American National Property and Casualty Company v. Stutte et al

Filing 18

MOTION to Amend/Revise 6 Answer to Complaint, Counterclaim,, by Carol Ann Stutte, Laura Jean Stutte. (Attachments: # 1 Supplemental Pleading, # 2 Supplemental Pleading (Redline Version))(Alliman, Peter)

IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE

AMERICAN NATIONAL PROPERTY
AND CASUALTY COMPANY,
Plaintiff, Counterclaim-Defendant,
v.
CAROL ANN STUTTE; LAURA JEAN
STUTTE,
Defendants, Counterclaim-Plaintiffs,
and
CHASE HOME FINANCE, LLC,
Defendant.

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CIVIL ACTION
NO. 3:11-CV-219

ANSWER AND AMENDED
COUNTERCLAIM
JURY TRIAL DEMANDED

Defendants Carol Ann Stutte and Laura Jean Stutte (collectively, the “Stuttes”), by their
attorneys, hereby answer the Complaint for Declaratory Judgment of Plaintiff American National
Property And Casualty Company (“ANPAC”), and assert a counterclaim against ANPAC.
THE STUTTES’ ANSWER TO ANPAC’S COMPLAINT FOR
DECLARATORY JUDGMENT
The Stuttes answer ANPAC’s Complaint for Declaratory Judgment as follows:
1.

Admitted.

2.

The Stuttes lack knowledge or information sufficient to form a belief about the

truth of the allegations in this paragraph.

3.

Admitted.1

3.

The allegations contained in this paragraph constitute conclusions of law to which

no response is required. To the extent a response is required, the Stuttes admit only that ANPAC
is a Missouri corporation with its principal place of business in Springfield, Missouri; the Stuttes
are residents of Knoxville, Tennessee; and the amount in controversy exceeds $75,000.00. The
Stuttes lack knowledge or information sufficient to form a belief about the truth of the remaining
allegations in this paragraph.
4.

The Stuttes deny that the total amount of their insurance claim is $276,275.46.

The Stuttes admit the remaining allegations in this paragraph.
5.

The Stuttes admit that their insurance claim was denied by correspondence from

ANPAC dated May 12, 2011. The remaining allegations contained in this paragraph constitute
conclusions of law to which no response is required. To the extent a response is required, the
Stuttes deny the remaining allegations in this paragraph.
6.

The allegations contained in this paragraph constitute conclusions of law to which

no response is required. To the extent a response is required, the Stuttes deny the allegations in
this paragraph.
7.

The allegations contained in this paragraph constitute conclusions of law to which

no response is required. To the extent a response is required, the Stuttes lack knowledge or
information sufficient to form a belief about the truth of the allegations in this paragraph.
8.

The Stuttes lack knowledge or information sufficient to form a belief about the

truth of the allegations in this paragraph.

1

Because the Complaint inadvertently contains two paragraphs numbered “3,” this Answer also
contains two paragraphs numbered “3.”

2

9.

The allegations contained in this paragraph constitute conclusions of law to which

no response is required. To the extent a response is required, the Stuttes deny the allegations in
this paragraph.
10.

This paragraph contains no allegations to which a response is required. To the

extent a response is required, the Stuttes deny that ANPAC is entitled to any of the relief that it
seeks.
The remainder of the Complaint consists of ANPAC’s request for relief, to which no
response is required. To the extent a response is required, the Stuttes deny that ANPAC is
entitled to any of the relief that it seeks.
Each and every allegation of the Complaint not heretofore expressly admitted or denied is
hereby denied.
THE STUTTES’ AFFIRMATIVE DEFENSES
The Stuttes assert the following affirmative defenses pursuant to Fed. R. Civ. P. 8(c):
First Affirmative Defense
ANPAC’s Complaint fails to state a claim upon which relief can be granted.
Second Affirmative Defense
ANPAC cannot assert claims against the Stuttes based on the terms, conditions, and other
provisions of the policy at issue because ANPAC has breached its obligations under that policy.
Third Affirmative Defense
ANPAC’s Complaint is barred under the doctrine of unclean hands.
Fourth Affirmative Defense
ANPAC’s Complaint is barred under the doctrine of laches.
Fifth Affirmative Defense
ANPAC’s Complaint is barred under the doctrines of waiver and estoppel.
3

Sixth Affirmative Defense
To the extent that ANPAC relies on ambiguous contractual provisions, those provisions
must be construed against ANPAC, thus requiring denial of ANPAC’s Complaint.
Seventh Affirmative Defense
ANPAC’s Complaint may be barred or limited by the terms and conditions of the policy
at issue, or by ANPAC’s conduct.
Eighth Affirmative Defense
To the extent that ANPAC relies on vague, unidentified, or undefined policy terms,
conditions, or exclusions, the Stuttes reserve the right to supplement their affirmative defenses
and to raise additional defenses.
Prayer for Relief from ANPAC’s Complaint
WHEREFORE, the Stuttes respectfully request that the Court enter judgment:
(a)

Denying ANPAC’s requested relief against the Stuttes, and entering judgment in
favor of the Stuttes and against ANPAC;

(b)

Dismissing ANPAC’s Complaint with prejudice; and

(c)

Granting the Stuttes such other and further relief as the Court may deem just and
proper, including costs and fees incurred in defense of ANPAC’s Complaint.

4

THE STUTTES’ AMENDED COUNTERCLAIM AGAINST ANPAC
The Stuttes bring this amended counterclaim against ANPAC pursuant to Fed. R. Civ. P.
13(a) and 13(e), and in support thereof, state as follows:
Nature of Action
1.

This is a civil action for damages and declaratory relief arising from ANPAC’s

refusal to pay the Stuttes’ claim under a homeowners insurance policy for losses and additional
living expenses resulting from the destruction of the Stuttes’ home and its contents by fire at
approximately 8:00 p.m. on September 4, 2010.
The ANPAC Homeowners Policy
2.

The Stuttes purchased Tennessee Special Homeowners Policy No. 41-H-V66-

965-7 (the “Policy”) from ANPAC. The Policy is attached hereto as Exhibit A.
3.

The Policy insures, among other things, the Stuttes’ home, other structures, and

personal property located at 2715 Highway 360, Vonore, Monroe County, Tennessee (“home” or
“home and contents”) for the period from June 10, 2010 to June 10, 2011.
4.

Under the terms of the Policy, ANPAC is obligated to pay for “accidental direct

physical loss” – including loss caused by fire – to the Stuttes’ home and contents, subject to the
applicable coverage limits set forth in the Policy.
5.

Under the terms of the Policy, ANPAC is also obligated to reimburse the Stuttes’

“additional living expenses” for a period of up to 36 months if a covered loss renders their home
uninhabitable, subject to the applicable coverage limits set forth in the Policy.
The Fire and the Stuttes’ Claim
6.

At approximately 3:00 p.m. on September 4, 2010, the Stuttes, their daughter, and

a family friend departed the Stuttes’ home for a planned vacation to Nashville, Tennessee.

5

7.

Upon arriving in Nashville that same day, the Stuttes and their travel companions

checked into the Holiday Inn Express Hotel and Suites at 714 Spence Lane in the southeast part
of town.
8.

That same evening, the Stuttes and their travel companions drove into downtown

Nashville, parked their car at the NCB Garage, and went to dinner at the Wildhorse Saloon.
9.

At approximately 8:00 p.m., while at the restaurant, the Stuttes were informed by

telephone that their home was on fire. Carol Ann Stutte then spoke by telephone with a member
of the Monroe County Sheriff’s Office, who confirmed that the Stuttes’ home was fully engulfed
in flames.
10.

The fire completely destroyed the Stuttes’ home and contents and rendered their

home uninhabitable.
11.

The Stuttes timely noticed an insurance claim under the Policy for approximately

$300,000.
12.

The Stuttes provided ANPAC with documentary and testimonial evidence from

multiple sources and witnesses, all of which confirmed that the Stuttes and all other members of
their household were physically present in Nashville, Tennessee, approximately 200 miles away
from their home, at the time of the fire. The evidence provided to ANPAC included a parking
receipt from NCB Garage dated “SEP 4” and time-stamped “19:30” (7:30 p.m.), receipts for
admission to the Wildhorse Saloon dated “9/4/2010” and time-stamped “19:48” (7:48 p.m.) and
“19:49” (7:49 p.m.), and a dinner receipt from the Wildhorse Saloon dated “9/4/2010” and timestamped “20:25” (8:25 p.m.).
13.

The Stuttes also provided ANPAC with a copy of an Incident Report from the

Monroe County Sherriff’s Office dated August 9, 2010. The report describes an incident that

6

occurred on August 6, 2010 – approximately one month before the fire – in which the Stuttes’
neighbor, Janice Millsaps, threatened, among other things, to burn down the Stuttes’ home. The
Stuttes have filed a civil lawsuit against Ms. Millsaps in the Chancery Court for Monroe County,
Tennessee, a copy of which is attached hereto as Exhibit B.
14.

The Stuttes also provided ANPAC with documentary evidence showing that, at

the time of the fire, the Stuttes had good credit, they were not suffering any financial distress,
and that they had no motive – financial or otherwise – to cause the destruction of their home and
contents.
15.

Since the fire rendered their home uninhabitable, the Stuttes have incurred, and

continue to incur, additional living expenses as defined by the Policy. The Stuttes have timely
provided, and continue to provide, ANPAC with documentation of these expenses. As of June 1,
2011, the Stuttes’ unreimbursed additional living expenses totaled approximately $5,000.
16.

At ANPAC’s request, the Stuttes have paid, and continue to pay, for electricity

and security lights at the site where their home used to stand.
17.

