SAMPLE. RVOS Farm Mutual Insurance Company 2301 South 37th Street Temple, Texas

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1 Quick Reference...Page #. PART 1 INSURING AGREEMENT... 3 PART 2 DEFINITIONS... 3 PART 3 PROPERTY COVERAGE Dwelling and Other Structures... 3 Personal Property... 3 Off Premises Coverage... 4 Building Materials... 4 Watercraft... 4 Antenna and Outside Satellite Dishes... 4 Organizational Property, Other Structures, and Personal Property... 4 PART 4 PERILS INSURED AGAINST... 4 PART 5 SPECIAL LIMITS OF LIABILITY... 5 PART 6 PROPERTY NOT COVERED... 5 PART 7 EXTENSIONS OF COVERAGE. Debris Removal... 5 Loss of Use... 5 Reasonable Repairs... 6 Spoiled Food... 6 Automatic Removal... 6 PART 8 LOSSES NOT COVERED... 6 PART 9 DEDUCTIBLE CLAUSE... 7 PART 10 CONDITIONS 1. RVOS Policy Format Policy Period Insurable Interest and Limit of Liability... 8 by RVOS Farm Mutual Insurance Company 2301 South 37th Street Temple, Texas A TEXAS FARM MUTUAL INSURANCE COMPANY ( Quick Reference... Page #. 4. Concealment or Fraud Conditions Suspending or Restricting Insurance Cancellation of Policy Refusal to Renew Other Insurance Loss Settlement Appraisal Duties After A Loss Abandonment of Property Suit Against Us Subrogation Mortgage Clause (without contribution) No Benefit to Bailee Unoccupied Property Loss to a Pair or Set Salvage Rights Loss Payment Catastrophe Claims Change in Use * * * * * * lmportant * * * * * * YOU HAVE CERTAIN DUTIES AFTER A LOSS. PLEASE REFER TO PART 10 (#11) FOR A COMPLETE LIST OF YOUR DUTIES AFTER A LOSS. star policy (REV 5/2012)

2 IMPORTANT NOTICE To obtain information or make a complaint: You may call the company s toll-free telephone number for information or to make a complaint at: You may contact the Texas Department of Insurance to obtain information on companies, coverages, rights or complaints at: You may write the Texas Department of Insurance: P.O. Box Austin, TX Fax: (512) Web: ConsumerProtection@tdi.state.tx.us PREMIUM OR CLAIM DISPUTES: Should you have a dispute concerning your premium or about a claim you should contact the agent or the company first. If the dispute is not resolved, you may contact the Texas Department of Insurance. ATTACH THIS NOTICE TO YOUR POLICY: This notice is for information only and does not become a part or condition of the attached document. AVISO IMPORTANTE Para obtener informacion o para someter una queja: Usted puede llamar al numero de telefono gratis de la compania para informacion o para someter una queja al: Puede comunicarse con el Departamento de Seguros de Texas para obtener informacion acerca de companias, coberturas, derechos o quejas al: Puede escribir al Departamento de Seguros de Texas: P.O. Box Austin, TX Fax: (512) Web: ConsumerProtection@tdi.state.tx.us DISPUTAS SOBRE PRIMAS O RECLAMOS: Si tiene una disputa concerniente a su prima o a un reclamo, debe comunicarse con el agente o la compania primero. Si no se resuelve la disputa, puede entonces comunicarse con el departamento (TDI). UNA ESTE AVISO A SU POLIZA: Este aviso es solo para proposito de informacion y no se convierte en parte o condicion del documento adjunto

3 PART 1 INSURING AGREEMENT We agree to provide the insurance described in this policy in return for the premium payment and for your compliance with all applicable provisions of this policy. You agree to comply with the provisions of the policy and all future amendments and to pay all premiums when they become due. PART 2 In this policy, you and your refer to the member or named insured shown on the declarations page and your spouse if a resident of your household. We, us, our, RVOS, and Association refers to RVOS Farm Mutual Insurance Company, a Texas farm mutual insurance company organized under the provisions of Chapter 911 of the Texas Insurance Code. In addition, certain words and phrases are defined as follows: attached means sharing a common roofline. business means a trade, profession, or occupation. A business includes farming and farm related operations. business days when used in this policy means a day other than a Saturday, Sunday, or holiday recognized by the State of Texas. Business Personal Property means office equipment, office furniture, machinery, equipment, tools, supplies, and other articles you own and are used in a business. dwelling means the dwelling shown on the declarations page. This includes everything that is legally a part of the dwelling, including structures attached to the dwelling. farm or farming refers to the operation of a farm or ranch. guest house refers to a permanent structure adjacent to and on the same premises as the owner occupied main house. PART 3 I Dwelling and Other Structures. (1) Dwelling. We cover the dwelling on the described location used: a. principally for dwelling purposes, including structures attached to the dwelling; or b. as an owner occupied dwelling where the insured resides or intends to reside within 60 days after the effective date of this policy; or c. as a church parsonage. (2) Other Structures. We cover other structures on the described location set apart from the dwelling by clear space and which presently serves or is used in service to the dwelling. 