SECTION I DWELLING PROPERTY 3

DWELLING

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SECTION I

DWELLING PROPERTY 3 – SPECIAL FORM

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

In this policy, "you" and "your" refer to the "named

insured" shown in the Declarations and the spouse if

a resident of the same household. "We," "us" and

"our" refer to the Company providing this insurance.

In addition, certain words and phrases are defined as

follows:

1. “Contamination” (“contaminants”) means impair-

ment or impurity due to either an accidental or in-

tentional mixture or contact with a foreign sub-

stance, including, but not limited to, biological,

chemical, or toxic agents.

2. “Described Location” means the one to four family

dwelling including structures attached to it, sepa-

rate structures, and grounds, shown in the Decla-

rations used principally for dwelling purposes.

3. “Fungi” means any type or form of fungus, includ-

ing mold or mildew, and any mycotoxins, spores,

scents or by-products produced or released by

“fungi”.

4. “Insured” means you and a “Domestic Partner” of

the named insured if a resident of the same

household. (“Domestic Partner” means an adult

who is not related to the named insured by blood,

who has continually lived with the named insured

for at least six months and plans to do so perma-

nently, and is mutually responsible along with the

named insured for their common welfare, and

who maintains no other domestic partnership or

legally recognized marriage.) When the word an

immediately precedes the word "insured", the

words an "insured" together mean one or more

"insureds".

5. “Water” means water (H

O) alone, including mois-

ture, steam or humidity, whether frozen or not or

natural or artificial including any liquid or sludge

which contains “water”, whether or not combined

with any other chemicals or impurities.

DEDUCTIBLE

Unless otherwise noted in this policy, the following

deductible provision applies:

Subject to the policy limits that apply, we will pay only

that part of the total of all loss payable that exceeds

the deductible amount shown in the Declarations.

Section I

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.

A. Coverage A – Dwelling

1. We cover:

a. The dwelling on the “Described Location”

shown in the Declarations, used principally

for dwelling purposes, including structures

attached to the dwelling;

b. Materials and supplies located on or next to

the “Described Location” used to construct,

alter or repair the dwelling or other struc-

tures on the “Described Location”; and

c. If not otherwise covered in this policy, build-

ing equipment and outdoor equipment used

for the service of and located on the “De-

scribed Location”.

2. We do not cover land, including land on which

the dwelling is located.

B. Coverage B – Other Structures

1. We cover other structures on the “Described

Location”, set apart from the dwelling by clear

space. This includes structures connected to

the dwelling by only a fence, utility line or simi-

lar 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, un-

less used solely as a private garage;

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c. Other structures used in whole or in part for

commercial, manufacturing or farming pur-

poses. However, we do cover a structure

that contains commercial, manufacturing or

farming property solely owned by you or a

tenant of the dwelling provided that such

property does not include gaseous or liquid

fuel, other than fuel in a permanently in-

stalled fuel tank of a vehicle or craft parked

or stored in the structure; or

d. Gravemarkers, including mausoleums.

3. 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 Cov-

erage B.

C. Coverage C – Personal Property

1. Covered Property

We cover personal property, usual to the oc-

cupancy as a dwelling and owned or used by

you or members of your family residing with

you while it is on the “Described Location”. Af-

ter a loss and at your request, we will cover

personal property owned by a guest or servant

while the property is on the “Described Loca-

tion”.

2. Property Not Covered

We do not cover:

a. Accounts, bank notes, bills, bullion, coins,

currency, deeds, evidences of debt, gold

other than goldware, letters of credit, manu-

scripts, medals, money, notes other than

bank notes, passports, personal records,

platinum other than platinumware, securi-

ties, silver other than silverware, tickets,

stamps, scrip, stored value cards and smart

cards;

b. Animals, birds or fish;

c. Aircraft meaning any contrivance used or

designed for flight including any parts

whether or not attached to the aircraft.

We do cover model or hobby aircraft not

used or designed to carry people or cargo;

d. Hovercraft and parts. Hovercraft means a

self-propelled motorized ground effect vehi-

cle and includes, but is not limited to, flare-

craft and air cushion vehicles;

e. Motor vehicles or all other motorized land

conveyances.

(1) This includes:

(a) Their accessories, equipment and

parts; or

(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

and all other motorized land convey-

ances, and its accessories. Accesso-

ries include antennas, tapes, wires,

records, discs or other media that

can be used with any device or in-

strument described above.

The exclusion of property described in

(a) and (b) above applies only while

such property is in or upon the vehicle

or conveyance.

(2) We do cover motor vehicles or other

motorized land conveyances not re-

quired to be registered for use on public

roads or property which are:

(a) Used solely to service the “De-

scribed Location”; or

(b) Designed to assist the handicapped;

f. Watercraft of all types, other than rowboats

and canoes;

g. Data, including data stored in:

(1) Books of account, drawings or other

paper records; or

(2) Computers and related equipment;

We do cover the cost of blank recording or

storage media, and of prerecorded com-

puter programs available on the retail mar-

ket;

h. Credit cards, electronic fund transfer cards

or access devices used solely for deposit,

withdrawal or transfer of funds;

i. “Water” or steam; or

j. Gravemarkers, including mausoleums.