The Stuttes have timely paid, and continue to pay, all mortgage payments due on

their home to Defendant Chase Home Finance, LLC, and all insurance payments due on their
home and contents to ANPAC.
The Coverage Dispute
18.

ANPAC denied the Stuttes’ insurance claim by letter dated May 12, 2011. That

same day, ANPAC filed its Complaint for Declaratory Judgment in this Court.
19.

ANPAC’s denial letter and Complaint falsely accused the Stuttes of intentionally

causing the fire that destroyed their home and contents, and of committing concealment or fraud

7

relating to their insurance claim. ANPAC did not cite any other basis for refusing to honor its
obligations under the Policy.
20.

ANPAC did not cite or plead any specific facts in support of its coverage denial.

The denial letter and Complaint stated only that “[i]t was determined through investigation that
the preponderance of the evidence” supported ANPAC’s allegations. ANPAC therefore failed to
explain how and why it determined that the Stuttes intentionally caused the fire, despite the fact
that ANPAC had evidence in its possession proving that the Stuttes were about 200 miles away
from their home when it burned down, and identifying a suspect who had harassed the Stuttes
and specifically threatened to burn down their home in the months leading up to the fire.
21.

By letter dated May 19, 2011, the Stuttes requested copies of the information on

which ANPAC based its denial of their insurance claim. ANPAC did not respond to the Stuttes’
request.
22.

Instead, on May 20, 2011, the Stuttes received a two-sentence letter from ANPAC

stating that the Policy had been cancelled, effective on September 4, 2010 at 12:01 a.m., which is
approximately 20 hours before the Stuttes’ home and contents were destroyed by fire.
23.

Two weeks earlier, on May 6, 2011, ANPAC had sent the Stuttes a “Notice of

Premium Due” on their destroyed home and contents for the period from June 10, 2011 to June
10, 2012. By this notice, ANPAC had attempted to renew the Policy and increase the Stuttes’
premium by nearly 30 percent due to a recent negative entry on their credit report, which was a
direct result of the financial strain on the Stuttes caused by ANPAC’s failure to pay their claim.
24.

The Stuttes dispute ANPAC’s denial of coverage and cancellation of the Policy.

25.

The Stuttes have timely paid all premiums due and have complied or substantially

complied with all other pertinent terms and conditions of the Policy.

8

COUNT ONE
(Breach of Contract)
26.

The Stuttes hereby incorporate paragraphs 1 through 25 of this counterclaim, as if

fully set forth herein.
27.

ANPAC has breached its contractual duties under the Policy to pay for the loss to

the Stuttes’ home and contents, and for the unreimbursed additional living expenses already
incurred by the Stuttes.
28.

As a direct result of this breach of contract, the Stuttes have been and will be

deprived of the benefits of the insurance coverage for which the Stuttes paid premiums.
29.

As a further direct result of this breach of contract, the Stuttes have been forced to

incur and will continue to incur additional consequential damages, including, without limitation,
attorneys’ fees and other expenses in defending this litigation and attempting to obtain coverage
under the Policy, lost earnings on amounts wrongfully withheld by ANPAC, and damage to their
credit due to the financial strain caused by ANPAC’s breach, which damages are not subject to
the Policy’s limits of liability.
COUNT TWO
(Declaratory Judgment)
30.

The Stuttes hereby incorporate paragraphs 1 through 29 of this counterclaim, as if

fully set forth herein.
31.

ANPAC has denied the Stuttes’ insurance claim and cancelled the Policy, thereby

disclaiming ANPAC’s ongoing obligation to reimburse the Stuttes’ additional living expenses as
they accrue for up to 36 months after the date of the loss.
32.

The Stuttes will continue to incur additional living expenses as defined by the

Policy.

9

33.

An actual controversy of a justiciable nature presently exists between the Stuttes

and ANPAC concerning the existence of the Policy and the ongoing rights and obligations of the
parties with respect to coverage for additional living expenses. Accordingly, the Stuttes request
a declaratory judgment pursuant to 28 U.S.C. § 2201 et seq. and Rule 57 of the Federal Rules of
Civil Procedure, declaring such rights and obligations. The issuance of declaratory relief by this
Court will terminate some or all of the existing controversy among the parties.
COUNT THREE
(Tennessee Consumer Protection Act, Tenn. Code Ann. § 47-18-101 et seq.)
34.

The Stuttes hereby incorporate paragraphs 1 through 33 of this counterclaim, as if

fully set forth herein.
35.

ANPAC has engaged in unfair or deceptive acts or practices by denying coverage

for the Stuttes’ claim, cancelling the Policy, and filing this coverage action based on allegations
ANPAC knows, or should know, to be false, in an effort to avoid its obligations under the Policy.
36.

Specifically, ANPAC accused the Stuttes of destroying their home and contents,

and of committing concealment or fraud relating to their claim, even though ANPAC knew, or
should have known, that these allegations were false based on evidence in its possession
concerning the Stuttes whereabouts at the time of the fire.
37.

As a direct result of these unfair or deceptive acts or practices, the Stuttes have

suffered and continue to suffer the ascertainable loss of money, property, and/or other things of
value, including, without limitation, insurance proceeds for the loss to their home and contents
and additional living expenses, attorneys’ fees and other expenses in defending this litigation and
attempting to obtain coverage under the Policy, lost earnings on the amounts wrongfully
withheld by ANPAC, and damage to their credit. In addition, the Stuttes are entitled to recover

10

treble damages, up to three times the actual damages they have sustained, pursuant to Tenn.
Code Ann. § 47-18-109(a)(3).
COUNT FOUR
(Bad Faith Refusal to Pay, Tenn. Code Ann. § 56-7-105)
38.

The Stuttes hereby incorporate paragraphs 1 through 37 of this Counterclaim, as if

fully set forth herein.
39.

After a fire completely destroyed their home and contents on September 4, 2010,

the Stuttes timely noticed an insurance claim for the loss under ANPAC Special Homeowners
Policy No. 41-H-V66-965-7, at which point the Policy, by its terms, became due and payable.
40.

By letter to ANPAC dated May 19, 2011, the Stuttes made a formal demand for

payment under the Policy and provided notice that, if ANPAC did not pay the Stuttes’ claim for
the loss and their additional living expenses within sixty (60) days, the Stuttes would pursue a
bad faith penalty claim under Tennessee Code Annotated § 56-7-105. This formal demand letter
is attached hereto as Exhibit C.
41.

The Stuttes waited more than sixty (60) days before filing this counterclaim for

bad faith, during which time ANPAC did not respond to the Stuttes’ formal demand or pay the
Stuttes’ claim.
42.

ANPAC’s refusal to pay the Stuttes’ insurance claim was not in good faith. The

only bases for ANPAC’s refusal were its allegations that the Stuttes intentionally caused the fire
and committed concealment or fraud relating to their claim. Upon information and belief,
ANPAC’s investigation and claims handling did not yield sufficient legitimate grounds to
support its conclusory allegations.

To the contrary, ANPAC discovered documentary and

testimonial evidence from multiple sources confirming that the Stuttes were approximately 200
miles away from their home at the time of the fire and, therefore, they could not have set the fire.

11

The Stuttes also provided ANPAC with documentary evidence showing that, at the time of the
fire, the Stuttes had good credit, they were not suffering any financial distress, and they had no
motive – financial or otherwise – to cause the destruction of their home and contents.
43.

ANPAC acted in bad faith by, inter alia, delaying for months after discovering

evidence that exonerated the Stuttes, failing to reimburse the Stuttes’ in full for their additional
living expenses, denying the Stuttes’ claim and cancelling the Policy, and by filing the present
litigation—all without sufficient legitimate grounds, and without providing any specific factual
support for these actions. Because ANPAC has failed to provide any specific factual support for
its refusal to pay, the Stuttes reserve their right, based on facts discovered during the course of
this litigation, to assert that additional actions taken by ANPAC constitute bad faith under Tenn.
Code Ann. § 56-5-107.
44.

As a direct result of ANPAC’s bad faith refusal to pay, the Stuttes have suffered

additional expenses, losses, and injuries, including, without limitation, attorneys’ fees and other
expenses in attempting to obtain coverage under the Policy and in defending this litigation, lost
earnings on the amounts wrongfully withheld by ANPAC, damage to their credit, and emotional
distress.
Prayer for Relief
WHEREFORE, the Stuttes respectfully request that the Court enter judgment:
(a)

Awarding the Stuttes actual compensatory and consequential damages sustained
as a result of ANPAC’s breach of contract and ANPAC’s unfair or deceptive acts
or practices;

(b)

Declaring that ANPAC has a continuing obligation under the Policy to provide
coverage for the Stuttes’ additional living expenses as they accrue;

(c)

Awarding the Stuttes treble damages equal to three times the amount of the actual
compensatory and consequential damages suffered as a result of ANPAC’s unfair
or deceptive acts or practices;

12

(d)

Awarding the Stuttes a sum not to exceed twenty-five percent (25%) of the
liability for the loss, in accordance with Tenn. Code Ann. § 56-7-105;

(e)

Awarding reasonable attorneys’ fees and other expenses and costs incurred by the
Stuttes in defending and prosecuting this litigation; and

(f)

Such other and further relief as the Court deems just and proper.2
JURY TRIAL DEMANDED

The Stuttes request a trial by jury on all issues so triable.

