COMPREHENSIVE EARTHQUAKE COVERAGE

Transcription

1 COMPREHENSIVE EARTHQUAKE COVERAGE TABLE OF CONTENTS PAGE TOPIC 1 AGREEMENT 1 DEFINITIONS 2 PERIL INSURED AGAINST 2 PROPERTY COVERAGES 2 Coverage A - Dwelling 2 Coverage B - Other Structures 3 Coverage C - Personal Property 4 Coverage D - Loss of Use 5 Coverage E - Additional Coverages 5 Debris Removal 5 Engineering and Demolition Costs 5 Reconstruction and Local Building Code Standards 5 Loss Assessment 5 Glass or Safety Glazing Material 6 DEDUCTIBLE 6 EXCLUSIONS 7 CONDITIONS 13 COVERAGE FOR TOWNHOUSE OWNERS 15 COVERAGE FOR NON OWNER-OCCUPIED RESIDENCE PREMISES MEQ

2 COMPREHENSIVE EARTHQUAKE COVERAGE AGREEMENT We will provide the insurance described in this policy in return for payment of the premium and your compliance with all applicable provisions of this policy. DEFINITIONS Throughout this policy "you" and "your" refer to the "named insured" shown in the declarations and the spouse or any other insured as defined below if a resident of the same household. "We", "us" and "our" refer to the Company providing this policy. In addition, certain words and phrases are defined as follows: 1. Adjusted loss means the total amount of loss that you sustain under Coverages A, B, C, D and E for covered property. Amounts in excess of any special limits of liability will be deducted from the loss before applying the deductible. 2. "Business" includes trade, profession and/or occupation. 3. "Declarations" means the Certificate Declarations Page attached to this document. 4. "Insured" means you and residents of your household who are: a. Your relatives; or b. Other persons under the age of 21 and in your care or in the care of any insured. 5. "Occurrence" means all loss to covered property due to earthquake shocks that occur within a continuous 72 hour period. This includes land shock waves or tremors before, during or after a volcanic eruption. 6. "Pollutants" means any solid, liquid, gaseous or thermal irritant or contaminant, including but not limited to smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes but is not limited to material to be recycled, reconditioned or reclaimed. 7. "Residence premises" means: a. The one to two family dwelling, other structures and the grounds; or b. That part of any other building; where you reside and which is shown as the location of premises insured in the declarations. 8. "Single limit of liability" means the limit of liability shown in the declarations. This limit is the maximum we will pay under all coverages provided to you for a single occurrence, including all expenses, however incurred. 9. Special limit of liability means the maximum we will pay for damage to covered property identified in the special limit of liability category and from a single occurrence, including all expenses, however incurred. All special limits of liability are included in and not in addition to the single limit of liability shown in the declarations. MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 1 of 15

3 PERIL INSURED AGAINST We insure for direct physical loss to covered property described in this policy under Coverages A, B, C, D, and E for the peril of earthquake. PROPERTY COVERAGES The maximum limit of liability for all coverages under this policy is the single limit of liability shown in the declarations. Our liability with respect to all coverages provided will not exceed this amount of insurance for a single occurrence, including all expenses, however incurred. COVERAGE A - Dwelling If a covered occurrence damages your dwelling, we cover: 1. The dwelling on the residence premises shown in the declarations including structures attached to the dwelling, and 2. Materials and supplies while within an enclosed structure on the residence premises used to construct, alter or repair the dwelling or other structures on the residence premises. This coverage does not apply to water, lawns, trees, shrubs, or plants; or to land or the value of land, including land on which the dwelling is located, or the cost to restore, replace, repair or rebuild land. If a covered occurrence causes damage to the dwelling and to the land on the residence premises we do not cover any increased cost to repair or rebuild the dwelling because of damage to the land. Special Limit of Liability All property identified below that is damaged from a covered occurrence is subject to the special limit of liability. The special limit of liability for the category below is the maximum amount allowable for loss from each occurrence for all property in that category. This special limit is included in and does not increase the single limit of liability shown in the declarations. $5,000 for chimneys or fireplaces. COVERAGE B - Other Structures If a covered occurrence damages your other structures on the residence premises set apart from the dwelling by clear space, we cover such other structures. This includes structures connected to the dwelling by only a fence, utility line, or similar connection. This coverage does not apply to water, lawns, trees, shrubs, or plants; or to land or the value of land, including land on which the other structures are located, or the cost to restore, replace, repair or rebuild land. If a covered occurrence causes damage to the other structures and to the land on the residence premises we do not cover any increased cost to repair or rebuild the other structures because of damage to the land. 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. MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 2 of 15