3. Property Removed To A Newly Acquired

Principle Residence

If you remove personal property from the “De-

scribed Location” to a newly acquired principal

residence, the Coverage C limit of liability will

apply at each residence for the 30 days imme-

diately after you begin to move the property

there. This time period will not extend beyond

the termination of this policy. Our liability is lim-

ited 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.

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D. Coverage D – Fair Rental Value

1. 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 Loca-

tion” rented to others or held for rental by you

unfit for its normal use, we cover the fair rental

value of that part of the “Described Location”

rented to others or held for rental by you less

any expenses that do not continue while that

part of the “Described Location” rented or held

for rental is not fit to live in.

Payment will be for the shortest time required

to repair or replace that part of the “Described

Location” rented or held for rental.

2. If a civil authority prohibits you from use of the

“Described Location” as a result of direct dam-

age to a neighboring location by a Peril Insured

Against in this policy, we cover the Fair Rental

Value loss for no more than two weeks.

3. The periods of time referenced above are not

limited by the expiration of this policy.

4. We do not cover loss or expense due to can-

cellation of a lease or agreement.

Section I

OTHER COVERAGES

1. Debris Removal

We will pay your reasonable expense for the

removal of:

a. Debris of covered property if a Peril Insured

Against causes the loss; or

b. Ash, dust or particles from a volcanic erup-

tion that has caused direct loss to a building

or property contained in a building.

However, we will not pay any expenses in-

curred by you or anyone acting on your behalf

to:

(1) extract pollutants from land or ““water””; or

(2) remove, restore or replace polluted land or

“water”.

This expense is included in the limit of liability

that applies to the damaged property.

2. 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.

3. Reasonable Repairs

a. In the event that covered property is dam-

aged by a Peril Insured Against, we will pay

the reasonable cost incurred by you for

necessary measures taken solely to protect

against further damage.

b. If the measures taken involve repair to

other damaged property, we will pay for

those measures only if that property is cov-

ered under this policy and the damage to

that property is caused by a Peril Insured

Against. This coverage does not:

(1) Increase the limit of liability that applies

to the covered property; or

(2) Relieve you of your duties, in case of a

loss to covered property, as set forth in

Condition D.2.

4. Property Removed

We insure covered property against direct loss

from any cause while being removed from a

premises endangered by a Peril Insured

Against and for no more than 30 days while

removed.

This coverage does not change the limit of li-

ability that applies to the property being re-

moved.

5. Trees, Shrubs And Other Plants

We cover trees, shrubs, plants or lawns, on the

“Described Location” for loss caused by the fol-

lowing Perils Insured Against:

a. Fire or lightning;

b. Explosion;

c. Riot or civil commotion;

d. Aircraft;

e. Vehicles not owned or operated by you or a

resident of the “Described Location”; or

Vandalism or malicious mischief, including

damage during a burglary or attempted bur-

glary, but not theft of property.

The limit of liability for this coverage will not be

more than 5% of the Coverage A limit of liabil-

ity, or more than $500 for any one tree, shrub

or plant. We do not cover property grown for

commercial purposes.

This coverage is additional insurance.

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6. Fire Department Service Charge

We will pay up to $500 for your liability as-

sumed by contract or agreement for fire de-

partment charges incurred when the fire de-

partment is called to save or protect covered

property from a Peril Insured Against. We do

not cover fire department service charges if the

property is located within the limits of the city,

municipality or protection district furnishing the

fire department response.

This coverage is additional insurance. No de-

ductible applies to this coverage.

7. Collapse

a. With respect to this Other Coverage:

(1) Collapse means an abrupt falling down

or caving in of a building or any part of a

building with the result that the building

or part of the building cannot be occu-

pied for its current intended purpose.

(2) A building or any part of a building that

is in danger of falling down or caving in

is not considered to be in a state of col-

lapse.

(3) A part of a building that is standing is

not considered to be in a state of col-

lapse even if it has separated from an-

other part of the building.

(4) A building or any part of a building that

is standing is not considered to be in a

state of collapse even if it shows evi-

dence of cracking, bulging, sagging,

bending, leaning, settling, shrinkage or

expansion.

b. We insure for direct physical loss to cov-

ered property involving collapse of a build-

ing or any part of a building if the collapse

was caused by one or more of the follow-

ing:

(1) The Perils Insured Against named under

Coverage C;

(2) Decay that is hidden from view, unless

the presence of such decay is known to

you prior to collapse;

(3) Insect or vermin damage that is hidden

from view, unless the presence of such

damage is known to you prior to col-

lapse;

(4) Weight of contents, equipment, animals

or people;

(5) Weight of rain or snow which collects on

a roof; or

(6) Use of defective material or methods in

construction, remodeling or renovation if

the collapse occurs during the course of

the construction, remodeling or renova-

tion.

c. Loss to an awning, fence, patio, deck,

pavement, swimming pool, underground

pipe, flue, drain, cesspool, septic tank,

foundation, retaining wall, bulkhead, pier,

wharf or dock is not included under b.(2)

through (6) above unless the loss is a direct

result of the collapse of a building or any

part of a building.

d. This coverage does not increase the limit of

liability that applies to the damaged covered

property.