Dated: July 20, 2011

Respectfully submitted,
/s/ Peter J. Alliman
f
Peter J. Alliman (BPR No. 5984)
WHITE, CARSON & ALLIMAN, P.C.
135 College Street
Madisonville, TN 37354
Tel: [phone]
Fax: [phone]
Email: [e-mail]
Attorney for Defendants Carol Ann Stutte
and Laura Jean Stutte

Seth A. Tucker (pro hac vice)
Scott J. Levitt (pro hac vice)
Jonathan G. Hardin (pro hac vice to be filed)
COVINGTON & BURLING LLP
1201 Pennsylvania Avenue NW
Washington, DC 20004-2401
Tel: [phone]
Fax: [phone]

2

The Stuttes also reserve their right to bring additional claims, including, without limitation, for
defamation, fraud, and intentional infliction of emotional distress, against ANPAC based on facts
discovered in the course of this litigation.

13

Email: [e-mail]
[e-mail]
[e-mail]
Of Counsel for Defendants Carol Ann Stutte
and Laura Jean Stutte

14

CERTIFICATE OF SERVICE
I hereby certify that on this 20th day of July, 2011, a copy of the foregoing ANSWER
AND AMENDED COUNTERCLAIM was filed electronically using the Court’s Electronic
Filing System. Notice of this filing will be served through the Electronic Filing System to
parties and counsel who are Filing Users, and by first-class mail to any party or counsel who is
not served through the Electronic Filing System.

/s/ Peter J. Alliman
f
Peter J. Alliman (BPR No. 5984)
WHITE, CARSON & ALLIMAN, P.C
135 College Street
Madisonville, TN 37354
Tel: [phone]
Fax: [phone]
Email: [e-mail]
Attorney for Defendants Carol Ann Stutte
and Laura Jean Stutte

Exhibit A

AMERICAN NATIONAL PROPERTY AND CASUALTV CO
POLICY NUMBER

41-H-V66-965-7
POLICY TERM

06-10-2010 To06-10-2011
1949 E. SUNSHINE
SPRINGFIELD, MISSOURI 65699·0001
(417) 867'()220

AND SUBSEQUENT RENEWALS

AT 12: 01 A.M.

(STD)

AMENDED DECLARATION
THIS
REPLACES ALL PRIOR DECLARATIONS. IF ANY. AND WITH POLICY PROVISIONS
AND ANY ENDORSEMENTS ISSUED TO FORM A PART THEREOF COMPLETES THIS

HOMEOWNERS POLICY

CA$HBACK
CHANGE EFFECTIVE 08-16-2010 REQUESTOR: AGENT
CHANGE TYPE: COV

NAMED INSURED AND P.O. ADDRESS

blDtlr~LR8~r~'l1Cj&w, LLC
PO BOX 47020
ATL~~A GA
30362-0020

STUTTE, CAROL & LAURA J
2715 HIGHWAY 360
VONORE TN 37885-2918

A~ CUSTOMER SERVICE, CALL
ERIC KURTZ

PREMIUM TO BE PAID BY

MORTGAGEE

- OTHER STRUCTURES
COVERAGE C - PERSONAL PROPERTY

$20,600

COVERAGE B

$154,500

COVERAGE D
SECTION II
COVERAGE E

- ~B~J~g~~W~~bNTHLY
- PERSONAL LIABILITY

(EACH OCCURRENCE)

-

(EACH PERSON)

COVERAGE F

PH #865-977-8370
A0298-P 1-067

MAXIMUM OFr:$.,4,;;12:0', .

MEDICAL PAYMENTS TO OTHERS

i_··'·'

$51,500

.-"

$300,000
$5,000

----------------------------------- RATING INFORMATION ---------------------------------CONSTRUCTION: FRAME
PROTECTION: 10 ZONE: 55
1 FAMILY DWELLING, BUILT IN 1970.
FIRE DIST: VONORE FD
DISCOUNTS:
'CLAIM FREE +' - 54%, HOME ADVAN - 10%, UTILITY SYSTEM/ROOF CREDIT - 64%,
PROTECTIVE DEVICE - 5%

ST CHASE HOME FINANCE, LLC
ITS SUCCESSORS AND/OR ASSIGNS
PO BOX 47020
ATLANTA GA 30362-0020
LOAN NUMBER - 1992481846

SH91412 04-06 01

$975.00
08-26-2010

$133.00

$88.00

$1236.00

$261. 00
AX3-26-21

ENDORSEMENT

SH3.41
SH31410
SH91109
SH91412
SH91909
SH9291

0606
1009
0110
0406
0506
1009

Special

DESCRIPTIONS

TN HOMEOWNERS SPECIAL FORM
SPECIAL PROTECTION PACKAGE
TN HOMEOWNERS AMENDATORY
ORDINANCE OR LAW COVERAGE
EQUIPMENT BREAKDOWN COVG
CONTENTS REPLACEMENT COST

Notice

to Lienholders

and Mortgagees:

This is a continuous form policy. Coverage for the lienholder and/or
mortgagee will continue in force until cancelled by written notice.
The company reserves the right to cancel this policy giving the
lienholder and/or mortgagee a ten day notice of cancellation.

IMPORTANT

INFORMATION

ON HOW TO REPORT A CLAIM

Should you need to report a claim under this policy, please call (Toll-Free) 1-800-333-2860.
Please be prepared to furnish the following
1)
2)
3)
4)
5)

information:

Date and Time of Loss
Facts of Occurrence
Location of Loss if other than the resid~nce premises
Name, Address, and Phone Number of any injured parties
If applicable, name of law enforcement agency or fire department
number

and the incident

As a Policyholder, you are required to protect your property from further damage, make
reasonable and necessary temporary repairs, and keep an accurate record of repair
expenditures.

IMPORTANT

INFORMATION

REGARDING YOUR POLICY

Should any question or dispute arise about your policy, first contact the agent who issued this
policy or you may contact the company at the address shown below:
American

National Property And Casualty
1949 East Sunshine
Springfield, Missouri 65899-0001
Telephone #[phone]

2

Authorized Representative

TENNESSEE

IIIIIII
SPECIAL

IIIIIII
HOMEOWNERS

IIIIIII
POLICY

I

AMERiCAN NATIONAL PROPERTY AND CASUALTY COMPANY
American National Corporate Centre

1949 E. Sunshine

Springfield, MO 65899-0001
417-887 -0220

SH-3.41 (6-06)

I

SPECIAL HOMEOWNERS POLICY FORM SH-3
QUICK REFERENCE
DECLARATION PAGE
Your Name
Location of Your Residence
Policy Inception and Expiration Date of Coverage
Policy Coverages and Limits of Liability
Policy Coverage Deductible Amounts

TABLE OF CONTENTS

BEGINNING ON PAGE

AGREEMENT ........... ....................................................................................................................................... 1
DEFINITIONS .................................................................................................................................................. 1
SECtION'1 - COVERAGES
COVERAGES
Coverage A - Dwelling ...................................................................................................................... 2
Coverage B - Other Structures ......................................................................................................... 2
Coverage C - Personal Property ................ " .................................................................................... 3
Property Not Covered ........................................................................................................................ 3
Coverage D - Loss of Use ................................................................................................................ 4
Additional Coverages ........................................................................................................................ 4

PERILS INSURED AGAINST ....................................................................................................................6
EXCLUSIONS ............................................................................................................................................8
CONDITIONS .............................................................................................................................................9
SECTION II - LIABILITY COVERAGES
COVERAGES
Coverage E - Personal Liability ...................................................................................................... 12
Coverage F - Medical Payments to Others .................................................................................... 12

EXCLUSIONS ..........................................................................................................................................12
ADDITIONAL COVERAGES ...................................................................................................................15
CONDITIONS ...........................................................................................................................................16
SECTION I AND SECTION 11- CONDITIONS .............................................................................................. 16

SH-3.41 (6-06)

HOMEOWNERS POLICY FORM 3
AGREEMENT
, '

We will provide the insurance described in this policy in return for the premium and compliance with all
applicable provisions of this policy. The policy deductible applies to each Section I occurrence unless
specifically excepted. The deductible does not apply to Section II losses.
Common Cause of Loss Deductible
If you incur loss to your property covered under this policy and any other covered property owned by you,
from a common cause of loss, we will apply only the highest applicable deductible to the aggregate
amount of property damages. If the other covered property owned by you is a motor vehicle, the loss
must be covered under the motor vehicle's Coverage D - Comprehensive Coverage. Common cause of
loss is one occurrence which results in loss to more than one item of covered property owned by you.
The properties incurring loss by a common cause of loss must be covered by this policy and another
policy that includes a Common Cause of Loss Deductible provision which is issued by American National
Property And Casualty Company or American National General Insurance Company.
This provision does not apply if the common cause of loss results from the peril of earthquake.
DEFINITIONS
Throughout this policy, "you" and "your" refer to the "named insured" shown in the Declarations and the
spouse if a resident of the same household, and "we," "us," and "our" refer to the Company providing this
insurance. In addition, certain words and phrases are defined as follows:
1,

2.

3.

"Actual cash value" means the amount it
would 'currently cost to repair or replace the
covered property with new material of like kind
and quality, less allowance for physical
deterioration and depreciation, including
obsolescence.

6.

"Insured" means you and the following
residents of your household:
a.
b.

"Bodily injury" means bodily harm, sickness,
or disease, including required care, loss of
services, and death resulting therefrom.

Under Section II, "insured" also means:
c.

"Business" or "business pursuits" includes:
a.
b.

trade, profession, or occupation (which
includes farming); and
home day-care services (which includes
one or more persons in your care at any
one time, for which you receive any
compensation).
The following are not
considered business pursuits:

d.

(1) mutual exchange of home day-care
services for which you receive no
compensation; or
(2) providing home day-care services for
a relative.

7.

"Declarations"
means
the
policy
Declarations, any amended Declarations,
the most recent renewal certificate, or any
endorsement changing any of these.

5.

"Fungus" means any type or form of fungus,
including mold, mildew, mycotoxins, spores,
scents or byproducts or released by fungi.