4 Special Limits of Liability All property identified below that is damaged from a covered occurrence is subject to the special limit of liability. The special limit of liability for each numbered category below is the maximum amount allowable for loss from each occurrence for all property in that numbered category. These special limits are included in and do not increase the single limit of liability shown in the declarations. 1. $3,000 for swimming pools, spas, whirlpool baths and hot tubs, including all concrete or tile decking and all related equipment; 2. $3,000 for fences of all kinds and types of construction; 3. $3,000 for retaining walls that are not part of the dwelling or other structural foundation; and/or 4. $3,000 for those portions of walks, driveways, patios, stairs, porches and other paved surfaces that are outside the foundation walls of the insured dwelling. Other Structures Not Covered We do not cover: 1. Bulkheads, wharves, piers, bridges, docks, or other open structures located on or partially over water, or property thereon; or, 2. Underground structures or equipment outside the foundation walls of the insured dwelling. COVERAGE C - Personal Property If a covered occurrence damages personal property, owned or used by an insured while within an enclosed structure on the residence premises, we cover that personal property. Additionally, at your request, we will cover personal property owned by others while within an enclosed structure on the residence premises occupied by an insured that is damaged by a covered occurrence. Special Limit of Liability All property identified below that is damaged from a covered occurrence is subject to the special limit of liability. The special limit of liability for the category below is the maximum amount allowable for loss from each occurrence for all property in that category. This special limit is included in and does not increase the single limit of liability shown in the declarations. $3,000 on paintings, etchings, pictures, tapestries, art glass windows not considered part of the structure, statuary, marbles, bronzes, antique furniture, valuable rugs, rare books, antique silver, rare glass or bric-a-brac and other similar articles of bona fide rarity, historic value or artistic merit. Property Not Covered We do not cover: 1. Articles separately described and specifically insured in this or other insurance. 2. Animals, birds or fish. 3. Motor vehicles or all other motorized land conveyances. This includes: a. Their equipment and accessories; or b. Any device or instrument for the transmitting, recording, receiving or reproduction of sound or pictures which is operated solely by use of the power from the electrical system of motor vehicles or all other motorized land conveyances, including: (1) Accessories or antennas; or (2) Tapes, wires, records, disks or other media for use with any electronic apparatus; MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 3 of 15

5 while in or upon the vehicle or conveyance; and c. Disassembled parts of motor vehicles or conveyances while located on the residence premises or elsewhere. We do cover vehicles or conveyances not subject to motor vehicle registration which are: a. Used to service an insured's residence; or b. Designed for assisting the handicapped. 4. Watercraft, including their furnishings, equipment and outboard motors. 5. Trailers of any kind. 6. Aircraft and parts. Aircraft means any contrivance used or designed for flight, except model or hobby aircraft not used or designed to carry people or cargo. 7. Property of roomers, boarders and other tenants, except property of roomers and boarders related to an insured. 8. a. Books of account, drawings, or other paper records; or b. Currency, money or bullion; or c. Collections of numismatic or philatelic property including albums, containers and display cabinets in use with such collections. 9. Any property used in business, including and not limited to business merchandise in storage or held as a sample or for sale or delivery after sale. COVERAGE D - Loss of Use 1. Additional Living Expense If a covered occurrence makes that part of the residence premises where you reside not fit to live in, we cover any reasonable and necessary increase in living expenses incurred by you so that your household can maintain its normal standard of living. Payment will be made for the shortest time required to repair or replace the damage or, if you permanently relocate, the shortest time required for your household to settle elsewhere, but in no event for more than 12 months. 2. Fair Rental Value If a covered occurrence makes that part of the residence premises rented to others or held for rental by you not fit to live in, we cover the fair rental value of such premises less any expenses that do not continue while the premises is not fit to live in. Payment will be made for the shortest time required to repair or replace that part of the premises rented or held for rental, but in no event for more than 12 months. 3. Civil Authority Prohibits Use If a civil authority prohibits you from use of the residence premises as a result of direct damage to neighboring premises caused by a covered occurrence, we cover the loss of use as provided in 1. Additional Living Expense or 2. Fair Rental Value above, but for a period of time no longer than 2 weeks. The periods of time under 1., 2. or 3. above are not limited by expiration of this policy. We do not cover loss or expense due to cancellation of a lease or agreement. MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 4 of 15

