Dwelling Fire Policy

Dwelling Fire Policy AGREEMENT We will provide the insurance described in this policy in return for the premium and your compliance with all provisions of this policy including endorsements. DEFINITIONS Words which appear in bold print, other than titles and headings, have the meaning given them in this section. 1. Accident means an undesigned, unexpected and rapidly occurring event. 2. Accidental means undesigned, unexpected and rapidly occurring. 3. Aircraft means any contrivance used or designed for navigation of or flight in the air, except model aircraft of the hobby variety not used or designed for the transportation of people or cargo. 4. Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. 5. Volcanic action means lava flow, airborne shock waves, ash, dust or other particulate matter caused by or resulting from volcanic eruption. 6. We, us and our refer to the Company providing this insurance. 7. You and your refer to the person shown on the Declarations Page as an insured and that person's spouse and the relatives of either if a resident of your household. LIMITS OF INSURANCE Regardless of the number of persons insured under this policy, the most we will pay for any one loss is the applicable limit of insurance shown herein or on the Declarations Page. PROPERTY COVERED 1. COVERAGE A - DWELLING When a limit of insurance for COVERAGE A - DWELLING is shown on the Declarations Page, we cover the property described below while at a location described on the Declarations Page: a. Your dwelling including your property attached to the dwelling. Coverage is not provided for structures which are connected to the dwelling by only a fence, utility line, or similar connection; and b. Your materials and supplies to be used in the construction, alteration or repair of the dwelling; and DH 25-04 (09-02) Page 1

PROPERTY COVERED (CONTINUED) c. Your equipment including your outdoor equipment which is connected or attached to and servicing the dwelling. 2. COVERAGE B - APPURTENANT STRUCTURES When a limit of insurance for COVERAGE B - APPURTENANT STRUCTURES is shown on the Declarations Page, we cover your structures at a location shown on the Declarations Page which are not attached to a covered dwelling or which are attached only by a fence, utility line or similar connection. 3. COVERAGE C - PERSONAL PROPERTY When a limit of insurance for COVERAGE C - PERSONAL PROPERTY is shown on the Declarations Page, we cover your personal property that is at a location shown on the Declarations Page and that is usual to the occupancy of a dwelling. LOSSES COVERED We insure you against financial loss resulting from accidental direct physical loss of or damage to covered property caused by any of the following perils: 1. Fire or lightning. 2. Windstorm or hail. This peril does not include loss to: a. the inside of a building or to the property contained therein caused by rain, snow, sleet, sand or dust unless the direct force of the 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 b. the following property when outside of the building: (1) awnings, signs, radio or television antennas or aerials including their lead-in wiring, masts and towers whether attached to the building or not; or (2) canoes and rowboats. 3. Explosion. This peril does not include loss by explosion of steam boilers or steam pipes owned or rented by you or operated under your control. Explosion does not mean: a. electric arcing; b. breakage of water pipes; c. breakage or operation of pressure relief devices. 4. Riot or civil commotion. This does not include vandalism or malicious mischief not ensuing from a riot or civil commotion. 5. Aircraft. DH 25-04 (09-02) Page 2

LOSSES COVERED (CONTINUED) 6. Vehicles. This peril does not include loss caused by: 7. Smoke. a. any vehicle owned or operated by you or by a resident of the property at the location shown on the Declarations Page; or b. any vehicle to fences, driveways or walkways. 8. Volcanic action. PROPERTY NOT COVERED We do not cover: 1. land, land values or the cost of excavations and site preparations; 2. fuel storage tanks regardless of whether or not such tanks are currently used; 3. lawns, trees, shrubs and plants; 4. structures used in whole or in part for commercial (other than incidental office) or farming purposes; 5. structures rented or held for rental to any person not a tenant of a covered dwelling unless used solely as a private garage; 6. accounts, bank notes, notes other than bank notes, bills, deeds, evidences of debt, letters of credit, securities, tickets and stamps, bullion, precious and semi precious metals including silverware or goldware, watches, jewelry and fur, coins, medals and all other philatelic and numismatic property, money, money orders, checks and travelers checks, manuscripts, passports, personal records; 7. animals meaning all living things; 8. aircraft and aircraft parts; 9. motor vehicles and motorized land conveyances including: a. their equipment, parts and accessories; and b. any device or instrument for the transmitting, recording, receiving or reproduction of sound or pictures which is operated by power from the electrical system of motor vehicles or all other motorized land conveyances including: (1) accessories or antennas; and (2) tapes, wires, records, discs or other media for use with any such device or instrument; while in or upon the vehicle or conveyance. DH 25-04 (09-02) Page 3