SH-3.41 (6-06)

b.

c.

1

with respect to animals or watercraft to
which this policy applies, any person or
organization legally responsible for these
animals or watercraft which are owned by
you or any person included in 6a or 6b. A
person or organization using or having
custody of these animals or watercraft in
the course of any business, or without
permission of the owner is not an insured;
and
with respect to any vehicle to which this
policy applies, any person while engaged
in your employment or the employment of
any person included in 6a or 6b.

"Insured location" means:
8.

4.

your relatives;
any other person under the age of 21 who
is in the care of any person named above.

the residence premises;
the part of any other premises, other
structures, and grounds, used by you as a
residence and which is shown in the
Declarations, or which is acquired by you
during the policy period for your use as a
residence;
any premises used by you in connection
with the premises inCluded in 7a or 7b;

12. "Property damage" means physical injury to
or destruction of tangible property, including
loss of use of this property.

d.

any part of a premises not owned by any
insured but where any insured is
temporarily residing;
e. vacant land owned by or rented to any
insured other than farmland;
f. land owned by or rented to any insured
on which a one- or two-family dwelling is
being constructed as a residence for any
insured;
g. individual or family cemetery plots or
burial vaults of any insured; and
h. any part of a premises occasionally rented
t9 'any insured for other than business
purposes.
8.

9.

13. "Punitive or exemplary damages" are
damages which may be imposed to punish a
wrongdoer and to deter others from similar
conduct.

14. "Residence employee" means an employee
of any insured who performs duties in
connection with the maintenance or use of the
residence premises, including household or
domestic services, or who performs duties
elsewhere of a similar nature not in connection
with the business of any insured.

"Limit of liability" means the maximum
amount we will pay for losses as a result of
anyone occurrence.

15. "Residence premises" means the one- or
two-family dwelling, other structures, and
grounds or that part of any other building
where you reside and which is shown as the
insured property in the Declarations.

This definition applies to Section II only:
"motor vehicle" means:
a.

a motorized land vehicle designed for
travel on public roads or subject to motor
vehicle registration.
A motorized land
vehicle in dead storage on an insured
location is not a motor vehicle;
b. a trailer or semitrailer designed for travel
on public roads and subject to motor
vehicle registration. A boat, camp, home,
or utility trailer not being towed by or
carried on a vehicle included in 9a is not a
motor vehicle;
c. a motorized golf cart, snowmobile, or
other motorized land vehicle owned by
any insured and designed for recreational
use off public roads, while off an insured
location. A motorized golf cart while used
for golfing purposes is not a motor
vehicle; and
d. any vehicle while being towed by or
carried on a vehicle included in 9a, 9b, or
gc.

SECTION I - COVERAGES
COVERAGE A - DWELLING

We cover:
a.

b.

c.

This coverage does not apply to land, including
land on which the dwelling is located.

10. This definition applies to Section II only:
"occurrence" when used in Section II of this
policy, means an accident, including exposure
to conditions, which results in:
a.
b.

COVERAGE B - OTHER STRUCTURES

We cover other structures on the residence
premises, separated from the dwelling by clear
space. Structures connected to the dwelling by
only a fence, utility line, or similar connection are
considered to be other structures.

bodily injury; or
property damage

during the

policy period.

Repeated

the dwelling on the resndence premises
shown in the Declarations used prinCipally as
a private residence, including structures
attached to the dwelling;
materials and supplies located on or adjacent
to the residence premises for use in the
construction, alteration, or repair of the
dwelling or other structures on the residence
premises; and
wall-to-wall carpeting attached to the dwelling
on the residence premises.

or

continuous exposure to substantially the same
This coverage does not apply to land, including
land on which the other structures are located.

general conditions is considered to be one
occurrence.

We do not cover other structures:

11. "Pollutants" means any solid, liquid,
gaseous, or thermal irritant or contaminant,
including but not limited to smoke, vapors,
soot, fumes, acids, alkalis, toxic chemicals,
and waste. Waste includes materials to be
recyc,led, reconditioned, or reclaimed.

a.

2

used in whole or in part for business
purposes;

SH-3.41 (6-06)

b.

c.

8.

The greater of $3,000 or 1% of Coverage A for
loss by theft of guns and related equipment.

9.

rented or held for rental to any person not a
tenant of the dwelling, other than a residence
employee, unless used solely as a private
garage; or
located away from the residence premises.

The greater of $2,500 or % of 1% of Coverage
A on property, on the residence premises,
used at anytime or in any manner for any
business purpose whether or not the
business is operational at the time of loss.
Property used or intended for use in any
business, while away from the residence
premises, is limited to $1,000. Business
property on or away from the residence
premises does not include Electronic Data
Processing equipment, the recording or
storage media used with tile equipment, or
business merchandise.

COVERAGE C - PERSONAL PROPERTY
We cover personal property owned or used by any
insured while it is anywhere in the world. At your
request, we will cover personal property owned by
others while the property is on the part of the
residence premises occupied by any insured.
Also, we will cover, at your request, personal
property owned by a guest or a residence
employee, while the property is in any residence
occupied by any insured.

10. The greater of $10,000 or 1% of Coverage A
for loss by theft of Oriental rugs, tapestries,
wall hangings, or similar articles. Oriental rugs
include, but are not limited to, Persian
(Iranian), Turkish, Chinese, and Indian rugs.

Our limit of liability for personal property usually
situated at any insured's residence, other than
the residence premises, is 10% of the limit of
liability for Coverage C. Personal property in a
newly acquired principal residence is not subject
to this limitation for the 30 days immediately after
you begin ,to move the property there.

11. The greater of $5,000 or 1 % of Coverage A for
computer hardware and software, whether
used for personal or business reasons,
except as limited under Property Not Covered,
item 10.

Special Limits of Liability. These limits do not
increase the Coverage C limit of liability as
shown on the Declarations page. The special limit
for each following numbered category is the total
limit for each occurrence for all property in that
numbered category.
1.

2.

12. $250 per article for loss by theft for comic
books, including those that are part of a
collection, and collectable cards, including but
not limited to sports cards, fictional character
cards and other similar cards. The total limit
of liability is $2,500.

The greater of $300 or 1/10 of 1% of
Coverage A on money, bank notes, bullion,
gold other than goldware, silver other than
silverware, platinum, coins, and medals.

Property Not Covered. We do not cover:

1.
2.

The greater of $1,500 or % of 1% of
Coverage A on securities, accounts, deeds,
evidences of debt, letters of credit, notes other
than bank notes, manuscripts, personal
records, passports, tickets, and stamps. This
dollar limit applies to these categories
regardless of the medium (such as paper or
computer software) on which the material
exists. This limit includes the cost to research,
replace, or restore the information from the
lost or damaged material.

articles separately described and specifically
insured in this or any other insurance contract;
animals, birds, or fish unless described and
specifically insured in this policy;

3. any motorized land vehicles except:
a.
b.
4.

those used solely to service an insured's
residence and not licensed for road use;
or
those
designed
for
assisting
the
handicapped;

any device or ~Y7tem, used for the
receiving,
recording,
or
transmitting,
reproduction of sound or pictures, which may
be operated from the electrical system of any
motor vehicle, motorized land conveyance,
aircraft, or watercraft. Such devices include:

3.

$2,000 on watercraft, including their trailers,
furnishings, equipment, and outboard motors.

4.

$1,500 on trailers not used with watercraft.

5.

$5,000 on grave markers.

6.

$1,000 per article to a total limit for all articles
being the greater of $2,500 or Y2 of 1% of
Coverage A for loss by theft of jewelry,
watches, furs, and precious and semiprecious
stones.

c.
d.
e.

The greater of $2,500 or 1% of Coverage A for
loss by theft of silverware, silverplated ware,
goldware, goldplated ware, pewter ware,
plated ware, flatware, hollowware, tea sets
and trays.

This exclusion applies only for such devices or
media while in or upon a motor vehicle,
motorized land vehicle, or watercraft, whether
or not attached;

7.

SH-3.41 (6-06)

a.

citizen band radios, radio transmitters, or
receivers;

b. radio telephones;

3

radar detectors;
televisions; or
accessories, antennas, tapes, and wires
used with such systems or devices.

5.
6.

value shall not include any expense that does
not continue while that part of the residence
premises rented or held for rental is
uninhabitable.

aircraft and parts;
property of roomers, boarders, and other
tenants, except property of roomers and
boarders who are residence employees of
the insured or related to an insured;

3.

Prohibited Use. If a civil authority prohibits
you from use of the residence premises as a
result of direct damage to neighboring
premises by a Peril Insured Against in this
policy, we cover any resulting Additional Living
Expense and Fair Rental Value loss for a
period not exceeding two weeks during which
use is prohibited.

7.

property contained in an apartment regularly
rented or held for rental to others by any
insured;

8.

property rented or held for rental to others
away from the residence premises;

9.

business
merchandise.
Business
merchandise means merchandise in storage,
held as samples, for sale, or for delivery after
sale;

We do not cover loss or expense due to
cancellation of a lease or agreement.

10. film, discs, tapes, or media, including all types
of software, used for the recording or storage
of magnetic impulses, in excess of the cost of
replacing such media in blank or unexposed
form. However, we do cover the cost to
replace such media which may be replaced
with other of like kind and quality on the open
retail market. No coverage is provided for
business media away from the residence
premises; or

1. Debris Removal. We will pay the reasonable

ADDITIONAL COVERAGES
expense incurred by you in the removal of
debris of covered property provided coverage
is afforded for the peril causing the loss.
Debris removal expense is included in the
limit of liability applying to the damaged
property. We will also pay up to $500 in the
aggregate for anyone loss for reasonable
expenses incurred by you in removing any
fallen trees from the residence premises if:
a.
b.