8. Glass Or Safety Glazing Material

a. We cover:

(1) The breakage of glass or safety glazing

material which is part of a covered build-

ing, storm door or storm window;

(2) The breakage of glass or safety glazing

material which is part of a covered build-

ing, storm door or storm window when

caused directly by earth movement; and

(3) The direct physical loss to covered

property caused solely by the pieces,

fragments or splinters of broken glass or

safety glazing material which is part of a

building, storm door or storm window.

b. This coverage does not include loss:

(1) To covered property which results be-

cause the glass or safety glazing mate-

rial has been broken, except as pro-

vided in a.(3) above; or

(2) On the “Described Location” if the dwell-

ing has been vacant for more than 60

consecutive days immediately before

the loss, except when the breakage re-

sults directly from earth movement as

provided for in a.(2) above. A dwelling

being constructed is not considered va-

cant.

c. This coverage does not increase the limit of

liability that applies to the damaged prop-

erty.

9. Ordinance Or Law

a. The Ordinance Or Law limit of liability de-

termined in b. or c.

below will apply with re-

spect to the increased costs you incur due

to the enforcement of any ordinance or law

which requires or regulates:

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(1) The construction, demolition, remodel-

ing, renovation or repair of that part of a

covered building or other structure dam-

aged 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 demol-

ished because of damage by a Peril In-

sured Against to another part of that

covered building or other structure; or

(3) The remodeling, removal or replace-

ment of the portion of the undamaged

part of a covered building or other struc-

ture necessary to complete the remodel-

ing, 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 Loca-

tion”, and that location:

(1) Is insured for Coverage A, you may use

up to 10% of the limit of liability that ap-

plies to Coverage A 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 “De-

scribed Location”.

c. 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 prop-

erty as stated in a. above.

d. We do not cover:

(1) The loss in value to any covered build-

ing or other structure due to the re-

quirements 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, con-

tain, treat, detoxify or neutralize, or in

any way respond to, or assess the ef-

fects of, pollutants in or on any covered

building or other structure.

Pollutants means any solid, liquid, gase-

ous or thermal irritant or contaminant,

including smoke, vapor, soot, fumes, ac-

ids, alkalis, chemicals and waste. Waste

includes materials to be recycled, re-

conditioned or reclaimed.

This coverage is additional insurance.

PERILS INSURED AGAINST

A. Coverage A – Dwelling And Coverage B –

Other Structures

1. We insure against risk of direct physical loss to

property described in Coverages A and B.

2. We do not insure, however, for loss:

a. Excluded under General Exclusions;

b. Involving collapse, except as provided in

Other Coverage 7. Collapse; or

c. Caused by:

(1) Freezing of a plumbing, heating, air

conditioning or automatic fire protective

sprinkler system or of a household ap-

pliance, or by discharge, leakage or

overflow from within the system or ap-

pliance caused by freezing. This provi-

sion does not apply if you have used

reasonable care to:

(a) Maintain heat in the building; or

(b) Shut off the “water” supply and drain

all systems and appliances of “wa-

ter”;

However, if the building is protected by

an automatic fire protective sprinkler

system, you must use reasonable care

to continue the “water” supply and main-

tain heat in the building for coverage to

apply.

For purposes of this provision a plumb-

ing system or household appliance does

not include a sump, sump pump or re-

lated equipment or a roof drain, gutter,

downspout or similar fixtures or equip-

ment.

(2) Freezing, thawing, pressure or weight of

“water” or ice, whether driven by wind or

not, to a:

(a) Fence, pavement, patio or swimming

pool;

(b) Footing, foundation, bulkhead, wall,

or any other structure or device, that

supports all or part of a building or

other structure;

(c)

Retaining wall or bulkhead that does

not support all or part of a building or

other structure; or

(d) Pier, wharf or dock;

(3) Theft of property not part of a covered

building or structure;

(4) Theft in or to a dwelling or structure

under construction;

(5) Wind, hail, ice, snow or sleet to:

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(a) Outdoor radio and television anten-

nas and aerials including their lead-

in wiring, masts or towers; or

(b) Trees, shrubs, plants or lawns;

(6) Vandalism and malicious mischief, theft

or attempted theft, and any ensuing loss

caused by any intentional and wrongful

act committed in the course of the van-

dalism or malicious mischief, theft or at-

tempted theft, if the dwelling has been

vacant for more than 60 consecutive

days immediately before the loss. A

dwelling being constructed is not con-

sidered vacant;

(7) Constant or repeated seepage or leak-

age of “water” or steam over a period of

weeks, months or years from within a

plumbing, heating, air conditioning or

automatic fire protective sprinkler sys-

tem or from within a household appli-

ance.

