loss caused directly or indirectly by nuclear hazard, except that direct loss by fire resulting from the nuclear hazard is covered. 24. Your Duties to Maintain Policy Limits. It is your responsibility to maintain adequate amounts of insurance on your dwelling and personal property. To simplify your responsibility of keeping them insured to value during fluctuating economic conditions, we will adjust annually, either up or down, your policy limits. This adjustment will be made on the renewal date of your policy, applied pro rata during the policy period, and will be based upon factors for your area supplied us by recognized appraisal agencies. You will be notified in advance of the new amount of coverage. Payment of your renewal is all that is necessary to indicate your acceptance of the new amount. 25. Recovered Property. If you or we recover any property for which we have made payment under this policy, you or we will notify the other of the recovery. At your option, the property will be returned to or retained by you or it will become our property. If the recovered property is returned to or retained by you, you will return to us the amount you received for the recovered property. 17

18 OPTIONAL COVERAGES AGREEMENT WE WILL PROVIDE THE INSURANCE DESCRIBED IN EACH OF THE FOLLOWING OPTIONAL COVERAGES ONLY IF INDICATED IN THE DECLARATIONS. DAU REPLACEMENT COST COVERAGE This endorsement only applies if a premium has been charged on the Declarations and paid. For an additional premium, item 5.c.(1)(a) under General Conditions, shall not apply to Coverage A - Dwelling. In its place, the following shall apply. We will settle covered losses to the dwelling under Coverage A up to 125% of the limit of liability shown in the Declarations for Coverage A. You agree to: 1. insure the dwelling to 100% of its replacement cost as determined by us, 2. accept any yearly adjustments by us of Coverage A reflecting changes in the cost of construction for the area. 3. notify us of any addition or other remodeling which increases the replacement cost of the dwelling $5,000 or more: a. within 90 days of the start of construction; or b. before the end of the current policy period whichever is greater, and pay any resulting additional premium; and 4. repair or replace the damaged dwelling If you fail to comply with any of the above provisions, item 5.c.(1)(a) General Conditions shall apply to Coverage A - Dwelling. All other provisions of this policy apply. DAU ADDITIONAL INSURED - Residence Premises Name and Address of Person or Organization* Interest* The definition of insured in this policy includes the person or organization named above with respect to: Coverage A - Dwelling and Coverage B - Other Structures; and DAU CPL - Personal Liability and Medical Payments to Others or DAU OLT - Premises Liability but only with respect to the residence premises. This coverage does not apply to bodily injury to any employee arising out of or in the course of the employee s employment by the person or organization. If we decide to cancel or not to renew this policy, the party named above will be notified in writing. 18

19 *Entries may be left blank if shown elsewhere in this policy for this coverage. All other provisions of this policy apply. DAU LOSS ASSESSMENT This endorsement only applies if a premium has been charged on the Declarations and paid. For an additional premium, we agree to pay your share of any loss assessment charged during the policy period against you by the association of property owners up to the limit of liability stated in the Declarations, when the assessment is made as a result of: 1. each direct loss to the property owned by all members collectively, caused by a Peril Insured Against, other than Earthquake or Volcanic Eruption, under this policy; 2. each occurrence to which Comprehensive Personal Liability, Premises Liability or other liability insurance covering the Described Location would apply; 3. liability for each act of a director, officer or trustee in the capacity as a director, officer or trustee, provided; a. the director, officer or trustee is elected by the members of the association of property owners; and b. the director, officer or trustee serves without deriving any income from the exercise of his/her duties, which are solely on behalf of the association of property owners. Exclusion 3.b.(1)(a). Under DAU CPL - Comprehensive Personal Liability and exclusion 3.l.(1). Under DAU OLT - Premises Liability are deleted. SPECIAL LIMIT - We will not pay more than $1000 of your assessment per unit that result from a deductible in the insurance purchased by the association of property owners. DEDUCTIBLE - We will pay only that part of your assessment per unit that exceeds $250. No other deductible applies to this coverage. All other provisions of this policy apply. DAU BROAD FORM PERSONAL THEFT This endorsement only applies if a premium has been charged on the Declarations and paid. 1. Agreement We will provide the insurance described in this optional coverage in return for an additional premium and compliance with all applicable provisions of the policy. 2. Coverages This insurance applies only to the coverages and classes of property for which a Limit of Liability and Premium are shown in the Declarations. a. Coverage TA - On Premises. 19