3 You hereby declare that all statements made on the application and any pages attached hereto are true and correct. You agree that the policy will be void if you haveconcealed or misrepresented any fact or circumstance concerning such insurance. DEFINITIONS immediate family refers to your mother, father, son, or daughter. insured means you (the named insured), your spouse, and your immediate family who are residents of the same household. described location means the location shown on the declarations page of the policy. owner occupied property means the primary or secondary place of residence occupied by the insured shown on the declarations page. parsonage refers to a dwelling owned by a church and occupied by the pastor. renter occupied property means property you own that is occupied by a tenant. sales contract refers to an agreement whereby the seller retains the deed to the property and when the terms of the agreement have been satisfied, the deed is transferred to the buyer. scheduled means the item is listed for a specific limit of liability. unoccupied refers to furnished or unfurnished property you own in which no one lives as their primary or secondary residence, and/or other covered property at a location where no one lives as their primary or secondary residence. watercraft refers to all types of boats, personal watercraft, outboard motors, including their trailers, furnishings, and equipment. property coverage The total limit of liability for other structures is the limit of liability shown on the declarations page or 10% of the dwelling limit of liability, whichever is greater. This is additional insurance and does not reduce the dwelling limit of liability. We do not cover other structures that are used for business or commercial manufacturing purposes. II Personal Property. (1) Personal Property. We cover your personal property owned, worn or used by you and your family in the same household. At your request, we will also cover personal property owned by others (except roomers or tenants) while the property is on the premises of the described location occupied exclusively by an insured.

4 (2) Off Premises Coverage. We cover your personal property while temporarily away from the described location anywhere in the world. The limit of liability for this coverage is 10% of the amount of personal property shown on the declarations page or $1,000, whichever is greater. (3) Building Materials. We cover your building materials that are to be made part of the insured dwelling or other structures. (4) Watercraft. We cover watercraft, their trailers and motors owned by you and located on land at the described location that is occupied by the owner as their principal place of residence, subject to the Special Limit of Liability. III Antennas and Outside Satellite Dishes. We cover your TV and radio antennas and outside satellite dishes located on the described location including lead-in wiring for all perils except windstorm, hurricane, or hail. IV Organizational Property, Other Structures, and Personal Property. (1) Organizational Property. We cover the following organizational property located at the described location wherein a minimum of one monthly function is held: a. Halls/Community Centers/Volunteer Fire Departments. PART 4 We insure for accidental direct physical loss caused by a peril listed below to the property described in PART 3 - PROPERTY COVERAGE unless the loss is excluded in PART 8 - Losses NOT Covered. 1. Fire. 2. Lightning. Proof of lightning must be evident on the outside of the building; or, on the interior of the building; or, to the item itself in order to be payable. 3. Windstorm/Hurricane/Hail. 4. Explosion. 5. Smoke. Loss by smoke shall be limited to a loss caused by a sudden, unusual and faulty operation of any heating, disposal, or cooking unit. Damages to insured property resulting from smoke from a fire in any neighboring building will be paid. 6. Riot & Civil Commotion. A loss resulting from this peril shall include direct loss from pillage and looting when such pillage and looting occurred during and at the immediate place of a riot or civil commotion. b. Churches/Schools. (2) Other Structures. We cover other structures on the described location, for the above listed organizational property: a. which were originally constructed to serve these buildings; and b. which presently serve these buildings; and c. which are set apart by clear space. The total limit of liability for other structures on organizational property is the limit of liability shown on the declaration page or $10,000, whichever is greater. This is additional insurance and does not reduce the limit of liability specified on the building. We do not cover other structures that are used for business or commercial manufacturing purposes. (3) Personal Property. We cover personal property owned by the organizations as described in IV (1) Organizational Property. (4) Off Premises Coverage. We cover your personal property while temporarily away from the described location anywhere in the world. The limit of liability for this coverage is 10% of the amount of personal property shown on the declarations page or $1,000, whichever is greater. PERILS INSURED AGAINST 8. Theft, Vandalism and Malicious Mischief. Coverage for this peril includes a loss resulting from theft (any act of stealing), vandalism and the willful and malicious damage to or destruction of insured property. 