For purposes of this provision, a plumb-

ing system or household appliance does

not include a sump, sump pump or re-

lated equipment or a roof drain, gutter,

downspout or similar fixtures or equip-

ment;

(8) Any of the following:

(a) Wear and tear, marring, deteriora-

tion;

(b) Mechanical breakdown, latent de-

fect, inherent vice, or any quality in

property that causes it to damage or

destroy itself;

wet or dry rot;

(d) Smoke from agricultural smudging or

industrial operations;

(e) Discharge, dispersal, seepage, mi-

gration release or escape of pollut-

ants unless the discharge, dispersal,

seepage, migration, release or es-

cape is itself caused by a Peril In-

sured Against named under Cover-

age C.

Pollutants means any solid, liquid,

gaseous or thermal irritant or con-

taminant, including smoke, vapor,

soot, fumes, acids, alkalis, chemicals

and waste. Waste includes materials

to be recycled, reconditioned or re-

claimed;

(f) Settling, shrinking, bulging or expan-

sion, including resultant cracking, of

bulkheads, pavements, patios, foot-

ings, foundations, walls, floors, roofs

or ceilings; or

(g) Birds, vermin, rodents, insects or

domestic animals.

Exception To c.(8)

Unless the loss is otherwise excluded, we

cover loss to property covered under Coverage

A or B resulting from an accidental discharge

or overflow of “water” or steam from within a:

(i) Storm drain, or “water”, steam or sewer

pipe, off the “Described Location”; or

(ii) Plumbing, heating, air conditioning or auto-

matic fire protective sprinkler system or

household appliance on the “Described Lo-

cation”. This includes the cost to tear out

and replace any part of a building, or other

structure, on the “Described Location”, but

only when necessary to repair the system

or appliance. However, such tear out and

replacement coverage only applies to other

structures if the “water” or steam causes

actual damage to a building on the “De-

scribed Location”.

We do not cover loss to the system or appli-

ance from which this “water” or steam es-

caped.

For the purposes of this provision, a plumbing

system or household appliance does not in-

clude a sump, sump pump or related equip-

ment or roof drain, gutter, down spout or simi-

lar fixtures or equipment.

General Exclusion A.3. “Water” Damage, Para-

graphs a. and c. that apply to surface “water” and

“water” below the surface of ground do not apply

to loss by “water” covered under c.(8) above.

Under 2.b. and c. above, any ensuing loss to

property described in Coverages A and B not ex-

cluded or excepted in this policy is covered.

B. Coverage C – Personal Property

We insure for direct physical loss to the property

described in Coverage C caused by a peril listed

below unless the loss is excluded in the General

Exclusions.

1. Fire Or Lightning

2. Windstorm Or Hail

This peril does not include loss to:

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a. 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 en-

ters through this opening;

b. Canoes and rowboats; or

c. Trees, shrubs or plants.

3. Explosion

4. Riot Or Civil Commotion

5. Aircraft

This peril includes self-propelled missiles and

spacecraft.

6. Vehicles, meaning impact from a vehicle, but

not including damage to the vehicle itself.

7. Smoke

This peril means sudden and accidental dam-

age from smoke, including the emission or

puffback of smoke, soot, fumes or vapors from

a boiler, furnace or related equipment.

This peril does not include loss caused by

smoke from agricultural smudging or industrial

operations.

8. Vandalism Or Malicious Mischief

This peril does not include loss by pilferage,

theft, burglary or larceny.

9. Damage By Burglars

a. This peril means damage to covered prop-

erty caused by burglars.

b. This peril does not include:

(1) Theft of property; or

(2) Damage caused by burglars to property

on the “Described Location” if the dwell-

ing has been vacant for more than 60

consecutive days immediately before

the damage occurs. A dwelling being

constructed is not considered vacant.

10. Falling Objects

This peril does not include loss to property

contained in the building unless the roof or an

outside wall of the building is first damaged by

a falling object. Damage to the falling object it-

self is not covered.

11. Weight Of Ice, Snow Or Sleet

This peril means weight of ice, snow or sleet

which causes damage to property contained in

the building.

12. Accidental Discharge Or Overflow Of

“Water” Or Steam

a. This peril means accidental discharge or

overflow of “water” or steam from within a

plumbing, heating, air conditioning or auto-

matic fire protective sprinkler system or

from within a household appliance.

b. This peril does not include loss:

(1) To the system or appliance from which

the “water” or steam escaped;

(2) Caused by or resulting from freezing

except as provided in Peril Insured

Against 14. Freezing; or

(3) On the “Described Location” caused by

accidental discharge or overflow which

occurs off the “Described Location”.