6 The Loss of Use expense is included in the single limit of liability shown in the declarations. If the amount to be paid for the actual damages to the dwelling covered under Coverage A plus the loss of use expense is more than the single limit of liability, an additional $1,500 is available for loss of use expense. COVERAGE E - Additional Coverages The additional coverages listed below are extensions of coverage subject to the single limit of liability. 1. Debris Removal. We will pay the expense for the removal of debris of covered property if a covered occurrence causes damage to covered property. This additional coverage does not apply to costs to: a. Extract pollutants from land or water; or b. Remove, restore or replace polluted land or water. Special Limit of Liability - Payment under this coverage for Debris Removal is limited to 5% of the single limit of liability as shown in the declarations. This special limit is included in and does not increase the single limit of liability shown in the declarations. 2. Engineering and Demolition Costs. We will pay the structural engineering costs, except as provided by public entities, that you reasonably incur to determine the habitability of the dwelling on the residence premises or the actual costs of demolition you incur due to structural condemnation as a result of a covered occurrence that causes damage to covered property. Special Limit of Liability - Payment under this coverage for Engineering and Demolition Costs is limited to 5% of the single limit of liability as shown in the declarations. This special limit is included in and does not increase the single limit of liability shown in the declarations. 3. Reconstruction and Local Building Code Standards. We will pay the reconstruction costs you incur to bring the dwelling on the residence premises up to local residential building code standards as required by your local government as part of the reconstruction permit process after an earthquake. Special Limit of Liability - Payment under this coverage for Reconstruction and Local Building Code Standards is limited to $10,000. This special limit is included in and does not increase the single limit of liability shown in the declarations. 4. Loss Assessment. We will pay your share of any loss assessment charged against you by a corporation or association of property owners when the assessment is made as a result of direct loss to dwelling buildings, owned by all members collectively, because of a covered occurrence during the policy period. This additional coverage applies only to loss assessments charged against you as owner of the residence premises. We do not cover loss assessments charged against you or a corporation or association of property owners by any governmental body. Special Limit of Liability - Payment under this coverage for Loss Assessment is limited to 20% of the single limit of liability as shown in the declarations. This special limit is included in and does not increase the single limit of liability shown in the declarations. 5. Glass or Safety Glazing Material. a. If caused by a covered occurrence, we cover: (1) The breakage of Glass or Safety Glazing Material which is part of a covered building, storm door or storm window; and/or, MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 5 of 15

7 (2) 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 covered building, storm door or storm window. b. This coverage does not include loss to covered property which results because the Glass or Safety Glazing Material has been broken, except as provided in a.(2) above. This coverage for Glass or Safety Glazing Material is included in and does not increase any special limits of liability that may apply to the damaged property and is included in and does not increase the single limit of liability shown in the declarations. DEDUCTIBLE When a covered occurrence causes damage to property covered under this policy, we cover only that part of the adjusted loss in excess of the deductible amount specified in the declarations. The deductible specified in the declarations will be applied to each occurrence. If this policy applies as excess insurance (see Condition 7.), the deductible amount specified in the declarations will be reduced by the sum of the amount you paid as the deductible applicable to any other insurance, plus the amount of the loss paid to you by the other insurer. EXCLUSIONS We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of the peril of earthquake contributing concurrently or in sequence to the loss; and/or, whether caused by, resulting from, contributed to or aggravated by the peril of earthquake. 1. Fire. 2. Ordinance or Law, meaning any ordinance or law except as otherwise covered under Additional Coverages, Reconstruction and Local Building Code Standards: a. Requiring or regulating the construction, demolition, remodeling, renovation or repair of property, including removal of any resulting debris; b. The requirements of which result in a loss in value to property; or c. Requiring any insured or others to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of, pollutants. This exclusion applies whether or not covered property has been physically damaged. This exclusion does not apply to the amount of coverage that may be provided for Glass or Safety Glazing Material under Coverage E Additional Coverages. 3. Other Earth Movement, meaning volcanic eruption, landslide, mine subsidence, mudflow, sinkhole, or earth sinking, rising or shifting. 4. Water Damage, meaning flood of any nature or tidal wave, tidal water, tsunami, waves, surface water, overflow of a body of water or spray from any of these. 5. Explosion. 6. Neglect, meaning neglect of the insured to use all reasonable means to save and preserve property at and after the time of a loss. MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 6 of 15

