covers fire, lightning, windstorm, hail, aircraft, riot or civil commotion, vehicles, explosion, smoke, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action. It also provides limited coverage for fungus, wet rot, dry rot, and bacteria. The limit of insurance is up to $15,000 for all losses occurring in a 12-month period that begins with the policy to prevent redundancy. Coverage for water damage is provided when accidental discharge or leakage of water or steam occurs as the direct result of the breaking apart or cracking of a plumbing, heating, air conditioning, or other system or or appliance that is located on the described premises and contains water or steam. Coverage is NOT provided for discharge or leakage from an automatic sprinkler leakage system, a sump or related equipment, roof drains, gutters, downspouts, etc. Neither is coverage provided if continuous or repeated seepage or leakage of water takes place over a period of 14 or more days. Plumbing is not covered. The Causes of Loss- Broad Form contains the same exclusions, additional coverages, and limitation found in the basic form; however, it also includes the Additional Coverage- Collapse. The Limitations section of the special causes of loss form contains language not found in the basic and broad forms, such as;
* No coverage is provided for most damage to steam boilers and equipment due to events inside the boilers and equipment.
* No coverage is provided for damage to the interior of a building caused by rain, snow, sleet, ice, sand, or dust unless the exterior of the building or structure first sustains damage.
*No coverage is provided for inventory shortage.
* No coverage is provided for the following , unless specifically endorsed: fragile articles and builders machinery, tools, and equipment.
* Special limits of insurance apply to the following classes of personal property: $2,500 for furs and fur garments; $2,500 for jewelry, watches, jewels, precious and semi-precious stones, gold, silver, etc.; $2,500 for patterns, dies, molds, and forms; $250 for stamps, tickets, and letters of credit.
a.) Completed additions; outdoor fixtures; and permanently installed fixtures, machinery, and equipment. For example, a print shop that owns four commercial printers that are affixed to the cement floor would insure the printers as building items rather than items of business personal property.
b.) Personal property owned by the named insured and used to service and maintain the insured building, structures, and premises. Lawn mowing and snow removal equipment not otherwise excluded fall into this category of business personal property. Also included are materials and supplies of the business that are on the premises or within 100 feet of the premises.
c.) If the named insured is making an addition to an insured building or structure, or conducting alterations or repairs on an insured building or structure, the materials, equipment, supplies, and temporary structures used in connection with these activities are insured as building items if they are located on the described location or within 100 feet of it.
Although most classes of property may be insured on the Building and Personal property Coverage Form, certain classes of property are not covered. They are either uninsurable or must be insured separately. Types of property not covered on the Building and Personal Property Coverage Form include:
*Accounts, bills, currency, food stamps, or other evidences of debt, money, notes, and securities are not covered
* Animals, unless they are owned by others and boarded by the named insured OR owned by the insured when they are "stock" and inside buildings.
* Autos held for sale, including cars, trucks, motorcycles, motor homes, etc.
* Bridges, roadways, sidewalks, patios, and other paved surfaces.
* Contraband, stolen property, or property used in the course of illegal transportation or trade.
* The cost of excavations, grading, backfilling, or filling.
*Motorized vehicles that are not autos and are held for sale by the insured.
*When outside of buildings: grain, hay, straw, other crops; fences, radio and TV antennas and their wiring, masts or towers; trees, shrubs, or plants that are not "stock."
*The foundations of buildings, structures, machinery, or boilers if the foundations are below the lowest basement floor or the surface of the ground if there is no basement.
*Land, including land on which covered buildings and structures are located, water, or growing crops, and lawns.
* Personal property while it is being transported in the air or on water.
* Bulkheads, pilings, piers, wharves, or docks.
*Property insured by this policy under another coverage part, or property specifically insured on another policy.
* Retaining walls that are not part of a building and underground pipes, flues, and drains.
* Electronic data, including information, facts, and computer programs and the cost to replace or restore such information.
* Vehicles and self-propelled machines, including aircraft and watercraft, if they're licensed for use on public roads OR are operated principally away from the described premises.
*Property manufactured, processed, or warehoused by the insured.
*Rowboats and canoes out of water at the described location.
a.) The insured may extend a maximum amount of $1,000 to cover loss to outdoor fences, detached signs, antennas, trees, shrubs, and plants. A sublimit of of $250 applies to any one tree, shrub, or plant to any one tree, shrub, or plant.
b.) The perils covered by this extension are fire, lightning, explosion, riot or civil commotion, and aircraft.
1.) If, at the time of loss, the building where loss or damage occurs has been vacant for more than 60 consecutive days before the loss, there is no coverage for loss resulting from the following six perils: vandalism, sprinkler leakage, building glass breakage, water damage, theft or attempted theft, glass breakage, or water damage. For all other covered causes of loss, loss payment will be reduced by 15%.
2.) If the insured is a tenant, the portion of the building rented or leased to the insured is considered vacant if it doesn't contain enough business personal property to conduct customary operations. Buildings under construction or renovation are not considered vacant.
3.) If an insured desires coverage for vandalism, sprinkler leakage, building glass breakage, theft or attempted theft, and water damage for a building that remains vacant beyond the basic 60 days stated in the vacancy provision, it may request a vacancy permit endorsement to cover the excluded perils during a term of vacancy. This endorsement allows the 60- day Vacancy Condition to be waived for the "permit period." If the insurer doesn't agree to add the endorsement, the insured should purchase a specialty vacant property policy.
In the event of a loss, the value of covered property will be determined as follows:
1.) Actual cash value at the time of loss, except as provided below.
a.) If the coinsurance requirement is met, and the loss is $2,500 or less, the policy will pay for building repairs or replacement. However, the following property will continue to be valued at actual cash value even when attached to the building: (1) Awnings or floor coverings
(2)Appliances (3) Outdoor equipment or furniture
b.) Stock the named insured has sold, but not delivered, at selling price, less discounts ant expenses the insured otherwise would have had.
c.) Glass at the cost of replacement with safety glazing material if required by law.
d.) Tenant's Improvement and Betterments at actual cash value if repairs are made promptly, at a proportion of the insured's original cost if repairs are not made promptly, and no payment is made if repairs or replacement are paid for by others.
The insured is required to insure all covered property to a percentage of its replacement value; failure to do so results in a penalty in the event of partial losses. The is 80%. Any applicable loss penalty is determined based on the percentage of insurance to value. For example, assume a building with a $100,000 loss. If the amount of insurance on the dwelling were $40,000 , the policy would only pay 50% of the $10,000 loss, or $5,000, before application of the deductible. Because the building is insured to one-half the amount required by the coinsurance clause ($80,000), the loss penalty will be 50%. The formula that is applied in the event of a partial loss is as follows: The policy will pay to each mortgage holder shown in the Declarations its share of a covered loss or damage, in order of precedence, as its interests may appear.
1.) The mortgage holder will be paid, even if coverage is denied to the insured, subject to certain provisions. Payment will be made to the mortgage holder, but only if the mortgage holder:
a.) Pays any premiums due if the insured hasn't done so.
b.) Submits a signed, sworn, proof of loss within 60 days of being notified that the insured failed to submit such proof of a loss; AND
c.) Has notified the insurer of any change in ownership, occupancy, or substantial change in risk about which it was aware.
2.) If the insurer pays a mortgage holder, it must assign its rights of recovery, and rights under the terms of the mortgage, to the insurer. If the insurer cancels the policy, it must give all mortgage holders advance written notice subject to the terms of the policy.