9. Accidental Water Discharge, Leakage or Overflow of Water or Steam from within a plumbing, heating or air conditioning system, fire protective sprinkler system, or household appliance including backing up of sewer or drains. A loss resulting from this peril includes the cost of tearing out and replacing any part of the dwelling covered to effect repairs to the dwelling that was damaged or personal property therein, and to a guest house. 7. Aircraft and Land Vehicle Damage. A loss resulting from this peril is limited to direct loss by falling aircraft or objects falling therefrom; and, by land vehicle. 10. Weight of ice, snow or sleet. Loss due to collapse from the weight of snow or ice shall apply to the owner occupied dwelling that is the insured s principal place of residence, including garage attached to the dwelling (excluding open carports and patio covers). 11. Accidental Glass Breakage applies to glass constituting a part of the dwelling, which is insured as owner occupied property, and to a guest house, subject to the Special Limit of Liability. 4

5 PART 5 SPECIAL LIMITS OF LIABILITY The special limit for each of the following is the total limit for each loss for all property in that category unless the loss is excluded in PART 8 - losses not covered. These limits do not increase the limits as stated on the declaration page. I Owner Occupied Dwelling. Covered losses by Accidental Glass Breakage are limited to: 1. two percent (2%) of the amount of insurance on the owner occupied dwelling as shown on the declarations page and to a guest house; and 2. damages exceeding $ The deductible does not apply to Accidental Glass Breakage losses. Damage caused by aircraft operated by the insured is limited to falling aircraft. Damage to the insured property caused by a licensed land vehicle operated by the insured PART 6 We do not cover: Animals, birds, fish, reptiles, amphibians, or other like creatures. Property of roomers, boarders, and other tenants. Motor or engine propelled vehicles or machines designed for movement on land, including their parts, accessories, attached machinery and equipment. However, we do cover such vehicles which are not subject to motor vehicle registration and are: a. devices and equipment for assisting the handicapped. b. power mowers. c. golf carts. d. vehicles or machines used for recreational purposes while located on the described location. Aircraft, except model or hobby aircraft not used or designed to carry people or cargo. Trailers, campers, travel trailers, and semi-trailers. However, we do cover boat trailers subject to the limitations on watercraft. Citizen Band radios, radar detectors and similar equipment designed for use in a motor vehicle. PART 7 1. Debris Removal. a. We will pay your reasonable expense for the removal of debris of covered property from the described location if the loss was caused by a peril the damaged property is insured against. b. We will pay up to $500 in the aggregate for each loss to cover the reasonable expenses you incur in the removal of tree debris from the described location. This coverage applies only if the tree fell due to a peril insured against and has damaged covered property. 5 or tenant or by any agent or employee of the insured is limited to five percent (5%) of the amount of insurance on the owner occupied dwelling as shown on the declarations page. II Personal Property. Antiques... $10,000 per occurrence. Business Personal Property... $2,500 per occurrence. Jewelry/Watches/Furs... $700 per occurrence for loss by theft of gems, watches, jewelry or furs. Painting or Art Object... $10,000 per occurrence. Software, Tapes, Records, Disks and Recorded Data... $5,000 per occurrence. Collectibles... $5,000 per occurrence. Watercraft... $1,000 per occurrence. Unattached greenhouses constructed of plastic or glass. Personal property of any kind that is leased by or to an insured or bought under a lease-purchase agreement. A building or its contents, with more than 40% of its floor space or more than 500 square feet of floor space, whichever is the lesser amount, used for business purposes. Business Personal Property that consists of samples or articles for sale or delivery; or if the property is away from the described location. Living plants or growing crops. Accounts, money, bullion, securities, manuscripts, deeds, evidences of debt, and records and books of records (except for their physical value in blank). Water holding tanks on platforms. Mobile home used as an outbuilding. Property owned by cities, counties, state or school districts. Unscheduled feed, seed, and harvested field products used in a farming operation. EXTENSIONS OF COVERAGE This debris removal coverage is not additional insurance, and does not increase the limit of liability that applies to the damaged property. 2. Loss of Use. PROPERTY NOT COVERED If a covered loss renders the described owner occupied dwelling wholly or partially uninhabitable: a. we cover additional living expense, meaning any necessary and reasonable increase in living expense you incur so that your household can maintain its normal standard of living.