PROPERTY NOT COVERED (CONTINUED) This exclusion does not apply to vehicles or conveyances which are not subject to motor vehicle registration and which are used to service the described location or which are designed for assisting the handicapped; 10. watercraft other than rowboats and canoes; 11. data regardless of the media on which such data is stored or contained; This exclusion does not apply to the cost of blank stock including blank electronic recording or storage media; 12. credit cards, debit cards or fund transfer cards including any consequential loss. OTHER COVERAGES Subject to all terms, conditions and applicable limits of insurance of this policy, we provide the following other coverages: 1. Appurtenant Structures Regardless of whether or not an amount of insurance is shown on the Declarations Page for COVERAGE B - APPURTENANT STRUCTURES, you may apply up to 10% of the limit of insurance shown on the Declarations Page for COVERAGE A - DWELLING for loss or damage to your detached structures including structures which are connected to the covered dwelling by only a fence, utility line, or similar connection. Any payment we make under this extension of coverage shall reduce the amount we would otherwise be required to pay under COVERAGE A - DWELLING as a result of any one accident. 2. Loss of Use We will pay, as an additional amount of insurance, up to 10% of the limit of insurance for COVERAGE A - DWELLING for: a. your net loss of rental income for that part of the covered dwelling rented to others or held by you for rental to others; and b. if you occupy the dwelling or any part of the dwelling, your additional living expense necessarily incurred. When a civil authority, as a result of direct physical damage caused by a peril insured against to property at a neighboring location, prohibits use of the covered property at the location shown on the Declarations Page, we will pay for your loss of net rental income and necessarily incurred additional living expenses for a period of not more than two (2) consecutive weeks. This civil authority coverage extension shall not increase the amount we would otherwise be liable for as per a. and b. above. DH 25-04 (09-02) Page 4

OTHER COVERAGES (CONTINUED) 3. World-Wide Coverage When a limit of insurance for COVERAGE C - PERSONAL PROPERTY is shown on the Declarations Page, we will pay as an additional amount of insurance up to 10% of that limit of insurance for loss of or damage to your covered personal property while situated anywhere in the world. This extension of coverage does not apply to rowboats or canoes or to covered property at a location not shown on the Declarations Page but which is owned by you. 4. Property Removed Subject to the applicable limit of insurance shown on the Declarations Page, we will cover covered property while removed from the described location. This extension of coverage applies only if such removal is made necessary because of a covered loss and then only for five (5) days following such removal. 5. Fire Department Service Charge We will pay as an additional amount of insurance up to five hundred (500) dollars for your liability assumed by contract or agreement for fire department service charges when the fire department is called to save or protect covered property from a peril insured against. The deductible does not apply to this coverage extension. 6. Building Ordinance Subject to the applicable limit of insurance, we will pay up to two thousand five hundred (2,500) dollars for increases in an otherwise covered loss made necessary by reason of any ordinance or law regulating the use, construction, repair or demolition of covered structures. This coverage extension does not increase any of the limits of insurance shown herein or on the Declarations Page. DEDUCTIBLE Subject to the applicable limit of insurance, we will pay no more than the amount by which any loss exceeds the deductible amount shown on the Declarations Page. This provision applies to each separately occurring loss. BASIS OF LOSS PAYMENT 1. Dwelling and Other Structures and Personal Property We will not pay more than the actual cash value of the property lost or damaged not to exceed the amount required to repair or replace, at the same premises, with property of like kind, quality and use. DH 25-04 (09-02) Page 5