8 7. War, including the following and any consequence of any of the following: undeclared war, civil war, insurrection, rebellion or revolution; warlike act by a military force or military personnel; or destruction, seizure or use for a military purpose. Discharge of a nuclear weapon will be deemed a warlike act even if accidental. 8. 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. Loss caused by the nuclear hazard will not be considered loss caused by earthquake. 9. Planning, Construction or Maintenance, meaning faulty, inadequate or defective: a. Planning, zoning, development, surveying, siting; b. Design, specifications, workmanship, repair, construction, renovation, retrofitting, remodeling, grading, compaction; c. Materials used in repair, construction, renovation, retrofitting or remodeling; or d. Maintenance; of part or all of any property (including land, structures or any improvements) whether on or off the residence premises. 10. Acts or decisions, including the failure to act or decide, of any person, group, organization or governmental body. 11. Pollution, meaning the discharge, dispersal, seepage, migration, release or escape of pollutants, including and not limited to all loss, damage, costs or expenses arising out of or caused by pollution and all costs or expenses incurred to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize pollutants. CONDITIONS 1. Maintaining Policy Limits. The minimum single limit of liability required is based on the estimated full replacement cost of the dwelling at the time of the loss. Annually this single limit of liability will be reviewed by you and, when necessary, adjusted to reflect the current estimated replacement cost for dwellings in your area. If the single limit of liability is less than the actual full replacement cost of the dwelling, you must notify us and request an increase in the single limit of liability. It is your responsibility to maintain an adequate single limit of liability above the estimated full replacement cost of the dwelling for other coverages provided by this policy. You may request adjustment of the amount of insurance at any time. Any premium change will be calculated in proportion to the time remaining in the policy period. 2. Insurable Interest and Limit of Liability. Even if more than one person has an insurable interest in the property covered, we will not be liable in any one loss: a. To the insured for more than the amount of the insured's interest at the time of loss; or b. For more than the applicable limit of liability. 3. Your Duties After Loss. In case of a loss to covered property caused by an occurrence, you must see that the following are done: a. Give prompt notice to us, our agent, or your broker; b. Protect the property from further damage. If repairs to the property are required, you must (1) make reasonable and necessary repairs to protect the property; and (2) keep an accurate record of repair expenses; MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 7 of 15

9 c. Prepare an inventory of damaged personal property showing the quantity, description, actual cash value and amount of loss. Attach all bills, receipts and related documents that justify the figures in the inventory; d. As often as we reasonably require: (1) Show the damaged property; (2) Provide us with records and documents we request and permit us to make copies; and (3) Submit to examination under oath, while not in the presence of any other insured, and sign the same; e. 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: (1) The time and cause of loss; (2) The interest of the insured and all others in the property involved and all liens on the property; (3) Other insurance which may cover the loss; (4) Changes in title or occupancy of the property during the term of the policy; (5) Specifications of damaged buildings and detailed repair estimates; (6) The inventory of damaged personal property described in 3.c. above; and (7) Receipts for additional living expenses incurred and records that support the fair rental value loss. 4. Loss Settlement. Covered property losses are settled at replacement cost without deduction for depreciation, subject to the following: a. We will pay the cost to repair or replace the damaged covered property, after the application of the deductible, but not more than the lowest of the following amounts: (1) The single limit of liability under this policy; (2) Any applicable special limit of liability stated in this policy; (3) The replacement cost of that part of the damaged building for construction of like kind and quality and use on the same premises; or (4) The necessary amount actually spent to repair or replace the damaged building. b. We will pay no more than the actual cash value of the damage unless: (1) Actual repair or replacement is complete; or (2) The cost to repair or replace the damage is both: (i) Less than 5% of the single limit of liability; and (ii) Less than $1,000. c. Property listed below is not eligible for replacement cost settlement. Any loss will be settled at the lesser of either the actual cash value at the time of loss or the amount required to repair or replace. (1) Antiques, fine arts, paintings and similar articles of rarity or antiquity which cannot be replaced. MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 8 of 15