6 b. we cover fair rental value, meaning the fair rental value of that part of the described owner occupied dwelling rented to others or held for rental by you, less any expenses that do not continue. We do not cover loss or expenses due to cancellation of a lease or agreement. The total limit of liability for all loss of use is 1% per month of the insured value of the dwelling for a maximum period of 6 months. Payment will be for the reasonable time required to repair or replace the damaged property. If you permanently relocate, payment will be for the reasonable time required for your household to become settled. The periods of time for loss of use are not limited by expiration of this policy. This is not additional insurance and does not increase the limit of liability shown on the declarations page. 3. Reasonable Repairs. If a peril insured against causes the loss, we will pay the reasonable cost you incur for necessary temporary repairs made solely to protect covered property from further damage. This applies only if the loss itself is covered under this policy. This coverage does not increase the limit of liability that applies to the property being repaired. 4. Spoiled Food. We pay for losses to spoiled food up to the amount of $ when the food is spoiled due to a power outage caused by an act of nature and the insured has used reasonable care to keep the food from spoiling. PART 8 1. The following exclusions apply to loss to property described under PART 3 - PROPERTY COVERAGE, but they do not apply to an ensuing loss caused by fire, smoke or explosion. a. We do not cover loss to electrical devices or wiring caused by electricity other than lightning. b. We do not cover loss caused by smog or by smoke from industrial or agricultural operations. c. We do not cover loss caused by windstorm, hurricane or hail to: (1) cloth awnings. (2) radio and television towers, outside satellite dishes, masts and antennas, including lead-in wiring. (3) windchargers and windmills. (4) the interior of a covered building or to personal property contained in a covered building unless direct force of wind or hail makes an opening in a roof or wall and rain enters through this opening and causes the damage. d. We do not cover loss of the following property by theft, including attempted theft and loss of property from a known place when It is likely that the 6 This is not additional insurance and does not increase the limit of liability shown on the declarations page. 5. Automatic Removal. If you move from the described location to another location within the State of Texas, to be occupied as your principal residence: a. we cover the personal property at each location in the proportion that the value at each location bears to the total value of all the personal property covered; and b. we cover personal property in transit up to 10% of the limit of liability. This coverage applies for only 30 days from the date the removal begins, at which time this coverage ceases. 6. Outdoor Trees, Shrubs, Plants and Lawns. We cover outdoor trees, shrubs, plants or lawns, on the described location, for direct loss caused by fire or lightning, explosion, aircraft, vehicles (not owned or operated by a resident of the dwelling), vandalism or malicious mischief, riot and civil commotion, and theft or attempted theft. This coverage does not apply t o outdoor trees, shrubs, plants or lawns grown for business or farming purposes. The maximum limit of liability for this coverage shall not exceed 5% of the dwelling limit of liability. We will not pay more than $250 for any one outdoor tree, shrub or plant. This is not additional insurance and does not increase the dwelling limit of liability. The deductible does not apply to outdoor trees, shrubs, plants and lawns. LOSSES NOT COVERED property has been stolen: (1) personal property while away from the described location at any other residence owned by, rented to or occupied by an insured, except while an insured is temporarily living there. (2) building materials and supplies not on the described location. e. We do not cover loss to machinery, appliances or mechanical devices caused by mechanical breakdown. f. We do not cover loss under PART 3 - PROPERTY COVERAGE - Dwelling, Other Structures, and Organizational Property caused by settling, cracking, bulging, shrinkage, or expansion of foundations, walls, floors, ceilings, roof structures, walks, drives, curbs, fences, retaining walls or swimming pools. This exclusion applies even if such damage was caused by accidental water discharge as defined in PART 4 of this policy. g. We do not cover loss caused by or resulting from flood, surface water, waves, tidal water or tidal waves, overflow of streams or other bodies of water or spray from any of these whether or not driven by wind.