BASIS OF LOSS PAYMENT (CONTINUED) In the event of loss of or damage to part of a pair or set, we will not pay more than the smaller of the following: a. the amount required to repair or replace the lost or damaged part of the pair or set; or b. the amount representing the difference between the actual cash value of the pair or 2. Loss of Use set before the loss and the actual cash value of what remains of the pair or set after the loss. a. Rental Income We will not pay more than your net loss of rental income actually and necessarily incurred. Covered loss shall be limited by the time necessary to repair or replace the damaged covered property at the same location not to exceed twelve (12) months from the date of the loss or damage. b. Additional Living Expense We will not pay more than the increase in your living expenses necessarily incurred during the time necessary to repair or replace the damaged covered property at the same location not to exceed twelve (12) months from the date of the loss or damage. LOSS NOT COVERED BY THIS POLICY 1. We do not insure you against loss of or damage to covered property resulting directly or indirectly from any of the following, however caused: a. earth movement including earthquake, volcanic eruption, landslide, mudflow, and earth sinking, rising or shifting. If fire, explosion or volcanic action ensues, we will be liable only for the ensuing direct damage from the fire, explosion or volcanic action; b. flood, surface water, waves, tidal water, overflow of any body of water, or spray from any of them even if driven by wind. c. water which backs up through or overflows from a sewer or drain. DH 25-04 (09-02) Page 6

LOSS NOT COVERED BY THIS POLICY (CONTINUED) d. water below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure. e. the presence of or the release, discharge, escape, dispersal, seepage or migration of pollutants; f. war, including undeclared or civil war; warlike action by a military force, including action in hindering or defending against an actual or expected attack, by any government, sovereign or other authority using military personnel or other agents; insurrection, rebellion, revolution, usurped power, or action taken by governmental authority in hindering or defending against any of these; g. nuclear reaction or radiation, or radioactive contamination, however caused. If fire ensues we will be liable only for the ensuing direct damage caused by that fire; h. enforcement of any building ordinance or law regulating the use, construction, repair or demolition of property. This exclusion does not apply to coverage provided for in item 6. Building Ordinance, of the OTHER COVERAGES section of this policy; i. acts or decisions, including the failure to act or decide, of any person, group, or organization or government body. If direct physical loss of or damage to covered property from a peril insured against results, we will pay only for that resulting loss or damage; j. the failure of power or other utility service supplied to a covered location if the failure originates away from that covered location. If direct physical loss of or damage to covered property from a peril insured against results, we will pay for that resulting loss or damage; k. willful acts committed by or at the direction of any insured; l. rain, snow, sleet, sand or dust to the inside of a building or to the property contained therein 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. DH 25-04 (09-02) Page 7

LOSS NOT COVERED BY THIS POLICY (CONTINUED) m. wind or hail to the following property when outside of the building: (1) awnings, signs, radio or television antennas or aerials including their lead-in wiring, masts and towers whether attached to the building or not; or (2) canoes and rowboats. n. explosion of steam boilers or steam pipes owned or rented by you or operated under your control. If fire ensues we will be liable only for the ensuing direct damage from the fire; o. breakage of water pipes. This exclusion does not apply if such breakage is caused by any of the following: (1) fire or lightning; (2) riot or civil commotion. This does not include vandalism or malicious mischief not ensuing from a riot or civil commotion; (3) aircraft; (4) vehicles not owned or operated by you or by a resident of the property at the location shown on the Declarations Page. If fire ensues we will be liable only for the ensuing direct damage from the fire; p. breakage or operation of pressure relief devices. This exclusion does not apply if such breakage or operation of pressure relief devices is caused by any of the following: (1) fire or lightning; (2) riot or civil commotion. This does not include vandalism or malicious mischief not ensuing from a riot or civil commotion; (3) aircraft; (4) vehicles not owned or operated by you or by a resident of the property at the location shown on the Declarations Page. If fire ensues we will be liable only for the ensuing direct damage from the fire; q. electric arcing. If fire ensues we will be liable only for the ensuing direct damage from the fire; DH 25-04 (09-02) Page 8