10 (2) Memorabilia, souvenirs, collectors items and similar articles whose age or history contribute to their value. (3) Articles not maintained in good or workable condition. (4) Articles that are outdated or obsolete and are stored or not being used. d. You may initially choose to make claim under this policy for loss or damage on an actual cash value basis rather than pursuant to the replacement cost loss settlement provisions. You may later make claim for any additional amounts that may be owed on a replacement cost basis provided you notify us of your intent to do so within 180 days after the date of loss. 5. Loss to a Pair or Set. In case of a loss to a pair or set we may elect to: a. Repair or replace any part to restore the pair or set to its value before the loss; or b. Pay the difference between actual cash value of the property before and after the loss. 6. Appraisal. If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. In that event, each party will choose a competent and impartial appraiser within 20 days after receiving a written request from the other. The appraisers will separately set the amount of loss. If the appraisers submit a written report of agreement to us, the amount agreed upon will be the amount of the loss. If they fail to agree, 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 residence premises is located. Upon the selection of an umpire, the appraisers will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss. Each party will: a. Pay its own appraiser; and b. Bear the other expenses of the appraisal and umpire equally. 7. Other Insurance. If a loss covered by this policy is also covered by other insurance, we will only pay excess over any other valid and collectible insurance available to any insured. This is true whether such other insurance is stated to be primary, contributory, excess, contingent or otherwise unless such other insurance is written only as specific excess insurance over the single limit of liability provided in this policy. 8. Suit Against Us. No action can be brought against us unless the policy provisions have been complied with and the action is brought within two years after the date of loss. 9. 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 property of like kind and quality. 10. 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: a. We reach agreement with you; b. There is an entry of a final judgment; or c. There is a filing of an appraisal award with us. 11. Abandonment of Property. We need not accept or cover damage to any property abandoned by an insured. MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 9 of 15

11 12. Mortgage Clause. The word "mortgagee" includes trustee. a. 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. b. If we deny your claim, that denial will not apply to a valid claim of the mortgagee, if the mortgagee: (1) Notifies us of any change in ownership, occupancy or substantial change in risk of which the mortgagee is aware; (2) Pays any premium due under this policy on demand if you have neglected to pay the premium; and (3) Submits a signed, sworn statement of loss within 60 days after receiving notice from us of your failure to do so. Policy conditions relating to Appraisal, Suit Against Us and Loss Payment apply to the mortgagee. c. If we decide to cancel or not to renew this policy, the mortgagee will be notified at least 10 days before the date of cancellation or nonrenewal takes effect. d. If we pay the mortgagee for any loss and deny payment to you: (1) We are subrogated to all rights of the mortgagee granted under the mortgage on the property; or (2) At our option, we may pay 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 collateral to the mortgage debt. e. Subrogation will not impair the rights of the mortgagee to recover the full amount of the mortgagee's claim. 13. 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 regardless of any other provision of this policy. 14. Term of Coverage and Changes. a. The effective time of this policy is 12:01 A.M. Standard Time at the residence premises. This policy applies only to occurrences which occur during the term of coverage. This policy may be renewed for a successive term of coverage if the required premium is paid and accepted by us on or before the expiration of the current term of coverage. The premium will be computed at our then current rate for coverage then offered. b. Changes. (1) Before the end of the current term of coverage, we may offer to change the coverage provided in this policy. Payment of the premium billed by us for the next term of coverage will be your acceptance of our offer. (2) This policy contains all agreements between you and us. Its terms may not be changed or waived except by endorsement issued by us. If a change requires a premium adjustment, we will adjust the premium as of the effective date of change. Additional or return premiums of $5.00 or less will be waived. 15. Concealment or Fraud. We provide no coverage for loss if, whether before or after a loss, any insured, or anyone on the insured s behalf, has: a. Intentionally concealed or misrepresented any material fact or circumstance; or MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 10 of 15