(4) Caused by or consisting of mold, “fungi”

or wet rot unless hidden within the walls

or ceilings or beneath the floors or

above the ceilings of a structure.

c. In this peril, a plumbing system or house-

hold appliance does not include a sump,

sump pump or related equipment; or a roof

drain, gutter, downspout or similar fixtures

or equipment.

d. General Exclusion A.3. “Water” Damage,

Paragraphs a. and c. that apply to surface

“water” and “water” below the surface of the

ground do not apply to loss by “water” cov-

ered under this peril.

13. Sudden And Accidental Tearing Apart,

Cracking, Burning Or Bulging

This peril means sudden and accidental tear-

ing apart, cracking, burning or bulging of a

steam or hot “water” heating system, an air

conditioning or automatic fire protective sprin-

kler system, or an appliance for heating “wa-

ter”.

We do not cover loss caused by or resulting

from freezing except as provided in the peril of

freezing below.

14. Freezing

a. This peril means freezing of a plumbing,

heating, air conditioning or automatic fire

protective sprinkler system or of a house-

hold appliance but only if you have used

reasonable care to:

(1) Maintain heat in the building; or

(2) Shut off the “water” supply and drain all

systems and appliances of “water”.

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However, if the building is protected by an

automatic fire protective sprinkler system,

you must use reasonable care to continue

the “water” supply and maintain heat in the

building for coverage to apply.

b. In this peril, a plumbing system or house-

hold appliance does not include a sump,

sump pump or related equipment; or a roof

drain, gutter, downspout or similar fixtures

or equipment.

15. Sudden And Accidental Damage From

Artificially Generated Electrical Current

This peril does not include loss to tubes, tran-

sistors, electronic components or circuitry that

are a part of appliances, fixtures, computers,

home entertainment units or other types of

electronic apparatus.

16. Volcanic Eruption

This peril does not include loss caused by

earthquake, land shock waves or tremors.

GENERAL EXCLUSIONS

A. We do not insure for loss caused directly or indi-

rectly by any of the following. Such loss is ex-

cluded regardless of any other cause or event

contributing concurrently or in any sequence to the

loss. These exclusions apply whether or not the

loss event results in widespread damage or af-

fects a substantial area.

1. Ordinance Or Law

Ordinance Or Law means any ordinance or

law:

a. Requiring or regulating the construction,

demolition, remodeling, renovation or repair

of property, including removal of any result-

ing debris. This Exclusion A.1.a. does not

apply to the amount of coverage that may

be provided under Other Coverage 9. Or-

dinance Or Law;

b. The requirements of which result in a loss

in value to property; or

c. Requiring you or others to test for, monitor,

clean up, remove, contain, treat, detoxify or

neutralize, or in any way respond to, or as-

sess the effects of, pollutants.

Pollutants means any solid, liquid, gaseous

or thermal irritant or contaminant, including

smoke, vapor, soot, fumes, acids, alkalis,

chemicals and waste. Waste includes ma-

terials to be recycled, reconditioned or re-

claimed.

This Exclusion A.1. applies whether or not the

property has been physically damaged.

2. Earth Movement

Earth Movement means:

a. Earthquake, including land shock waves or

tremors before, during or after a volcanic

eruption;

b. Landslide, mudslide or mudflow;

c. Subsidence or sinkhole; or

d. Any other earth movement including earth

sinking, rising or shifting; including any

natural or artificially created loss of any kind

attributable in whole or in part to any move-

ment of the earth or soil, whether on or off –

the “Described Location” that is caused by,

resulting from, contributed to or aggravated

by rain or snow, including runoff from same.

caused by or resulting from human or animal

forces or any act of nature unless direct loss by

fire or explosion ensues and then we will pay

only for the ensuing loss.

3. “Water” Damage

“Water” Damage means:

a. Flood, surface “water”, waves, tidal “water”,

overflow of a body of “water” or spray from

any of these, whether or not driven by wind;

b. “Water” or water-borne material which

backs up through sewers or drains or which

overflows or is discharged from a sump,

sump pump or related equipment; or

c. “Water” or water-borne material 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 struc-

ture;

caused by or resulting from human or animal

forces or any act of nature.

Direct loss by fire or explosion resulting from

““water” damage is covered.

4. Power Failure

Power Failure means the failure of power or

other utility service if the failure takes place off

the “Described Location”. But if the failure of

power or other utility service results in a loss,

from a Peril Insured Against on the “Described

Location”, we will pay for the loss caused by

that Peril Insured Against.

5. Neglect

Neglect means your neglect to use all reason-

able means to save and preserve property at

and after the time of a loss.

6. War

War includes the following and any conse-

quence of any of the following:

a. Undeclared war, civil war, insurrection,

rebellion or revolution;

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Page 9 of 13

b. Warlike act by a military force or military

personnel;

c. Destruction or seizure or use for a military

purpose.