LOSS NOT COVERED BY THIS POLICY (CONTINUED) r. vandalism or malicious mischief not ensuing from a riot or civil commotion. s. damage caused by vehicles that are owned or operated by you or by a resident of the property at the location shown on the Declarations Page. t. damage caused by vehicles to fences, driveways or walkways. fire or explosion. 2. In addition, we do not insure you against any of the following losses, however caused: a. settling, cracking, shrinking, bulging or expansion of any structure including pavements. b. wear and tear, deterioration, mechanical breakdown, inherent vice, latent or patent defect, rust, mold, wet or dry rot, insects or vermin. c. delay, loss of use or other consequential loss. This exclusion does not apply to item 2., Loss of Use, contained in the OTHER COVERAGES section of this policy. YOUR DUTIES FOLLOWING A LOSS 1. You shall at your expense: a. Give us written notice of any loss as soon as practicable. b. File with us a detailed sworn statement of loss within ninety (90) days after the loss unless this time is extended by us in writing, setting forth to the best of your knowledge and belief: (1) The time and cause of loss. (2) Your interest and that of all others in the property involved. (3) Other policies of insurance that may cover the loss. (4) Changes in title or occupancy of the property during the term of this policy. DH 25-04 (09-02) Page 9

YOUR DUTIES FOLLOWING A LOSS (CONTINUED) (5) The amounts you claim for loss under each coverage provided by this policy accompanied by all exhibits and documents necessary to support the amounts claimed. c. Do all things and produce all documents reasonably required to establish values, loss and damage and coverage for the loss. 2. You shall at our expense submit and subscribe to examinations under oath by any person named by us. REPRESENTATIONS By accepting this policy you agree that: 1. the statements on the Declarations Page are accurate and complete; and 2. those statements are based upon representations you made to us; and 3. we have issued this policy in reliance upon your representations. 4. CONCEALMENT, MISREPRESENTATION OR FRAUD This policy shall be void if any insured, whether before or after a loss, has intentionally concealed or misrepresented any material fact or circumstance or made false statements or engaged in fraudulent conduct relating to this insurance. WAIVER OR CHANGE OF POLICY PROVISIONS This policy contains all the agreements between you and us concerning this insurance. A waiver or change of any provision of this policy must be in writing by us to be valid. A request for an arbitration or examination under oath shall not waive any of our rights or any of your rights. TIME OF LOSS This policy applies only to losses which occur during the policy period shown on the Declarations Page. MANDATORY ARBITRATION In case we fail to agree with you as to the meaning or effect of any provision of this policy or as to the amount payable in accordance with the express terms of this policy for any covered loss the disagreement shall be resolved by binding arbitration in accordance with the statutory rules and procedures of the state in which the property is located. Should an arbitration under the terms of this clause result in any of the following, we will reimburse you for expenses actually incurred by you with respect to the arbitration, including reasonable attorney's fees, in a sum to be determined by the arbitrator(s): DH 25-04 (09-02) Page 10