12 b. Engaged in fraudulent conduct; or c. Made false statements; relating to this insurance or any claim submitted for insurance under the policy. 16. Liberalization Clause. If we adopt a revision which would broaden the coverage under this policy without additional premium within 60 days prior to or during the policy period, the broadened coverage will immediately apply to this policy. 17. 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 information will not waive any of our rights. 18. Cancellation. a. You may cancel this policy at any time by returning it to us or by letting us know in writing of the date cancellation is to take effect. b. We may cancel this policy only for the reasons stated below by letting you know in writing of the date cancellation takes effect. The cancellation 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. (1) When you have not paid the premium, we may cancel at any time by letting you know at least 10 days before the date cancellation takes effect. (2) When this policy has been in effect for less than 60 days and is not a renewal with us, we may cancel for any reason by letting you know at least 10 days before the date cancellation takes effect. (3) When this policy has been in effect for 60 days or more, or at any time if it is a renewal with us, we may cancel if: (a) There has been conviction of a crime having as one of its necessary elements an act increasing the hazard insured against; or (b) There has been discovery of fraud or material misrepresentation of fact which if known to us would have caused us not to issue the policy; or (c) There has been discovery of grossly negligent acts or omissions substantially increasing any of the hazards insured against; or (d) There have been physical changes in the property insured against which result in the property becoming uninsurable. (e) The risk has changed substantially since the policy was issued. This can be done by notifying you at least 30 days before the date cancellation takes effect. (4) When this policy is written for a period longer than one year, we may cancel for any reason at anniversary by notifying you at least 30 days before the date cancellation takes effect. c. When this policy is canceled, the premium for the period from the date of cancellation to the expiration date will be refunded pro rata. d. If, when we cancel this policy, the return premium is not refunded with the notice of cancellation, we will refund it within 30 days after the date cancellation takes effect. If, when you cancel this policy, the return premium is not refunded when this policy is returned to us, we will refund it within a reasonable time after the date cancellation takes effect. MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 11 of 15

13 19. Non-Renewal. a. We may elect not to renew this policy, subject to the provision of b. below. We may do so by delivering 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. b. If this policy is written for a period of less than one year, we agree not to refuse to renew except at the end of an annual period commencing with the original or renewal effective date. 20. Automatic Termination. If we offer to renew or continue and you or your representative do not accept, this policy will automatically terminate at the end of the current policy period. Failure to pay the required renewal or continuation premium when due shall mean that you have not accepted our offer. 21. Assignment. Assignment of this policy will not be valid unless we give our written consent. 22. Subrogation. An insured 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 insured must sign and deliver all related papers and cooperate with us. 23. Death. If any person named in the declarations or the spouse if a resident of the same household, dies: a. We insure the legal representative of the deceased but only with respect to the premises and property of the deceased covered under the policy at the time of death; b. Insured includes: (1) Any member of your household who is an insured at the time of your death, but only while a resident of the residence premises; and (2) With respect to your property, the person having proper temporary custody of the property until appointment and qualification of a legal representative. 24. Inspections and Surveys. We have the right but are not obligated to: a. Make inspections and surveys at any time; b. Give you reports on the conditions we find; and c. Recommend changes. Any inspections, surveys, reports or recommendations relate only to insurability and the premiums to be charged. We do not undertake to perform the duty of any person or organization to provide for the health or safety of workers or the public. We do not make safety inspections. And we do not warrant that conditions: a. Are safe or healthful; or b. Comply with laws, regulations, codes or standards. This condition applies not only to us, but also to any rating, advisory, rate service or similar organization which makes insurance inspections, surveys, reports or recommendations. MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 12 of 15