11. books

of
account,
filing
systems,
transcriptions, or any other records in excess
of the cost of replacing such records in blank
or unexposed form.

c.

the tree damages covered property;
the falling of the tree is caused by a Peril
Insured Against under Coverage C; and
this coverage is not provided elsewhere in
this policy.

Debris Removal does not apply to costs to:

COVERAGE D - LOSS OF USE

a.

Subject to a monthly maximum of 2% of the
Coverage A limit of liability, the limit of liability
shown in the Declarations for Coverage D is the
total limit for all the following coverages:

b.

extract pollutants from land, air, or water;
or
remove, restore, or replace land, air, or
water which contains pollutants.

2.
1.

2.

Reasonable Repairs.
We will pay the
reasonable cost incurred by you for necessary
repairs made solely to protect covered
property from further damage if a Peril Insured
Against causes the loss. This coverage does
not increase the limit of liability applying to
the property being repaired.

3.

Additional Living Expense. If a 1055 covered
under this Section makes the residence
premises uninhabitable, we cover any
necessary increase in living expenses
incurred by you so that your household can
maintain its normal standard of living for up to
24 months. Payment shall be for the shortest
time required to repair or replace the
premises; or, if you permanently relocate, the
shortest time required for your household to
settle elsewhere. This period of time is not
limited by expiration of this policy.

Trees, Shrubs, and Other Plants. We cover
trees, shrubs, plants, or lawns on the
residence premises, for loss caused by the
following Perils: Fire or lightning, Explosion,
Riot or civil commotion, Aircraft, Vehicles not
owned or operated by a resident of the

residence premises, Vandalism or malicious
mischief, or Theft. The total limit of liability
for this coverage shall not exceed 5% of the
Coverage A policy limit for all trees, shrubs,
plants, and lawns nor more than $500 for any
one tree, shrub, or plant including removal
expense. In no event do we cover property
grown for business purposes.

Fair Rental Value. If a loss covered under
this Section makes that part of the residence
premises rented to others or held for rental by
you uninhabitable, we cover its fair rental
value. Payment shall be for the shortest time
required to repair or replace the part of the
premises rented or held for rental, but not to
exceed 24 months. This period of time is not
limited by expiration of this policy. Fair rental

4

SH-3.41 (6-06)

4.

5.

6.

a.

Fire Department Service Charge. We will
pay up to $500 for your liability assumed by
contract or agreement for fire department
charges incurred when the fire department is
called to save or protect covered property
from a Peril Insured Against. No deductible
applies to this coverage.

b.

Property Removed. Covered property while
being removed from a premises endangered
by a Peril Insured Against and for not more
than 30 days while removed is covered for
direct loss from any cause. This coverage
does not change the limit of liability applying
to the property being removed.

c.

Credit Card, Fund Transfer Card, Forgery,
and C~unterfeit Money. We will pay up to
$1,000 for:
a.

b.
c.

d.

the legal obligation of any insured to pay
because of the theft or unauthorized use
of credit cards or fund transfer cards
issued to or registered in any insured's
name. We do not cover use by a resident
of your household, a person who has
been entrusted with the credit card or fund
transfer card, or any person if any insured
has not complied with all terms and
conditions under which the credit card or
fund transfer card is issued;
loss to any insured caused by forgery or
alteration of any check or negotiable
instrument; and
loss to any insured through acceptance in
good faith of counterfeit United States or
Canadian paper currency.

e.
f.

Perils Insured Against in Coverage C Personal Property. These perils apply to
covered building and personal property for
loss insured by this additional coverage;
decay within the building or structure that
is hidden from view, unless the presence
of such decay is known to an insured
prior to collapse. This additional coverage
does not include any coverage for the
sinking, shifting, or compaction of soil, fill
material, or organic matter;
insect or vermin damage within the
building or structure that is hidden from
view, unless the presence of such
damage is known to an insured prior to
collapse. This additional coverage does
not include any coverage for sinking,
shifting, or compaction of soil, fill !"]1aterial,
or organic matter;
weight of contents, equipment, animals, or
people;
weight of rain, ice, or snow, which collects
on a roof; or
use of defective material or methods in
construction, remodeling, or renovation if
the collapse occurs during the course of
the
construction,
remodeling,
or
renovation.

Loss to an awning, fence, patio, pavement,
swimming pool, underground pipe, flue, drain,
cesspool, septic tank, foundation, retaining
wall, bulkhead, pier, wharf, or dock is not
included under items b., c., d., e., and f. unless
the loss is a direct result of the collapse of a
building.
Collapse is defined as 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 occupied for its
intended purpose.

We do not cover loss arising out of business
pursuits or dishonesty of any insured. No
deductible applies to this coverage.
Defense:

Collapse does not include settling, cracking,
shrinking, bulging, expansion, earth sinking, or
compaction of soil, fill material, or organic
matter.

a.

We may make any investigation and settle
any claim or suit that we decide is
appropriate. Our obligation to defend any
claim or suit ends when the amount we
pay for the loss equals our limit of
liability.
b. If a claim is made or a suit is brought
against any insured for liability under the
Credit Card coverage, we will provide a
defense at our expense by counsel of our
choice.
c. We have the option to defend at our
expense any insured or any insured's
bank against any suit for the enforcement
of payment under the Forgery coverage.
7.

Collapse does not include any building or any
part of a building that remains standing, even
if it is in danger of falling down or caving in, or
even if it has separated from another building.
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 evidence of cracking,
bulging, sagging, bending, leaning, settling,
shrinkage or expansion.
This coverage does not increase the limit of
liability applying to the damaged covered
property.

Collapse. We insure for risk of direct physical
loss to covered property involving collapse of
a building or any part of a building caused only
by one or more of the following:

SH-3.41 (6-06)

5

8.

Loss Assessment. We will pay up to $1,000
for your share of any loss assessment
charged during the policy period against you
by a corporation or association of property
owners.

We insure for risks of accidental direct physical
loss to the property described in Coverages A and
B except:

1.
2.

This coverage applies only when the
assessment is made as a result of a direct
loss to the property, owned by all members
collectively, caused by a Peril Insured Against
under Coverage A - Dwelling. This coverage
applies only to loss assessments charged
against you as owner or tenant of the
residence premises. This coverage does not
apply if:
the direct loss is due to an earthquake,
land shock waves, or tremors before,
during, or after a volcanic eruption; or
b.· the: loss assessment is charged against
you, a corporation, or association of
property owners by any governmental
body.

collapse other than as provided in Additional
Coverages, item 7. Collapse:
freezing of a plumbing, heating, air
conditioning or automatic fire protective
sprinkler system or of a household appliance,
or by discharge, leakage, or overflow from
within the system or appliance, caused by
freezing. This exclusion applies only while the
dwelling is vacant, unoccupied, or being
constructed unless you have used reasonable
care to:

a.

a.
b.

maintain heat in the building; or
shut off the water supply and drain the
system and appliances of water;;

3.

freezing, thawing, pressure, or weight of water
or ice, whether driven by wind or not, to a
fence, pavement, patio, swimming pool,
foundation, retaining wall, bulkhead, pier,
wharf, or dock;

Volcanic Eruption. We cover direct loss to a
building or property contained in a building
resulting from the eruption of a volcano when
the direct loss is caused by:

4.

theft in or to a dwelling under construction, or
of materials and supplies for use in the
construction until the dwelling is completed
and occupied;

a.
b.
c.

5. vandalism and malicious mischief or breakage

The limit of $1 ,000 is the most we will pay with
respect to anyone loss, regardless of the
number of assessments.

9.

volcanic blast or airborne shock waves;
ash, dust, or particulate matter; or
lava flow.

of glass and safety glazing materials if the
dwelling has been vacant for more than 30
consecutive days immediately before the loss.
Vacant means empty or without contents
pertaining to the usual activities customary to
the occupancy of the dwelling. A dwelling
being constructed is not considered vacant;

We will pay for the removal of only the ash,
dust, or particulate matter which has caused
direct loss to a building or property contained
in a building. One or more volcanic eruptions
that occur within a 72-hour period shall be
considered one volcanic eruption.

6.

7.

10. Inflation Guard Coverage. Each year on the
anniversary of this policy, the Coverage A Dwelling amount may be increased depending
on a residential building cost index for your
area. The limits of liability for Coverage B Other Structures, Coverage C - Personal
Property, and Coverage D - Loss of Use are
increased at the same percentage as
Coverage A.

continuous or repeated seepage or leakage of
water or steam, unless sudden and accidental,
from within a plumbing, heating, air
conditioning, or automatic fire protective
sprinkler system, water bed, or from 'Within a
household appliance;

a. wear and tear, marring, deterioration;
b. inherent vice, latent defect, mechanical
c.
d.
e.

f.

SECTION I - PERILS
INSURED AGAINST

g.

COVERAGE A - DWELLING AND
COVERAGE B - OTHER STRUCTURES

6

breakdown;
smog, rust, mold, or wet or dry rot;
smoke from agricultural smudging
industrial operations;
pollution or contamination;

or

settling, cracking, shrinking, bulging, or
expansion
of
pavements,
patios,
foundations, walls, floors, roofs, or
ceilings; or
birds, vermin, rodents, insects, or
domestic animals.

SH-3.41 (6-06)

7.

If any of these cause water damage, not
otherwise excluded, from a plumbing, heating,
air conditioning, or automatic fire protective
sprinkler system or household appliance, we
cover loss caused by the water, including the
cost of tearing out and replacing any part of a
building necessary to repair the system or
appliance. We do not cover loss to the
system or appliance from which this water
escaped;
8.