MANDATORY ARBITRATION (CONTINUED) 1. a finding of coverage for claimed loss or damage for which coverage is denied by us; 2. a finding that you are entitled to a loss payment in accordance with the express terms of this policy and exclusive of costs or attorney s fees in an amount that exceeds the amount of any offer made by us in writing to settle your claim at any time up to thirty (30) days prior to the commencement of the arbitration. The provisions of this clause are mandatory and may be enforced either by you or by us. COMPANY'S OPTION It shall be our option to take all, or any part, of the property at the agreed or appraised value or to repair, rebuild or replace the property destroyed or damaged with other property of like kind and quality within a reasonable time provided we give notice of our intention to do so within thirty (30) days after receipt of the required statement of loss. TIME LIMITATION FOR ACTION No suit, demand for an arbitration or other action on this policy for the recovery of any claim shall be sustainable in any court or other forum unless all the requirements of this policy shall have been complied with and unless commenced within twelve (12) months after the inception of the loss. PROPERTY OF OTHERS At our option we may adjust losses with the owner of the property. Any payment made by us shall be limited to the owner's financial interest in the lost or damaged property and shall satisfy your claim against us. If legal proceedings are taken to enforce a claim against you for any such loss or damage, we reserve the right to conduct and control the defense on your behalf. No action by us in such regard shall increase our liability under this policy nor increase the limits specified in this policy. EXAMINATION OF YOUR BOOKS AND RECORDS We may examine and audit your books and records as they relate to this policy at any time during the policy period and up to three (3) years after the cancellation or expiration of this policy whichever is first. OTHER INSURANCE We will not pay a greater portion of any loss than the limit of insurance for the loss under this policy bears to the total of the limits of insurance for the loss under all policies which cover the loss or which would cover the loss but for the existence of this policy, except insurance written specifically to cover as excess over the limits of insurance that apply in this policy. DH 25-04 (09-02) Page 11

RECOVERY FROM THIRD PARTIES 1. You may waive your rights of recovery against any party in writing before an accident. 2. Within ninety (90) days after an accident, you may waive your rights of recovery against any party who at the time of the accident is: a. Shown on the Declarations Page. b. Your tenant. c. Owned or controlled by you or owns or controls you. Subject to the above we may require an assignment of your rights of recovery against any party for loss to the extent that payment for that loss is made by us. SALVAGE AND RECOVERY Any recovery from third parties or salvage recovery on a loss will accrue entirely to our benefit until the sum paid by us has been made up. But we will be entitled to any other recovery only after you have been fully compensated for the full value of the property lost. WHEN LOSS IS PAYABLE The amount of loss for which we may be liable will be payable thirty (30) days after the required statement of loss is received and agreed to in writing by us or an arbitration award is received by us. CANCELLATION AND NON-RENEWAL 1. 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. 2. We may: a. cancel this policy for non payment of premium by giving you fifteen (15) days written notice; or b. non-renew this policy for any reason by giving you at least sixty (60) days, but not more than one hundred twenty (120) days, written notice to be effective at the next anniversary or expiration date of the policy, whichever is first. We will also mail such notice of cancellation or non-renewal to each mortgagee or other person or entity shown on this policy to have an insurable interest in the covered property. We will state the reason for cancellation or non-renewal on the written notice. Any pro-rata premium due you will be refunded within a reasonable time after the cancellation takes effect. DH 25-04 (09-02) Page 12

MORTGAGEE INTERESTS AND OBLIGATIONS Loss shall be payable to a mortgagee named on the Declarations Page subject to its mortgage interest in the covered property. As to that mortgage interest, this insurance shall not be affected by any: 1. Act or neglect of the mortgagor or owner of the covered property. 2. Foreclosure or other proceeding or notice of sale relating to the covered property. 3. Change in title or ownership of the covered property. In case the mortgagor or owner shall neglect to pay any premium due under this policy, the mortgagee shall, on demand, pay that premium. If you fail to render a statement of loss, a named mortgagee, upon notice, shall render a statement of loss within sixty (60) days thereafter and shall be subject to all of the provisions of this policy. If we cancel this policy any named mortgagee shall be notified in accordance with the cancellation provisions of this policy. To the extent of any payment for loss under this policy which we make to any mortgagee and for which we claim we are not liable to the mortgagor or owner, we will be subrogated to all of the rights of the mortgagee under the mortgage. Or we may pay the whole mortgage debt including accrued interest in return for a full assignment and transfer of the mortgage and all other securities for that debt. NO BENEFIT TO BAILEE This insurance shall not directly or indirectly benefit any carrier or other bailee. DH 25-04 (09-02) Page 13