7 h. We do not cover the costs for removal, handling, disposal or hauling of materials that are classified as hazardous to the environment. This includes, but is not limited to, such materials as asbestos, slate or other material that requires special handling and/or additional expense. i. We do not cover loss by accidental water discharge as defined in PART 4 of this policy: PART 9 (1) to the system or appliance from which the water or steam escaped; or (2) caused by or resulting from water or sewage from outside the described location plumbing system that enters through sewers or drains, or water which enters into and overflows from within a sump pump, sump pump well or any other system designed to remove subsurface water which is drained from the foundation area; or (3) caused by or resulting from continuous or repeated seepage or leakage of water or steam which occurs over a period of time and results in deterioration, corrosion, rust, mold, or wet or dry rot; or (4) caused by or resulting from freezing unless you have used reasonable care to maintain heat in the building or shut off the water supply and drain plumbing, heating and air conditioning system of water; or (5) to renter occupied property, or unoccupied property; or (6) to Other structures with an exception to a guest house. j. We do not cover loss to watercraft when the peril insured against occurred away from the described location. k. We do not cover loss by theft, vandalism or malicious mischief damage as defined in PART 4 of this policy: (1) caused by the insured or by any renter or tenant, or by an agent or employee of the insured, renter or tenant. (2) to renter occupied property, or unoccupied property. l. We do not cover loss by theft of personal property from any land vehicle or watercraft away from the described location unless the land vehicle or watercraft is locked or the compartment the property stolen from is locked and there is evidence of forcible entry. agent or employee of an insured except as stated under PART 5 - SPECIAL LIMITS OF LIABILITY. n. We do not cover loss caused by vehicles while insured property is located on any public road or highway. o. We do not cover loss caused by smoke from fireplaces. 2. Governmental Action. We do not cover loss caused by the destruction of property by order of governmental authority. But we do cover loss caused by acts of destruction ordered by governmental authority taken at the time of a fire to prevent its spread, if the fire would be covered under this policy. 3. War Damage. We do not cover loss resulting directly or indirectly from war. This includes; but is not limited to, enemy attack by armed forces, including action taken by military, naval or air forces in resisting an actual or an immediately impending enemy attack; invasion; insurrection; rebellion; revolution; civil war; atomic or hydrogen explosion. 4. Building Laws. We do not cover loss caused by or resulting from the enforcement of any ordinance or law regulating the construction, repair or demolition of a building or structure. 5. Nuclear Hazard. We do not cover loss caused by 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 shall not be considered loss caused by fire, explosion or smoke. However, we do insure for any direct loss by fire resulting from the nuclear hazard, provided the resulting fire loss is itself peril insured against. 6. Neglect of the Insured. We do not cover loss caused by neglect of the insured to use all reasonable means to save and preserve property at and after the time of a loss, or when property is endangered. m. We do not cover aircraft and land vehicle damage caused by the insured or by any tenant, or by an 7. Sonic Boom. This Association shall not be liable for any loss caused by sonic boom or other forces resulting from shock waves created by the movement above the surface of the earth or aircraft, missiles, or other objects whether such sonic boom or other forces are transmitted through the air or the earth or both. DEDUCTIBLE CLAUSE 1. The deductible amount shown on the declarations page will be deducted from each covered loss unless otherwise stated in the policy. 2. One deductible shall apply per covered loss to all insured property maintained at the same legal location as shown on the declaration page. 7

8 PART 10 CONDITIONS 1. RVOS Policy Format. This insurance is written by RVOS Farm Mutual Insurance Company operating under the provisions of Chapter 911 of the Texas Insurance Code, as amended. The constitution and bylaws of this Association and all amendments together with the declarations attached and the application for this policy shall apply to and form a part of this policy. 2. Policy Period. This policy applies only to loss that occurs during the policy period stated on the declarations page and is reported as required in the conditions stated under Duties After A Loss (item 11.a. of this section). 3. 