HO 2011 - CHANGES TO BUSINESS PROPERTY COVERAGE SPONSORED BY
HO 2011- Changes to Business Property Coverages Robin Federici, CPCU, AAI, ARM, AINS, AIS, CPIW PO BOX 781 NORTH KINGSTOWN, RI 02852 Phone: 401-294-3557 Fax: 401-294-3557 Robin s Cell-401-529-9617 Fred s Cell-401-524-4567 E-mail: ROBINF@IETA.BIZ EFEDERICI@IETA.BIZ Web site: WWW.IETA.BIZ 1
This material has been designed for use in training programs for insurance industry personnel. It is not intended to be used as a complete reference resource on the programs and coverages outlined herein. The programs use standard policy forms and endorsements for the purposes of discussing the exposures to loss that may exist, some of the coverage options available to treat them, and to provide a framework for discussions with carriers you represent concerning the programs they have available. Coverages, rules and materials presented during this program may differ from those used by individual insurance companies. Contact individual carriers for details about interpretations of their eligibility requirements, particular insurance contracts and rates. Copyright 2013 by Insurance Education & Training Associates, LLC. All rights reserved. This document or any part thereof may not be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information retrieval system, without the express written consent of Insurance Education & Training Associates, LLC. Inquires should be addressed to: PO Box 781, North Kingstown, RI 02852 E-Mail: robinf@ieta.biz. 2
HOMEOWNER S 2011 PROGRAM INTRODUCTION Basic Information: o Most jurisdictions accepted the new HO form as of May 1, 2011. What Does the New Program do? The filing includes changes which both broaden and reduce coverage Some of the revisions are major and some are just minor editorial changes Clarifies some coverages and definitions according to court decisions Amends some coverages Introduces a new Coverage C sublimit Provides more clarification of the collapse coverage Broadens theft coverage for students living away from home Amends both the water and earth movement exclusions Adds liability coverage for some electronic toy vehicles Includes endorsement changes **Special Program Note** Any form numbers, references of wording, is from the ISO HO-3 policy. However, the policy language and most of the changes apply to the other forms as well 3
SECTION I PROPERTY COVERAGES CHANGES & AMENDMENTS HO 91 Program Coverage B Other Structures We will cover other structures on the residence premises set apart from the dwelling by clear space. This includes structures connected to the dwelling by only a fence, utility line, or similar connection. This coverage does not apply to land, including land on which the other structures are located. We do not cover other structures: (1) used in whole or in part for business ; or (2) Rented or held for rental to any person not a tenant of the dwelling, unless used solely as a private garage. The limit of liability for this coverage will not be more than 10% of the limit of liability that applies to Coverage A. Use of this coverage does not reduce the Coverage A limit of liability. HO 01 & 11 B. Coverage B Other Structures 1. We will cover other structures on the residence premises set apart from the dwelling by clear space. This includes structures connected to the dwelling by only a fence, utility line, or similar connection. 2. We do not cover: a. Land, including land on which the other structures are located; b. Other structures rented or held for rental to any person not a tenant of the dwelling, unless used solely as a private garage; c. Other structures from which any business is conducted; or d. Other structures used to store business property. However, we do cover a structure that contains business property solely owned by an insured or a tenant of the dwelling provided that business property does not include gaseous or liquid fuel, other than fuel in a permanently installed fuel tank of a vehicle or craft parked or stored in the structure. 3. The limit of liability for this coverage will not be more than 10% of the limit of liability that applies to Coverage A. Use of this coverage does not reduce the Coverage A limit of liability. 4