Discharge of a nuclear weapon will be deemed

a warlike act even if accidental.

7. Nuclear Hazard

This Exclusion A.7. pertains to Nuclear Hazard

to the extent set forth in the Nuclear Hazard

Clause of the Conditions.

8. Intentional Loss

Intentional Loss 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 cause a

loss.

In the event of such loss, neither you nor any

such person or organization is entitled to cov-

erage, even those who did not commit or con-

spire to commit the act causing the loss.

9. Governmental Action

Governmental Action means the destruction,

confiscation or seizure of property described in

A, B or C by order of any governmental or pub-

lic authority.

This exclusion does not apply to such acts or-

dered by any governmental or public authority

that are taken at the time of a fire to prevent its

spread, if the loss caused by fire would be cov-

ered under this policy.

B. We do not insure for loss to property described in

Coverages A and B caused by any of the follow-

ing. However, any ensuing loss to property de-

scribed in Coverages A and B not precluded by

any other provision in this policy is covered.

1. Weather conditions. However, this exclusion

only applies if weather conditions contribute in

any way with a cause or event excluded in A.

above to produce the loss.

2. Acts or decisions, including the failure to act or

decide, of any person, group, organization or

governmental body.

3. Faulty, inadequate or defective:

a. Planning, zoning, development, surveying,

siting;

b. Design, specifications, workmanship, re-

pair, construction, renovation, remodeling,

grading, compaction;

c. Materials used in repair, construction, reno-

vation or remodeling; or

d. Maintenance;

of part or all of any property whether on or off

the “Described Location”.

Section I

CONDITIONS

A. Policy Period

This policy applies only to loss which occurs dur-

ing the policy period.

B. Insurable Interest And Limit Of Liability

Even if more than one person has an insurable in-

terest in the property covered, we will not be liable

in any one loss:

1. For an amount greater than the interest of a

person insured under this policy at the time of

loss; or

2. For more than the applicable limit of liability.

C. Concealment Or Fraud

We provide coverage to no persons insured under

this policy if, whether before or after a loss, one or

more persons insured under this policy have:

Intentionally concealed or misrepresented any

material fact or circumstance;

2. Engaged in fraudulent conduct; or

3. Made false statements;

relating to this insurance.

D. Duties After Loss

In case of a loss to covered property, we have no

duty to provide coverage under this policy if the

failure to comply with the following duties is preju-

dicial to us. These duties must be performed ei-

ther by you or your representative:

1. Give prompt notice to us or our agent;

2. Protect the property from further damage. In

the event of a “water” loss, you must immedi-

ately take all reasonable and necessary steps

to dry the property and protect the property

from “contamination” of mold or “fungi”. If re-

pairs to the property are required, you must:

a. Make reasonable and necessary repairs to

protect the property; and

b. Keep an accurate record of repair ex-

penses;

3. Cooperate with us in the investigation of a

claim;

4. Prepare an inventory of damaged personal

property showing the quantity, description, ac-

tual cash value and amount of loss. Attach all

bills, receipts and related documents that jus-

tify the figures in the inventory;

5. As often as we reasonably require:

a. Show the damaged property;

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b. Provide us with records and documents we

request and permit us to make copies; and

c. Submit to examination under oath, while not

in the presence of another named insured,

and sign the same;

6. Send to us, within 60 days after our request,

your signed, sworn proof of loss which sets

forth to the best of your knowledge and belief:

a. The time and cause of loss;

b. Your interest and that of all others in the

property involved and all liens on the prop-

erty;

c. Other insurance which may cover the loss;

d. Changes in title or occupancy of the prop-

erty during the term of the policy;

e. Specifications of damaged buildings and

detailed repair estimates;

f. The inventory of damaged personal prop-

erty described in D.4.;

g. Receipts for additional living expenses

incurred and records that support the fair

rental value loss.

E. Loss Settlement

In this Condition E., the terms "cost to repair or re-

place" and "replacement cost" do not include the

increased costs incurred to comply with the en-

forcement of any ordinance or law except to the

extent that coverage for these increased costs is

provided in Other Coverage 9. Ordinance Or Law.

Covered property losses are settled as follows:

1. Property of the following types:

a. Personal property;

b. Awnings, carpeting, household appliances,

outdoor antennas and outdoor equipment,

whether or not attached to buildings; and

c. Structures that are not buildings;

at actual cash value at the time of loss but not

more than the amount required to repair or re-

place.

2. Buildings under Coverage A or B at replace-

ment cost without deduction for depreciation,

subject to the following:

a. If, at the time of loss, the amount of insur-

ance in this policy on the damaged building

is 80% or more of the full replacement cost

of the building immediately before the loss,

we will pay the cost to repair or replace, af-

ter application of any deductible and without

deduction for depreciation, but not more

than the least of the following amounts:

(1) The limit of liability under this policy that

applies to the building;

(2) The replacement cost of that part of the

building damaged with material of like

kind and quality and for like use; or

(3) The necessary amount actually spent to

repair or replace the damaged building.