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. Each time there is a loss to any building or structure insured, the amount of insurance applicable to that building or structure will be reduced by the amount of the loss. As repairs are made, the amount of insurance will be reinstated up to the limit of liability shown on the declarations page. Article Policy A Liquidated Demand. A fire insurance policy, in case of a total loss by fire of property insured, shall be held and considered to be a liquidated demand against the company for the full amount of such policy. The provisions of this article shall not apply to personal property. 4. Concealment or Fraud. This policy is void as to you and any other insured, if you or any other insured under this policy has intentionally concealed or misrepresented any material fact or circumstance, made false statements or committed fraud relating to this insurance, whether before or after a loss. 5. Conditions Suspending or Restricting Insurance. Unless otherwise provided, this Company shall not be liable for loss occurring: a. while the hazard is increased by any means within the knowledge and control of the insured, provided such increase in hazard is not usual and incidental to the occupancy as hereon described; or b. while a described building, whether intended for occupancy by owner or tenant, is not occupied beyond the period described in PART 10 (#17) of this policy; or c. following a change in ownership of the insured property; or d. while any other stipulation or condition of this policy is being violated; or 8 e. if the insured property is not kept in a good state of repair; or f. if the insured is involved in any criminal activity effecting, involving, or otherwise utilizing the insured property. 6. Cancellation of Policy. a. You may cancel this policy at any time by notifying us in writing of the date cancellation is to take effect. We will refund to you any unearned premium. b. We may cancel this policy for the reasons stated in this condition by mailing you notice in writing of the date that cancellation takes effect. (1) If this policy has been in effect for less than 90 days and is not a renewal policy, we may cancel this policy for any reason. The effective date of cancellation cannot be before: (a) the 10th day after we mail notice if we cancel for non-payment of premium. (b) the 30th day after we mail notice if we cancel for any other reason. (2) if this policy has been in effect 90 days or more, we may not cancel this policy unless: (a) you do not pay the premium or any portion of the premium when due. (b) the Texas Department of insurance determines that continuation of the policy would violate the Texas Insurance Code or any other laws governing the business of insurance in this State. (c) you submit a fraudulent claim. (d) there is an increase in hazard covered by this policy that is within your control and that would produce an increase in the premium/rate of this policy. The effective date of cancellation cannot be before the 10th day after we mail the notice. Our notice of cancellation must state the reason for cancellation. c. If we cancel, our notice to you will state that if the refund is not included with the notice, it will be returned on demand. d. We may not cancel this policy solely because you are an elected official. 7. Refusal to Renew. We may not refuse to renew this policy: a. because of claims for losses resulting from natural causes. b. solely because you are an elected official. c. based on the condition of the premises unless: (1) there is a change in the condition(s) of the premises,

9 (2) we have notified you of the condition(s) which may result in our refusal to renew this policy, and (3) we have allowed you adequate time to remedy the condition(s). We may refuse to renew this policy: a. if you have filed three or more claims under the policy in any three-year period that did not result from natural causes. If you have filed two claims in a period of less than three years, we must notify you in writing that if you file a third claim during the three-year period, we may refuse to renew this policy by providing you proper notice of our refusal to renew. A claim does not include a claim that is filed but is not paid or payable under the policy. If we refuse to renew this policy, we must deliver to you, or mail to you at your mailing address shown on the declarations page and any mortgagee named on the declarations page, written notice of our refusal to renew not later than the 30th day before the date in which this policy expires. Proof of mailing will be sufficient proof of notice. If we fail to give you proper notice of our decision not to renew, you may require us to renew the policy. 8. Other Insurance. Other insurance is not permitted on property covered by this policy unless otherwise provided by agreement endorsed hereon, or added hereto. If you now have or acquire any other contract of insurance on property covered in whole or in part by this policy, this entire policy shall be void. If a loss covered by this policy is also covered by other insurance approved by us in accordance with the above paragraph, we will pay only the proportion of the loss that the limit of liability that applies under this policy bears to the total amount of insurance covering the loss. 9. Loss Settlement. Our limit of liability and payment for covered losses will not exceed the smallest of the following: (1) the actual cash value at the time of loss determined with proper deduction for depreciation; (2) the cost to repair or replace the damaged property with material of like kind and quality, with proper deduction for depreciation; or (3) the specified limit of liability of the policy. 