20 We cover: (1) jewelry and furs, meaning jewelry, watches, precious and semi-precious stones, articles of gold or platinum and furs and articles containing fur; (2) all other personal property. while the property is: (1) in the part of the residence premises occupied by an insured; (2) in other parts of the described premises not occupied exclusively by an insured, if the property is owned or used by an insured or owned by a residence employee; (3) placed for safekeeping in any: (a) bank, trust or safe deposit company; (b) public warehouse; or (c) occupied dwelling not owned, rented to or occupied by an insured. b. Coverage TB - Off Premises We cover the property described in Coverage TA (1) and (2), while away from the residence premises; (1) owned or used by an insured; (2) owned by a residence employee while in a dwelling occupied by an insured or while engaged in the employment of the insured. This coverage does not apply to any loss payable under Coverage TA or Automatic Removal. c. Special Limits of Liability These limits do not increase the Coverage TA limit of liability that applies to (2) All Other Personal Property. The special limit for each following numbered category is the total limit for each occurrence for all property in that numbered category: (1) $100 on money, bank notes, bullion and coins. (2) $500 on securities, accounts, deeds, evidences of debt, letters of credit, notes other than bank notes, manuscripts, passports, tickets and stamps. (3) $500 on watercraft, including their trailers, furnishings, equipment and outboard motors. d. Property Not Covered. We do not cover: (1) aircraft, motor vehicles, trailers or their equipment; (2) property held as a sample or for sale or delivery after sale; (3) animals or birds; (4) property of tenants, roomers and boarders not related to an insured; (5) business property of an insured or residence employee away from the residence premises; (6) property while: 20

21 (a) at any other residence owned, rented to or occupied by any insured, except while an insured is temporarily residing there; (b) in the custody of any laundry, cleaner, tailor, presser or dyer except for loss by burglary or robbery; (c) in the mail. (7) Property specifically described and separately insured by any other insurance. 3. Additional Coverages a. Premises Damage - Insurance under Coverage TA applies to damage: (1) to the residence premises; or (2) to the interior of the residence premises; provided an insured is the owner of the building or is liable for the damage. This coverage does not increase the limit of liability that applies to Coverage TA (2) All Other Personal Property. b. Premises Rented to Others - Insurance under Coverage TA applies: (1) while the residence premises is rented to others for use as a private residence; and (2) to property owned by an insured or a residence employee. We do not cover while the residence premises is rented to others: (a) money, bank notes, bullion, coins: securities, accounts, deeds, evidence of debt, letters of credit, notes other than bank notes, passports, tickets, stamps and manuscripts: jewelry, watches, precious and semi-precious stones, articles of gold or platinum and furs; or (b) loss caused by a tenant of the residence premises or any employee or member of the household. c. Automatic Removal - If, during the term of this policy, you move to a newly acquired principal residence premises, the limit of liability for Coverage TA shall apply at each residence and in transit for a period of thirty days after you begin to move the property there. When the moving is completed, Coverage TA applies at the new residence premises only. 4. Deductible The deductible stated in the Declarations applies to each occurrence and will be subtracted from the amount of the loss, without regard to policy limit(s) or Special Limits of Liability under Coverage TA - On Premises and Coverage TB - Off Premises. 5. Perils Insured Against We insure for direct loss of or damage to the property covered caused by: a. Theft, including attempted theft. b. Mysterious disappearance. This peril does not include loss of a precious or semi-precious stone from its setting in a watch or piece of jewelry. c. Vandalism or malicious mischief. This peril does not include loss to the exterior of buildings on the residence premises. 21