Smoke, meaning sudden
damage from smoke.

and

accidental

This peril does not include loss caused by
smoke from agricultural smudging or industrial
operations.
8.
9.

cosmetic loss or damage to metal roof
coverings caused by the peril of hail.

Vandalism or malicious mischief.
Theft, including attempted theft and loss of
property from a known location when it is likely
that the property has been stolen. Theft does
not include:

Cosmetic loss or damage means only that
damage that alters the physical appearance of
the roof covering, but does not result in failure
of the roof covering to perform its intended
function or damage that allows the penetration
of water through the roof covering.

b.

We do cover hail damage to the roof
coverings that results in damage that will allow
the penetration of water through the roof
covering or that results in the failure of the roof
covering to perform its intended function.

This peril does not include loss caused by
theft:

a.

a.

Roof covering means the roofing material
exposed to the weather, the underlayments
applied for moisture protection and all
flashings, vents and roof accessories required
in the replacement of a roof covering, with the
purpose of keeping out elements over an
extended period of time; and
9.

b.

c.

losses excluded under Section I - Exclusions.

CO\fERA(3E C - PERSONAL PROPERTY

a.
Fire or lightning.

2.

Windstorm or hail.
This peril does not
include loss to the 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 enters through this opening. This peril
includes loss to watercraft and their trailers,
furnishings, eqUipment, and outboard motors,
only while inside a fully enclosed building.

b.
c.

Explosion.

4.

Riot or civil commotion.

5.

Aircraft, including self-propelled missiles and
spacecraft.
Vehicles.
watercraft.

SH-3.41 (6-06)

This

peril

property while at any other residence
owned, rented to, or occupied by any
insured, except while' any insured is
temporarily residing there. Property of a
student who is an insured is covered
while at a residence away from home if
the student has been there at any time
during the 45 days immediately before the
loss;
watercraft
including
its furnishings,
equipment, and outboard motors; or
trailers and campers.

10. Falling objects. This peril does not include
loss to property contained in a building unless
the roof or an exterior wall of the building is
first damaged by a falling object. Damage to
the falling object itself is not included.

3.

6.

committed by an insured, or any person
regularly residing on the residence
premises;
in or to a dwelling under construction, or of
materials and supplies for use in the
until
the
dwelling
is
construction
completed and occupied; or
from any part of a residence premises
rented by an Insured to other than an
insured.

This peril does not include loss caused by
theft that occurs away from the r~sidence
premises of:

We insure for accidental, direct, physical loss to
property described in Coverage C caused by:
1.

loss of a precious or semiprecious stone
from its setting; or
loss sustained by any insured due to an
insufficient
funds
or
otherwise
nonredeemable check, draft, or medium of
exchange.

does

11. Weight of ice, snow, or sleet which causes
damage to property contained in a building.

not include

7

b.

12. Sudden and accidental discharge or
overflow of water or steam from within a
plumbing, heating, or air conditioning system
or from within a household appliance,
waterbed, or automatic fire protective sprinkler
system. This peril does not include loss:
a.
b.
c.

Earth Movement, meaning any loss
caused by, resulting from, contributed to,
or aggravated by:
earthquake, including land shock
waves or tremors, before, during, or
after volcanic eruption;
(2) landslide or mudflow;
(3) earth sinking, rising, or shifting; or
(4) settlement or subsidence due to the
sinking, shifting or compaction of soil,
fill material, or organic matter.
(1)

to the appliance from which the water or
steam escaped;
caused by or resulting from freezing; or
to the waterbed from which water escaped
unless loss was from an insured peril.

13. Sudden and accidental tearing asunder,

Earth movement also means volcanic
eruption, explosion, or effusion, except as
provided in Additional Coverages for
Volcanic Eruption.

cracking, burning, or bulging of a steam or
hot water heating system, an air conditioning,
or automatic fire protective sprinkler system,
or an appliance for heating water. We do not
cover loss caused by or resulting from
freezing under this peril.

We do cover direct loss caused by earth
movement for:

14. Freezing of a plumbing, heating, air
conditioning, or automatic fire protective
sprinkler system or of a household appliance.
This peril does not include loss on the
residence premises while the dwelling is
unoccupied, unless you have used reasonable
care to:

(1) fire;
(2) explosion other than the explosion of
a volcano;
(3) breakage of glass or safety glazing
material which is part of a building,
storm door, or storm window; or
(4) theft.

a.
b.

c.

maintain heat in the building; or
shut off the water supply and drain the
system and appliances of water.

Water Damage, meaning:
(1) flood, surface water, waves, tidal
water, overflow of a body of water, or
spray from any of these, whether or
not driven by wind;
(2) water which backs up through sewers,
drains, sump pumps, sump pump
wells, or similar systems;
(3) water below the surface of the ground,
including water which exerts pressure
on, or seeps or leaks through a
building,
sidewalk,
driveway,
foundation, swimming pool, or other
structure.

15. Sudden
and
accidental
damage to
electrical appliances, devices, fixtures, and
wiring from an increase or decrease of
electrical currents artificially generated. There
is no coverage for loss to a tube, transistor,
wafer, card, chip, integrated circuit, or similar
electronic circuitry and components.
16. Breakage of glass, meaning damages to
personal property caused by breakage of
glass which is a part of the building on the
residence premises. There is no coverage
for los~ or damage to the glass.

Direct loss by fire, explosion, or theft
resulting from water damage is coyered.
d.

Power
interruption,
meaning
the
interruption of power or other utility service
if the interruption takes place away from
If a Peril
the residence premises.
Insured Against ensues on the residence
premises, we will pay only for loss
caused by the ensuing peril.
e. Neglect, meaning 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 by
a Peril Insured Against.

SECTION I - EXCLUSIONS
1.

We do not insure for loss caused directly or
indirectly by any of the following. Such loss is
excluded regardless of any other cause or
event contributing concurrently or in any
sequence to the loss.
a.

Ordinance or Law, meaning enforcement
of any ordinance or law regulating the
construction, repair, or demolition of a
building or other structure, unless
specifically provided under this policy.

8

SH-3.41 (6-06)

(4) the furnishing of work, materials,
parts, or equipment in connection with
any of such property or facilities; or
(5) the maintenance of any of such
property or facilities.

f.

War, including undeclared war, civil war,
insurrection. rebellion, revolution, warlike
act by a military force or military
personnel, destruction or seizure or use
for a military purpose, and including any
consequence of any of these. Discharge
of a nuclear weapon shall be deemed a
warlike act even if accidental.
g. Nuclear Hazard, to the extent set forth in
the Nuclear Hazard Clause of Section I Conditions.
h. Intentional Loss. We do not provide
coverage for a person who is insured
under this policy if that person commits or
directs an act with the intent to cause a
loss.
i. Transit
of
Structures,
meaning
preparation for transit or transit of the
dwelling, any other structures, or any part
of any other building under Coverage A
and Coverage B while on or away from
the grounds which are part of the
residence premises shown in the
Declarations.

2.

All whether on or away from the insured
premises or property insured or covered
by this policy.

3. We do not insure for loss or the remediation of
loss to property described in Section I - Perils
Insured Against, Coverage A - Dwelling,
Coverage
B
Other Structures,
or
Coverage C - Personal Property arising out of,
caused by, contributed to, aggravated by or
resulting from (whether directly or indirectly):
a.
b.

c.

We do not insure for loss to property
described in Coverages A and B caused by
any of the following. However, any ensuing
loss to property described in Coverages A and
B not, excluded or excepted in this policy is
covered.
a.

b.
c.

d.
e.
f.
g.
h.

This exclusion applies regardless of whether
the causes or conditions listed in a. through h.
ensue from, arise out of or are a result of any
other cause of loss.

Weather conditions. This exclusion only
applies if weather conditions contribute in
any way with a cause or event excluded in
paragraph 1. above to produce the loss;
Acts or DeciSions, including the failure to
act or decide, of any person, group,
organization, or governmental body;
Planning,
Standards,
Design,
Construction, or Maintenance.
This
means any acts, errors, or omissions
(whether by the insured or others) in:

Remediation, as used in this exclusion, means
the cost to test for, measure, detect or
evaluate any of the causes or conditions listed
in a. through h., as well as the cost to treat,
contain. remove or dispose of any of the
same, beyond or in addition to that which is
required to physically repair or replace
otherwise covered property.

(1) planning,
zoning,
development
surveying, or siting;
(2) establishing or enforcing building
codes or standards for construction of
materials;
(3) the
design,
specifications,
or
'construction of the following property
or facilities:

This exclusion also applies to any claim for
loss of use or fair rental value of the described
property under Section I - Coverages.
Coverage D - Loss of Use.

SECTION 1- CONDITIONS

(a) buildings or structures;
(b) improvements or changes in or
additions to land or other property;
or
(c) roads, water mains, sewers,
drainage systems, levees, dams,
or other facilities;

1. Insurable Interest and limit of liability.
Even if more than one person has an
insurable interest in the property covered, we
shall not be liable:
a.

b.
SH-3.41 (6-06)

fungus;
rust,
corrosion,
wear
and
tear,
deterioration or other characteristic or
quality in the property that causes it to
degenerate, damage, destroy or consume
itself;
condensation, dampness of atmosphere.
extremes of temperature;
pollution or contamination;
smog, smoke from agricultural smudging
or industrial operations;
rats, mice, rodents. vermin;
termites, moths or other insects; or
birds or domestic animals.
'

9

to the insured for an amount greater than
the insured's interest at the time of loss;
nor
for more than the applicable limit of
liability.

3.