10. Appraisal. If you and we fail to agree on the actual cash value, amount of loss, or cost of repair or replacement, either can make a written demand for appraisal. Each will then select a competent, independent appraiser and notify the other of the appraiser s identity within 20 days of receipt of the written demand. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that a judge of a district court of a judicial district where the loss occurred make the choice. The two appraisers will then set the amount of loss, stating separately the actual cash value and loss to each item. If the appraisers fail to agree, they will submit their differences to the umpire. An itemized decision agreed to by any two of these three and filed with us will set the amount of the loss. Such award shall be binding on you and us. Each party will pay its own appraiser and bear the other expenses of the appraisal and umpire equally. 11. Duties After A Loss. a. Your duties after a loss. In case of a loss to covered properly caused by a peril insured against, you must: (1) report to the sales representative or the Home Office claims department all losses immediately after the occurrence. (2) notify the proper peace officer in case of loss by criminal act. (3) protect the property from further damage. (a) make reasonable and necessary temporary repairs to protect the property from further damage. Permanent repairs or replacement of the damaged property should not be made until after an adjuster inspects the damages. (b) keep an accurate record of repair expenses. (4) furnish a complete inventory of damaged personal property showing the quantity, description and amount of loss. Attach all bills, receipts and related documents that you have that justify the figures in the inventory. (5) as often as we reasonably require: (a) provide us access to the damaged property. (b) provide us with pertinent records and documents we request and permit us to make copies. (c) submit to examination under oath and sign and swear to it. (6) send to us, if we request, your signed sworn proof of loss within 91 days of our request on a standard form supplied by us. (a) This proof of loss shall state, to the best of your knowledge and belief: (i) the time and cause of loss; (ii) the interest of the insured and all others in the property involved including all liens on the property; 9

10 (iii) other insurance which may cover the loss; (iv) the actual cash value of each item of property and the amount of loss to each item; and (v) the name of the occupant and the occupancy of the building at the time of the loss. b. Our Duties After A Loss. (1) Within 15 days after we receive your written notice of claim, we must: (a) acknowledge receipt of the claim. If our acknowledgement of the claim is not in writing, we will keep a record of the date, method and content of our acknowledgement. (b) begin any investigation of the claim. (c) specify the information you must provide in accordance with Your Duties After A Loss (item 11.a. of this section). We may request more information, if during the investigation of the claim such additional information is necessary. (2) After we receive the information we request, we must notify you in writing whether the claim will be paid or has been denied or whether more information is needed: (a) within 15 business days; or (b) within 30 days if we have reason to believe the loss resulted from arson. (3) if we do not approve payment of your claim or require more time for processing your claim, we must: (a) give the reason for denying your claim; or (b) give the reasons we require more time to process your claim. But, we must either approve or deny your claim within 45 days after requesting more time. 12. Abandonment of Property. There can be no abandonment of property to us. 13. Suit Against Us. No suit or action can be brought unless the policy provisions have been complied with. Action brought against us must be started within two years and one day after the cause of action accrues. 