If the building is rebuilt at a new premises,

the cost described in (2) above is limited to

the cost which would have been incurred if

the building had been built at the original

premises.

b. If, at the time of loss, the amount of insur-

ance in this policy on the damaged building

is less than 80% of the full replacement

cost of the building immediately before the

loss, we will pay the greater of the following

amounts, but not more than the limit of li-

ability under this policy that applies to the

building:

(1) The actual cash value of that part of the

building damaged; or

(2) That proportion of the cost to repair or

replace, after application of deductible

and without deduction for depreciation,

that part of the building damaged, which

the total amount of insurance in this pol-

icy on the damaged building bears to

80% of the replacement cost of the

building.

c. To determine the amount of insurance

required to equal 80% of the full replace-

ment cost of the building immediately be-

fore the loss, do not include the value of:

(1)

Excavations, footings, foundations, piers

or any other structures or devices that

support all or part of the building, which

are below the undersurface of the low-

est basement floor;

(2) Those supports in (1) above which are

below the surface of the ground inside

the foundation walls, if there is no

basement; and

(3) Underground flues, pipes, wiring and

drains.

d. We will pay no more than the actual cash

value of the damage until actual repair or

replacement is complete. Once actual re-

pair or replacement is complete, we will set-

tle the loss as noted in 2.a. and b. above.

However, if the cost to repair or replace the

damage is both:

(1) Less than 5% of the amount of insur-

ance in this policy on the building; and

(2) Less than $2,500;

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we will settle the loss as noted in 2.a. and

b. above whether or not actual repair or re-

placement is complete.

e. You may disregard the replacement cost

loss settlement provisions and make claim

under this policy for loss to buildings on an

actual cash value basis. You may then

make claim for any additional liability ac-

cording to the provisions of this Condition

E. Loss Settlement, provided you notify us

of your intent to do so within 180 days after

the date of loss.

F. Loss To A Pair Or Set

In case of loss to a pair or set we may elect to:

1. Repair or replace any part to restore the pair or

set to its value before the loss; or

2. Pay the difference between actual cash value

of the property before and after the loss.

G. Appraisal

If you and we fail to agree on the amount of loss,

either may demand an appraisal of the loss. In this

event, each party will choose a competent and

impartial appraiser within 20 days after receiving a

written request from the other. The two appraisers

will choose an umpire. If they cannot agree upon

an umpire within 15 days, you or we may request

that the choice be made by a judge of a court of

record in the state where the “Described Location”

is located. The appraisers will separately set the

amount of loss. If the appraisers submit a written

report of an agreement to us, the amount agreed

upon will be the amount of loss. If they fail to

agree, they will submit their differences to the um-

pire. A decision agreed to by any two will set the

amount of loss.

Each party will:

1. Pay its own appraiser; and

2. Bear the other expenses of the appraisal and

umpire equally.

H. Other Insurance And Service Agreement

If property covered by this policy is also covered

by:

1. Other fire insurance, we will pay only the pro-

portion of a 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;

2. A service agreement, this insurance is excess

over any amounts payable under any such

agreement. Service agreement means a ser-

vice plan, property restoration plan, home war-

ranty or other similar service warranty agree-

ment, even if it is characterized as insurance.

I. 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

must sign and deliver all related papers and coop-

erate with us.

J. Suit Against Us

No action can be brought against us unless there

has been full compliance with all of the terms un-

der this policy and the action is started within two

years after the date of loss.

K. Our Option

If we give you written notice within 30 days after

we receive your signed, sworn proof of loss, we

may repair or replace any part of the damaged

property with material or property of like kind and

quality.

L. 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 60 days after we receive your proof of

loss and:

1. Reach an agreement with you;

2. There is an entry of a final judgment; or

3. There is a filing of an appraisal award with us.

M. Abandonment Of Property

We need not accept any property abandoned by

you.

N. Mortgage Clause

1. If a mortgagee is named in this policy, any loss

payable under Coverage A or B will be paid to

the mortgagee and you, as interests appear. If

more than one mortgagee is named, the order

of payment will be the same as the order of

precedence of the mortgages.

2. If we deny your claim, that denial will not apply

to a valid claim of the mortgagee, if the mort-

gagee:

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; and

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DP 00 03 12 02

c. Submits a signed, sworn statement of loss

within 60 days after receiving notice from us

of your failure to do so. Policy conditions re-

lating to Paragraphs G. Appraisal, J. Suit

Against Us and L. Loss Payment also apply

to the mortgagee.

3. If we decide to cancel or not to renew this

policy, the mortgagee will be notified at least

10 days before the date cancellation or nonre-

newal takes effect.

4. 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 will

receive a full assignment and transfer of the

mortgage and all securities held as collat-

eral to the mortgage debt.