2. Your Duties After loss. In case of a loss to
which this insurance may apply, you shall see
that the following duties are performed:

loss Settlement. Covered property losses
are settled as follows:
a.

a.

give immediate notice to us or our agent,
and in case of theft also to the police. In
case of loss under the Credit Card or
Fund Transfer Card coverage also notify
the credit card or fund transfer card
company;
b. protect the property from further damage,
make reasonable and necessary repairs
required to protect the property, and keep
an accurate record of repair costs;
c.. prepare an inventory of damaged personal
property showing in detail, the quantity,
description, actual cash value, and
amount of loss. Attach to the inventory all
bills, receipts, and related documents that
substantiate the figures in the inventory;
d. as often as we reasonably require:

(1) personal property;
(2) structures that are not buildings; and
(3) all antennas, carpeting, awnings,
domestic appliances, and outdoor
equipment, whether or not attached to
buildings.
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
the 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 applicable limit of liability of the
policy.

(1) exhibit the damaged property;
(2) provide
us
with
records
and
documents we request and permit us
to make copies;
(3) let us record your statements and
submit to examinations under oath by
any person named by us and sign the
transcript of the examination; and
(4) produce employees, members of the
insured's household, or others for
examination under oath to the extent it
is within the insured's power to do so;
and
e.

Losses to the following types of property
will be settled at the actual cash value of
the damaged property at the time of the
loss:

b.

Buildings under Coverage A or B will be
settled at replacement cost without
deduction for depreciation, subject to the
following:
(1) We will pay
replacement
depreciation,
smaller of the

submit to us, within 60 days after we
request, your signed, sworn proof of loss
which sets forth, to the best of your
kriqwledge and belief;

the cost of repair or
without deduction for
but not exceeding the
following amounts:

(a) the limit of liability under this
policy applying to the building;
(b) the replacement cost of that part
of the building damaged for
equivalent construction and use
on the same premises;
(c) the
amount
actually
and
necessarily spent to repair or
replace the damaged building; or
(d) the replacement cost of your
home or any part as described in
Declarations - Page 2, Description
of Your House.

(1) the time and cause of loss;
(2) interest of the insured and all others
in the property involved and all
encumbrances 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
any
damaged
building and detailed estimates for
repair of the damage;
(6) an inventory of damaged personal
property described in 2c;
(7) receipts for additional living expenses
incurred and records supporting the
fair rental value loss; and
(8) evidence or affidavit supporting a
claim under the Credit Card, Fund
Transfer
Card,
Forgery,
and
Counterfeit Money coverage, stating
the amount and cause of loss.

(2) We will pay the actual cash value of
the damage, not to exceed the
applicable limit of liability, until
actual repair or replacement is
completed.

10

1

SH-3.4 1 (6-06)

7.

(3) You may disregard the replacement
cost loss settlement provisions and
make claim under the policy for loss or
damage to buildings on an actual
cash value basis and then make
claim within 180 days after loss for
any
additional
liability
on
a
replacement cost basis.
c.

Other Insurance. If a loss covered by this
policy is also covered by other insurance, 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.

8. Suit Against Us. No action shall be brought
unless there has been compliance with the
policy provisions and the action is started
within one year after the occurrence causing
loss or damage.

b.

6.

10. Loss Payment. We will adjust all losses with

repair or replace any part to restore the
pair or set to its value before the loss; or
pay the difference between actual cash
value of the property before and after the
loss.

a.
b.
c.

agreement between you and us;
a court judgment; or
an appraisal award.

11. Abandonment of Property.

Glass Replacement. Loss for damage to
glass caused by a Peril Insured Against shall
be settled on the basis of replacement with
safety glazing materials when required by
ordinance or law.

accept any
insured.

We need not
property abandoned by any

12. Recovered Property. if property for which we
have made payment is recovered by you or
us, you or we will notify the other of the
recovery. You will have the option of keeping
the property or having it become our property.
If you keep the property, you will repay the
amount you received for that property.

Appraisal. If you and we fail to agree on the
amount of loss, either one can demand that
the amount of the loss be set by appraisal. If
either makes a written demand for appraisal,
each shall 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 shall
then select a competent impartial umpire. If
the two appraisers are unable to agree upon
an umpire within 15 days, you or we can ask a
judge of a court of record in the state where
the residence premises is located to select
an umpire. The appraisers shall then set the
amount of the loss. If the appraisers submit a
written report of an agreement to us, the
amount agreed upon shall be the amount of
the loss. If the appraisers fail to agree within a
reasonable time, they shalf submit their
differences to the umpire. Written agreement
signed by any two of these three shall set the
amount of the loss. Each appraiser shall be
paid by the party selecting that appraiser.
Other expenses of the appraisal and the
compensation of the umpire shall be paid
equally by you and us.

SH-3.41 (6-06)

Our Option. We may make a cash settlement
and take all or part of the damaged property at
its appraised or agreed upon value, or repair
or replace the damaged property with property
of like kind and quality.
you and pay you unless some other person is
named in the policy or is legally entitled to
receive payment. We will pay within 60 days
after we receive your proof of loss and the
amount of loss is finally determined by:

Loss to a Pair or Set. In case of loss to a
pair or set we may elect to:
8.

5.

9.

If the description, provided by you, of your
house is incomplete or inaccurate, any
difference
between
the
description
provided and the actual home will not be
covered.
4.

When Declarations - Page 2, Description
of Your House is part of your policy, our
payment for loss is limited to the
replacement cost of your house as
described on Declarations - Page 2.

13. Mortgage Clause.

The word "mortgagee"
includes trustee. If a mortgagee is named in
this policy, any loss payable under Coverages
A or B shall be paid to the mortgagee and you,
as interests appear.
If more than one
mortgagee is named, the order of payment
shall be the same as the order or precedence
of the mortgages. If we deny your claim, that
denial shall not apply to a valid claim of the
mortgagee, jf the mortgagee:

a.

b.

11

notifies us of any change in ownership or
occupancy, or substantial change in risk of
which the mortgagee is aware;
pays any premium due under this policy
on demand if you have neglected to pay
the premium; and

c.

property damage to which this coverage applies,
we will:

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.

a.
b.

If the pQlicy is cancelled by us, the mortgagee
shall be notified at least ten days before the
date cancellation takes effect.
If we pay the mortgagee for any loss and deny
payment to you:

COVERAGE F OTHERS

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 shall receive a full
assignment and transfer of the mortgage
and all securities held as collateral to the
mortgage debt.
Subrogation shall not
impair the right of the mortgagee to
recover the full amount of the mortgagee's
claim.

b.

c.

MEDICAL PAYMENTS TO

We will pay the necessary medical expenses
incurred or medically ascertained within three
years from the date of an accident causing bodily
injury.
Medical expenses mean reasonable
charges for medical, surgical, x-ray, dental,
ambulance,
hospital,
professional
nursing,
prosthetic devices, and funeral services.
This coverage does not apply to you or regular
residents of your household other than residence
employees. As to others. this coverage applies
only:

14. No Benefit to Bailee. We will not recognize
any assignment or grant any coverage for the
benefit of any person or organization holding,
storing. or transporting property for a fee
regardless of any other provision of this policy.
.
,
15. Nuclear Hazard Clause.

a.

pay up to our limit of liability for the damages
for which the insured is legally liable; and
provide a defense at our expense by counsel
of our choice.
We may make any
investigation and settle any claim or suit that
we decide is appropriate. Our obligation to
defend any claim or suit ends wh~n the
amount we pay for damages resulting from the
occurrence equalS our limit of liability.

a.
b.

to a person on the insured location with the
permission of any insured; or
to a person off the insured location, if the
bodily injury:
(1) arises out of a condition in the insured
location or the ways immediately
adjoining;
(2) is caused by the activities of any insured;
(3) is caused by a residence employee in
the course of the residence employee's
employment by any insured; or
(4) is caused by an animal owned by or in the
care of any insured.

"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 shall
not be considered loss caused by fire,
explosion, or smoke, whether these perils
are specifically named in or otherwise
included within the Perils Insured Against
in Section I.
This policy does not apply under Section I
to loss caused directly or indirectly by
nuclear hazard. except that direct loss by
fire resulting from the nuclear hazard is
covered.

SECTION II - EXCLUSIONS
1.

Coverage E - Personal Liability and
Coverage F - Medical Payments to Others
do not apply to bodily injury or property
damage:
a.

which is expected or intended by any

insured even if the actual injury or

SECTION II - LIABILITY
COVERAGES

b.

COVERAGE E - PERSONAL LIABILITY
If a claim is made or a suit is brought against any
insured for damages because of bodily injury or

12

damage is different than expected or
intended;
ariSing out of business pursuits of any
insured or the rental or holding for rental
of any part of any premises ,by an
insured.

SH-3.41 (6-06)

i.

This exclusion does not apply to:
(1) activities which are ordinarily incident
to non-business pursuits;
(2) the rental or holding for rental of a
residence of yours:

(1) owned by or rented to any insured if
the watercraft has inboard or
inboard-outboard motor power of
more than 50 horsepower or is a
sailing vessel, with or without auxiliary
power, 26 feet or more in' overall
iength;
(2) powered by one or more outboard
motors with more than 25 total
horsepower, owned by any insured;
or
(3) designated as an airboat, air cushion,
jet ski, or similar type of craft.