14. Subrogation. Payment of any loss by this Association is an automatic assignment of all right to recovery against any party causing such loss, to the extent that payment was made by this Association. The insured may not waive his right of recovery from any party. If an assignment is sought, an insured must sign and deliver all related papers and cooperate with us Mortgage Clause (without contribution). a. The word mortgagee includes trustee. b. We will pay for any covered loss of or damage to buildings or structures to the mortgagee shown on the declarations page as interests appear. c. The mortgagee has the right to receive loss payment even if the mortgagee has started foreclosure or similar action on the building or structure. d. If we deny your claim because of your acts or because you have failed to comply with the terms of this policy, the mortgagee has the right to receive loss payment if the mortgagee: (1) at our request, pays any premiums due under this policy, if you have failed to do so. (2) submits a signed, sworn statement of loss within 91 days after receiving notice from us of your failure to do so. (3) has notified us of any change in ownership, occupancy or substantial change in risk known to the mortgagee. All of the terms of this policy will then apply directly to the mortgagee. Failure of the mortgagee to comply with d. (1), (2), or (3) above shall void this policy as to the interest of the mortgagee. e. If we pay the mortgagee for any loss or damage and deny payment to you because of your acts or because you have failed to comply with the terms of this policy: (1) the mortgagee s rights under the mortgage will be transferred to us to the extent of the amount we pay. (2) the mortgagee s right to recover the full amount of the mortgagee s claim will not be impaired. At our option, we may pay to the mortgagee the whole principal on the mortgage plus any accrued interest. In this event, your mortgage and note will be transferred to us and you will pay your remaining mortgage debt to us. f. If this policy is cancelled, we will give the mortgagee specifically named on the declarations page written notice of cancellation. If we cancel the policy, we will give the mortgagee the same number of days notice of cancellation we give you. If you cancel the policy, we will give the mortgagee notice of cancellation to be effective on the date stated in the notice. The effective date of cancellation cannot be before the 10th day after the date we mail notice. We will not give notice of cancellation to any successor or assignee of the mortgagee named in this policy. g. If the property described under Dwelling, Other Structures, and Organizational Property is foreclosed upon under the deed of trust, the mortgagee may cancel this policy of insurance and will be entitled to any unearned premiums from this policy.

11 The mortgagee must credit any unearned premium against any deficiency owed by the borrower and return any unearned premium not so credited to the borrower. h. If we elect not to renew this policy, the mortgagee specifically named on the declarations page will be given written notice of the non-renewal not later than the 30th day before the date on which this policy expires. 16. No Benefit to Bailee. We will not recognize any assignment or grant any coverage for the benefit of a person or organization holding, storing or moving property for a fee. 17. Unoccupied Property. If an occupied risk becomes unoccupied, insurance automatically terminates 90 days after the risk becomes unoccupied. The covered perils will remain in force during the 90-day grace period. If you wish to retain insurance, you must report the unoccupancy to the sales representative within the first 90 days, and pay the increased rates required for unoccupied property. A subsequent unoccupancy within one year from date of such occupancy shall carry the increased rate from the first day of such new unoccupancy. 18. Loss to a Pair or Set. In case of loss to an item that is part of a pair or set, the measure of loss shall be a reasonable and fair proportion of the total value of the pair or set. The importance of the item will be considered in assessing the loss. Such loss will not be considered a total loss of the pair or set. 19. Salvage Rights. Upon settlement by the Association of any loss to insured property, the salvage, if any, shall belong to the IN WITNESS WHEREOF this Company has executed and attested these presents, but this policy shall not be valid unless countersigned by an authorized officer in the Home Office of this Company. President Association. There will be no abandonment to this Association of any property. 20. Loss Payment. a. If we notify you that we will pay your claim, or part of your claim, we must pay within 5 business days after we notify you. b. If payment of your claim or part of your claim requires the performance of an act by you, we must pay within 5 business days after the date you perform the act. 21. Catastrophe Claims. If a claim results from a weather related catastrophe or a major natural disaster, each claim handling deadline shown under the Duties After A Loss and Loss Payment provisions is extended for an additional 15 days. Catastrophe or Major Natural Disaster means a weather related event which: a. is declared a disaster under the Texas Disaster Act of 1975; or b. is determined to be a catastrophe by the Texas Department of Insurance. When a roof is damaged or destroyed within a declared State or Federal disaster area, a sixty day extension is granted to repair or replace the damaged or destroyed roof, but the insured remains responsible for protecting the property during this extension period. 22. Change in Use. Should an insured building be used for a purpose other than the purpose stated in the policy, you must report the change in use to the sales representative within five days. Secretary 11