SECTION I PROPERTY COVERAGES CHANGES & AMENDMENTS COVERAGE C SPECIAL LIMITS OF LIABILITY HO 91 Program HO 01 & 11 8. $2500 on property, on the "residence premises," used at any time or in any manner for any "business" purpose. h. $2,500 on property, on the "residence premises", used primarily for "business" purposes. HO 01 only 9. $250 on property, away from the "residence premises," used at any time or in any manner for any "business" purpose. However, this limit does not apply to loss to adaptable electronic apparatus as described in Special Limits 10. and 11. below. i. $500 on property, away from the "residence premises", used primarily for "business" purposes. However, this limit does not apply to loss to electronic apparatus and other property described in Categories j. and k. below. ELIMINATION HO 11 has eliminated this specific category 5
HO 91 Program 10. $1000 for loss to electronic apparatus, while in or upon a motor vehicle or other motorized land conveyance, if the electronic apparatus is equipped to be operated by power from the electrical system of the vehicle or conveyance while retaining its capability of being operated by other sources of power. Electronic apparatus includes: a. Accessories or antennas; or b. Tapes, wires, records, discs or other media; for use with any electronic apparatus. HO 01 only j. $1,500 on electronic apparatus and accessories, while in or upon a "motor vehicle", but only if the apparatus is equipped to be operated by power from the "motor vehicle's" electrical system while still capable of being operated by other power sources. Accessories include antennas, tapes, wires, records, discs or other media that can be used with any apparatus described in this Category j. HO 01 only 11. $1000 for loss to electronic apparatus, while not in or upon a motor vehicle or other motorized land conveyance, if the electronic apparatus: a. Is equipped to be operated by power from the electrical system of the vehicle or conveyance while retaining its capability of being operated by other sources of power; b. Is away from the "residence premises"; and c. Is used at any time or in any manner for any "business" purpose. Electronic apparatus includes: k. $1,500 on electronic apparatus and accessories used primarily for "business" while away from the "residence premises" and not in or upon a "motor vehicle". The apparatus must be equipped to be operated by power from the "motor vehicle's" electrical system while still capable of being operated by other power sources. Accessories include antennas, tapes, wires, records, discs or other media that can be used with any apparatus described in this Category k. a. Accessories and antennas; or b. Tapes, wires, records, discs or other media; for use with any electronic apparatus. 6
HO 11 i. $1,500 on property, away from the "residence premises", used primarily for "business" purposes. However, this limit does not apply to antennas, tapes, wires, records, disks or other media that are: (1) Used with electronic equipment that reproduces, receives or transmits audio, visual or data signals; and (2) In or upon a "motor vehicle". Endorsement Amended Increased Limits on Business Property (HO 04 12 ) is being revised to reflect the change in the off premises business property sublimit. Since the sublimit is being tripled (from $500 to $1,500), the percentage shown in the endorsement is being changed from 20% to 60%. 7
POLICY NUMBER: HOMEOWNERS HO 04 12 05 11 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. INCREASED LIMITS ON BUSINESS PROPERTY SCHEDULE Increase In Limit Of Liability Total Limit Of Liability $ $ $ $ $ $ Information required to complete this Schedule, if not shown above, will be shown in the Declarations. SECTION I PROPERTY COVERAGES Coverage C Personal Property 3. Special Limits Of Liability a. The Special Limit Of Liability in Category 3.h. that applies to "business" property on the "residence premises" is increased by the Increase In Limit Of Liability shown in the Schedule above. This Increase In Limit Of Liability does not apply to "business" property: (1) In storage or held: (a) As a sample; or (b) For sale or delivery after sale; or (2) That pertains to a "business" actually conducted on the "residence premises". b. The Special Limit of Liability in Category 3.i. that applies to "business" property away from the residence premises" is increased to an amount that is 60% of the Total Limit Of Liability shown in the Schedule. This endorsement does not increase the limit of liability for Coverage C. All other provisions of this policy apply. 8