14 If this policy covers a townhouse, the following changes will apply. COVERAGE CHANGES Throughout this policy, wherever "dwelling" is used, it is replaced by "unit". Under DEFINITIONS, "residence premises" is deleted and replaced by the following: 7. "Residence premises" means the unit where you reside shown as the "residence premises" in the declarations. Under PROPERTY COVERAGES, COVERAGE A - Dwelling is deleted and replaced by the following: COVERAGE A - Dwelling We cover: 1. The alterations, appliances, fixtures and improvements which are part of the building contained within the residence premises; 2. Items of real property which pertain exclusively to the residence premises and for which you have a contractual responsibility to insure; 3. Property which is your insurance responsibility under a corporation or association of property owners agreement; or 4. Structures owned solely by you, other than the residence premises, at the location of the residence premises. This coverage does not apply to water, lawns, trees, shrubs or plants; or to land or the value of land, including land on which the residence premises, real property or structures are located, or the cost to restore, replace, repair or rebuild land. If a covered occurrence causes damage to the residence premises, real property or structures and to the land on the residence premises we do not cover any increased cost to repair or rebuild the residence premises, real property or structures because of damage to the land. Special Limits of Liability - All property identified below that is damaged from a covered occurrence is subject to the special limit of liability. The special limit of liability for each numbered category below is the maximum amount allowable for each covered occurrence for all property in that numbered category. These special limits are included in and do not increase the single limit of liability shown in the declarations. 1. $5,000 for chimneys or fireplaces. 2. $3,000 for swimming pools, spas, whirlpool baths and hot tubs, including all concrete or tile decking and all related equipment. 3. $3,000 for fences of all kinds and types of construction. 4. $3,000 for retaining walls that are not part of the dwelling or other structure foundation. 5. $3,000 for those portions of walks, driveways, patios, stairs, porches and other paved surfaces which are outside the foundation walls of the insured dwelling. We do not cover: 1. Structures used in whole or in part for business purposes; MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 13 of 15

15 2. Structures rented or held for rental to any person not a tenant of the residence premises, unless used solely as a private garage; 3. Bulkheads, wharves, piers, bridges, docks, or other open structures located on or partially over water, or property thereon; 4. Underground structures or equipment outside the foundation walls of the residence premises. Under CONDITIONS, Paragraph 4. Loss Settlement is deleted and replaced with the following: 4. Loss Settlement. Covered property losses are settled at replacement cost without deduction for depreciation, subject to the following: a. We will pay the cost to repair or replace, after the application of the deductible, but not more than the lowest of the following amounts: (1) The single limit of liability under this policy; (2) Any applicable special limits of liability stated in this policy; (3) The replacement cost of that part of the damaged building for construction of like kind and quality and use on the same premises; or (4) The necessary amount actually spent to repair or replace the damaged building. b. We will pay no more than the actual cash value of the damage unless: (1) Actual repair or replacement is complete; or (2) The cost to repair or replace the damage is both: (i) Less than 5% of the single limit of liability; and (ii) Less than $1,000; and (3) The damage is repaired or replaced within a reasonable time. c. Property listed below is not eligible for replacement cost settlement. Any loss will be settled at actual cash value at the time of loss but not more than the amount required to repair or replace. (1) Antiques, fine arts, paintings and similar articles of rarity or antiquity which cannot be replaced. (2) Memorabilia, souvenirs, collectors items and similar articles whose age or history contribute to their value. (3) Articles not maintained in good or workable condition. (4) Articles that are outdated or obsolete and are stored or not being used. d. You may initially choose to make claim under this policy for loss or damage on an actual cash value basis rather than pursuant to the replacement cost loss settlement provisions. You may later make claim for any additional amounts that may be owed on a replacement cost basis provided you notify us of your intent to do so within 180 days after the date of loss. MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 14 of 15

16 If this policy covers a residence premises where you do not reside, the following changes will apply. COVERAGE CHANGES Under DEFINITIONS, "residence premises" is deleted and replaced by the following: 7. "Residence premises" means the one to two family dwelling, other structures and the grounds; or that part of any other building; which is shown as the location of premises insured in the declarations. MEQ Includes copyrighted material of ISO Properties, Inc., 2000, with its permission. Page 15 of 15