5. Subrogation will not impair the right of the

mortgagee to recover the full amount of the

mortgagee's claim.

O. No Benefit To Bailee

We will not recognize any assignment or grant any

coverage that benefits a person or organization

holding, storing or moving property for a fee re-

gardless of any other provision of this policy.

P. Cancellation

1. You may cancel this policy at any time by re-

turning it to us or by letting us know in writing

of the date cancellation is to take effect.

2. We may cancel this policy only for the reasons

stated below by letting you know in writing of

the date cancellation takes effect. This cancel-

lation notice may be delivered to you, or mailed

to you at your mailing address shown in the

Declarations. Proof of mailing will be sufficient

proof of notice.

a. When you have not paid the premium, we

may cancel at any time by letting you know

at least 10 days before the date cancella-

tion takes effect.

b. 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 letting you

know at least 10 days before the date can-

cellation takes effect.

c. When this policy has been in effect for 60

days or more, or at any time if it is a re-

newal with us, we may cancel:

(1) If there has been a material misrepre-

sentation of fact which if known to us

would have caused us not to issue the

policy; or

(2) If the risk has changed substantially

since the policy was issued.

This can be done by letting you know at

least 30 days before the date cancellation

takes effect.

d. When this policy is written for a period of

more than one year, we may cancel for any

reason at anniversary by letting you know

at least 30 days before the date cancella-

tion takes effect.

3. When this policy is canceled, you may be enti-

tled to a premium refund or owe the company

for unpaid earned premium and/or fees. The

premium refund or balance due, if any, will be

calculated as follows:

(a) If a cancellation is initiated by the com-

pany for underwriting reasons or by you

due to company or agent error, earned

premium shall be computed pro rata:

(b) If cancellation is for any other reason, in-

cluding cancellation for non-payment of

premium, the earned premium shall be

computed pro rata and the company shall

retain a cancellation fee.

4. If the return premium is not refunded with the

notice of cancellation or when this policy is re-

turned to us, we will refund it within a reason-

able time after the date cancellation takes ef-

fect.

Q. Nonrenewal

We may elect not to renew this policy. We may do

so by delivering to you, or mailing to you at your

mailing address shown in the Declarations, written

notice at least 30 days before the expiration date

of this policy. Proof of mailing will be sufficient

proof of notice.

R. Liberalization Clause

If we make a change which broadens coverage

under this edition of our policy without additional

premium charge, that change will automatically

apply to your insurance as of the date we imple-

ment the change in your state, provided that this

implementation date falls within 60 days prior to or

during the policy period stated in the Declarations.

This Liberalization Clause does not apply to

changes implemented with a general program re-

vision that includes both broadenings and restric-

tions in coverage, whether that general program

revision is implemented through introduction of:

1. A subsequent edition of this policy; or

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Page 13 of 13

2. An amendatory endorsement.

S. Waiver Or Change Of Policy Provisions

A waiver or change of a provision of this policy

must be in writing by us to be valid. Our request

for an appraisal or examination will not waive any

of our rights.

T. Assignment

Assignment of this policy will not be valid unless

we give our written consent.

U. Death

If you die, we insure:

1. Your legal representatives but only with re-

spect to the property of the deceased covered

under the policy at the time of death;

2. With respect to your property, the person hav-

ing proper temporary custody of the property

until appointment and qualification of a legal

representative.

V. Nuclear Hazard Clause

1. "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.

2. Loss caused by the nuclear hazard will not be

considered loss caused by fire, explosion, or

smoke, whether these perils are specifically

named in or otherwise included within the Per-

ils Insured Against.

3. This policy does not apply to loss caused di-

rectly or indirectly by nuclear hazard, except

that direct loss by fire resulting from the nu-

clear hazard is covered.

W. 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, the loss

payment will be adjusted based on the amount

you received for the recovered property.

X. Volcanic Eruption Period

One or more volcanic eruptions that occur within a

72-hour period will be considered as one volcanic

eruption.

Y. Loss Payable Clause

If the Declarations show a loss payee for certain

listed insured personal property, that person is

considered an “insured” in this policy with respect

to that property.

If we decide to cancel or not renew this policy, that

loss payee will be notified in writing.

Z. Adjustments to Coverage Limits

The limits of liability for Coverages A, B, C, and D

of this policy, as stated in the Declarations, repre-

sent our maximum limit of liability, except adjust-

ments may be made upon each renewal date of

this policy. The maximum limit of liability for Cov-

erage A may be adjusted upon renewal of this pol-

icy to an amount we estimate to be 100% of the

replacement cost of the dwelling. However, we

will not lower the Coverage A limit without your

consent. The maximum limit of liability for Cover-

ages B, C and D will be adjusted in the same pro-

portion as the adjustment to Coverage A. The ad-

justed limits of liability for Coverages A, B, C and

D will be shown in the Declarations and rounded to

the next highest $100.