POLICY NUMBER: HOMEOWNERS HO 04 12 10 00 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. INCREASED LIMITS ON BUSINESS PROPERTY SCHEDULE* Increase In Limit Of Liability Total Limit Of Liability * Entries may be left blank if shown elsewhere in this policy for this coverage. SECTION I PROPERTY COVERAGES Coverage C Personal Property 3. Special Limits Of Liability a. The Special Limit Of Liability in Category 3.h. that applies to "business" property on the "residence premises" is increased by the Increase In Limit Of Liability shown in the Schedule above. This Increase In Limit Of Liability does not apply to "business" property: (1) In storage or held: a. As a sample; or b. For sale or delivery after sale; or (2) That pertains to a "business" actually conducted on the "residence premises". b. The Special Limit Of Liability in Category 3.i. that applies to "business" property away from the "residence premises" is increased to an amount that is 20% of the Total Limit Of Liability shown in the Schedule. The Special Limit Of Liability in Category 3.i. does not apply to electronic apparatus as described in Categories 3.j. and k. This endorsement does not increase the limit of liability for Coverage C. All other provisions of this policy apply. 9
HO 91 Program HO 11 j. $1,500 on portable electronic equipment that: (1) Reproduces, receives or transmits audio, visual or data signals; (2) Is designed to be operated by more than one power source, one of which is a "motor vehicle's" electrical system; and (3) Is in or upon a "motor vehicle". HO 04 65: Coverage C Increased Special Limits of Liability Endorsement Electronics in a vehicle limit can be increased 10
HO 91 Program HO 11 k. $250 for antennas, tapes, wires, records, disks or other media that are: (1) Used with electronic equipment that reproduces, receives or transmits audio, visual or data signals; and (2) In or upon a "motor vehicle". 11
POLICY NUMBER: HOMEOWNERS HO 04 65 10 00 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. COVERAGE C INCREASED SPECIAL LIMITS OF LIABILITY SCHEDULE* SECTION I PROPERTY COVERAGES COVERAGE C PERSONAL PROPERTY 3. Special Limits Of Liability The special limits of liability are increased as noted below: Property Increase In Total Limit Limit Of Liability Of Liability a. Money, bank notes, bullion, gold other than goldware, silver other than silverware, platinum other than platinumware, coins, medals, scrip, stored value cards and smart cards. b. Securities, accounts, deeds, evidences of debt, letters of credit, notes other than bank notes, manuscripts, personal records, passports, tickets and stamps. e. Jewelry, watches, furs, precious and semiprecious stones for loss by theft, but not more than $1,000 for any one article. f. Firearms and related equipment for loss by theft. g. Silverware, silver-plated ware, goldware, goldplated ware, platinumware, platinum-plated ware and pewterware for loss by theft. j. Electronic apparatus and accessories, while in or upon a "motor vehicle", but only if the apparatus is equipped to be operated by power from the "motor vehicle's" electrical system while still capable of being operated by other power sources. k. Electronic apparatus and accessories used primarily for "business" while away from the "residence premises" and not in or upon a "motor vehicle". The apparatus must be equipped to be operated by power from the "motor vehicle's" electrical system while still capable of being operated by other power sources. All other provisions of this policy apply. *Entries may be left blank if shown elsewhere in this policy for this coverage. 12
POLICY NUMBER: HOMEOWNERS HO 04 65 05 11 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. COVERAGE C INCREASED SPECIAL LIMITS OF LIABILITY SCHEDULE SECTION I PROPERTY COVERAGES COVERAGE C PERSONAL PROPERTY 3. Special Limits Of Liability The special limits of liability are increased as noted below: Property Increase In Total Limit Limit Of Liability Of Liability a. Money, bank notes, bullion, gold other than goldware, silver other than silverware, platinum other than platinumware, coins, medals, scrip, stored value cards and smart cards. b. Securities, accounts, deeds, evidences of debt, letters of credit, notes other than bank notes, manuscripts, personal records, passports, and stamps. e. Jewelry, watches, furs, precious and semiprecious stones for loss by theft, but not more than any one article. f. Firearms and related equipment for loss by theft. g. Silverware, silver-plated ware, goldware, gold-plated ware, platinumware, platinum-plated ware and pewterware for loss by theft. j. Portable electronic equipment that: (1) Reproduces, receives or transmits audio, visual or data signals; (2) Is designed to be operated by more than one power source, one of which is a "motor vehicle's" electrical system; and (3) Is in or upon a "motor vehicle". All other provisions of this policy apply. Information required to complete this Schedule, if not shown above, will be shown in the Declarations 13
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