, (a) on an occasional basis for the
exclusive use as a residence;
(b) in part, unless intended for use as
a residence by more than two
roomers or boarders; or
(c) in part, as an office, school,
studio, or private garage; or
(3) Coverage E to the occasional
part-time business pursuits of an
,insured who is 19 years of age or
younger;

This exclusion does not apply while the
watercraft is stored;

c.

arising out of the transmission of a
communicable disease by any insured;
d. which results from sexual misconduct,
whether any insured participated in
committing any sexual misconduct or
remained passive after having knowledge
of any sexual misconduct.
Sexual
misconduct means physical or mental
harassment or assault of a sexual nature
against any person;
e. arising out of any act or omission of any
insured as an officer or member of the
board of directors of any corporation or
other organization, except the acts of an
unpaid volunteer, director, officer, or
trustee of a religious, charitable, or
nonprofit organization;
f. arising out of the rendering or failing to
render professional services;
g. arising out of any premises owned by or
rented to any insured which is not an
insured location;
h. arising out of the ownership, maintenance,
use; loading, or unloading of motor
vehicles or all other motorized land
conveyances, including any attached
trailers, owned or operated by or rented or
loaned to any insured.

j.

arising out of the ownership, maintenance,
use, loading, or unloading of an aircraft,
meaning any contrivance used or
designed for navigation of or flight in the
air, except model aircraft of the hobby
variety not used or designated for the
transportation of people or cargo;

k.

arising out of the entrustment by any
insured to any person any of the
following:
(1) an aircraft;
(2) a watercraft; or
,
(3) a motor vehicle or any other
motorized land conveyance;

I.

arising out of statutorily imposed vicarious
parental liability for the actions of a child
or minor using:
(1) an aircraft;
(2) a watercraft; or
(3) a motor vehicle or any
motorized land conveyance;

other

m. caused directly or indirectly by war,
including undeclared war, civil war,
insurrection, rebellion, revolution, warlike
act by a military force or military
personnel, destruction or seizure or use
for a military purpose, and including any
consequence of any of these. Discharge
of a nuclear weapon shall be deemed a
warlike act even if accidental;

This exclusion does not apply to a
motorized land conveyance designed for
assisting the handicapped or for the
maintenance of an insured location, or a
motorized golf cart while used for golfing
purposes, including travel to and from a
golf course which is:

n.

(1) not designed for travel on public
,roads; and
(2) not subject to motor vehicle
registration;

SH-3.41 (6-06)

arising out of the ownership, maintenance,
use, loading, or unloading of a watercraft:

arising out of the actual, al/eged, or
threatened discharge, dispersal, seepage,
migration,
release,
or escape
of
pollutants.
This exclusion
imposed by law;

13

includes

any

liability

o.

2.

caused by pOisoning which includes but is
not limited to:
(1 ) 'the eating of paint that has lead or
lead compounds in it;
(2) the inhalation of paint that has lead or
lead compounds in it; or
(3) effects of radon or any other
substance that emits radiation.

This exclusion
imposed by law;
p.
q.

includes

any

Coverage E - Personal Liability does not
apply to:
a.

liability:
(1) for your share of any loss assessment
charged against all members of an
association of property owners; or
(2) under
any
other
contract
or
agreement except those written
contracts directly relating to the
maintenance of the insured 'location
not excluded in (1) above or
elsewhere in this policy;

liability

arising out of any criminal act committed
by or at the direction of any insu~ed; or
arising out of, caused by, contnbuted to,
aggravated by or resulting from (whether
directly or indirectly):

b.
c.

(1) fungus;
(2) rust, corrosion, wear and. ~ear,
deterioration or other characteristIc or
quality in the property that causes it to
degenerate, damage, destroy or
consume itself;
(3) condensation,
dampness
of
atmosphere, extremes of temperature;
or
(4) pollution or contamination.

d.

property damage to property owned by
the insured;
property damage to property rented to,
occupied, or used by or in the care of the
insured. This exclusion does not apply to
property damage caused by fire, smoke,
or explosion;
bodily injury to any person eligible to
receive any benefits:
(1) required to be provided; or
(2) voluntarily provided by the insured
under any:

This exclusion includes:

(a) workers'
or
workmen's
compensation law;
(b) nonoccupational disability law; or
(c) occupational disease law;

i.

the cost of testing, monitoring,
abating,
mitigating,
removing,
remediating or disposing of any of the
causes or conditions listed in items (1)
through (4) above;
ii.· any
supervision,
instruction,
disclosures, or failure to disclose,
or
recommendations,
warnings,
advice given, or which allegedly
should have been given, in connection
with bodily injury or property
damage arising out of, resulting from,
caused
by,
contributed to,
or
aggravated by, whether directly or
indirectly, any of the causes or
conditions listed in items (1) through
(4) above; and
iii. any obligation to share liability with or
repay damages to another who must
pay damages because of bodily
injury or property damage of the
type described in this exclusion.

e.

bodily injury or property damage for
which any insured under this policy is
also an insured under a nuclear energy
liability policy or would be an insured but
for its termination upon exhaustion of its
limit of liability.
A nuclear energy liability policy is a policy
issued by:
(1) American Nuclear Insurers;
(2) Mutual
Atomic
Energy
Liability
Underwriters;
(3) Nuclear Insurance Association of
Canada; or
(4) any of their successors; or

f.

bodily injury to you and any insured
within the meaning of part a. or b. of
Definition 6. "insured";
g. punitive or exemplary damages;
h. liability imposed upon any insured by any
governmental authority resulting from,
conSisting of, arising out of or in any way
caused by:

This exclusion applies regardless of any
other cause that contributed directly or
indirectly, concurrently or in any sequence
to the bodily injury or property damage.
Exclusions g., h., i., j., and k. do not apply
to bodily injury to any residence
employee arising out of and in the course
of the residence employee's employment
by an insured.

(1) fungus;

14

SH-3.41 (6-06)

b.

(2) rust, corrosion, wear and tear,
deterioration or other characteristic or
quality in the property that causes it to
degenerate, damage, destroy or
consume itself;
(3) condensation,
dampness
of
atmosphere, extremes of temperature;
, or
(4) pollution or contamination; or
liability arising out of the sale or transfer of
real or personal property, including but not
limited to the following:

i.

c.
(1) known

or unknown property
structural defects;
(2) known or unknown defects
plumbing, heating, air conditioning
electrical systems;
(3) known or unknown soil conditions
drainage problems; or
(4) concealment or misrepresentation
any known defects.

3.

or
in
or
d.

or
of

Coverage F - Medical Payments to Others,
does not apply to bodily injury:
2.
a.

to a residence employee if it occurs off
the insured location and does not arise
out of or in the course of the residence
employee's employment by any insured;
b. to any person, eligible to receive any
benefits required to be provided or
voluntarily provided under any workers' or
workmen's
compensation,
nonoccupational disability, or occupational
disease law;
c. fror;n any nuclear reaction, radiation, or
radioactive contamination, all whether
controlled or uncontrolled or however
caused. or any consequence of any of
these; or
d. to a person other than a residence
employee of an insured, regularly
residing on any part of the insured
location.

a.
b.

c.

We will not pay for property damage:
(1) to property covered under Section I of
this policy;
(2) caused intentionally by any insured
who is 13 years of age or older;
(3) to property owned by or rented to any
insured, a tenant of any insured, or a
resident in your household; or
(4) arising out of:

(a) business pursuits;

(b) any act or omission in connection

liability:

with a premises owned, rented, or
controlled by any insured, other
than the insured iocation; or
(c) the ownership, maintenance, or
use of a motor vehicle, aircraft,
or watercraft.

Claim Expenses. We pay:
expenses incurred by us and costs taxed
against any insured in any suit we
defend;

SH-3.41 (6-06)

We will pay for property damage to
property of others caused by any insured.
We will pay the lesser of:
(1) replacement cost at the time of loss;
(2) full cost of repair; or
(3) $500 in anyone occurrence.

We cover the following in addition to the limits of

a.

First Aid Expenses. We will pay expenses
for first aid to others incurred by any insured
for bodily injury covered under this policy.
We will not pay for first aid to you or any other
insured.

3. Damage to Property of Others.

SECTION II - ADDITIONAL
COVERAGES

1.

to the extent herein provided, premiums
on appeal and attachment bonds required
in a suit we defend. We will not pay the
premium for an attachment bond that is
more than our limit of liability. On appeal
bonds, we will pay that part of the
premium that our Coverage E limit of
liability bears to the amount of th~ bond.
For example, if our applicable limit of
liability is $100,000 and the amount of the
bond is $1,000,000 we will pay 1I10th of
the premium. We have no duty to apply
for or furnish bonds;
reasonable expenses incurred by any
insured at our request, including actual
loss of earnings (but not loss of other
income) up to $200 per day for assisting
us in the investigation or defense of any
claim or suit; and
interest on the entire judgment which
accrues after entry of the judgment and
before we payor tender, or deposit in
court that part of the judgment which does
not exceed the limit of liability that
applies.

15

e.

SECTION II - CONDITIONS
1.

Limit of Liability. Regardless of the number
of insureds, claims made, or persons injured,
our total liability under Coverage E for all
damages resulting from anyone occurrence
shall not exceed the limit of liability for
Coverage E stated in the Declarations. All
bodily injury and property damage resulting
from anyone accident or from continuous or
repeated exposure to substantially the same
general conditions shall be considered to be
Our total
the result of one occurrence.
liability under Coverage F for all medical
expense payable for bodily injury to one
person as the result of one accident shall not
·exceed the limit of liability for Coverage F
stated in the Declarations.

f.

4.

b.

This insurance
applies separately to each insured. This
condition shall not increase our limit of
liability for anyone occurrence.

c.

Payment of Claim • Coverage F - Medical
Payments to Others. Payment under this
~overage is not an admission of liability by any
Insured or us.

6.

occurrence, the insured shall perform the
following duties that apply.
You shall
cooperate with us in seeing that these duties
are performed:

Sui~ Against Us. No action shall be brought
against us unless there has been compliance
with the policy provisions.

give written notice to us or our agent as
soon as practicable, which sets forth:

No one shall have any right to join us as a
party to any action against any insured.
Further, no action with respect to Coverage E
shall b~ brought against us until the obligation
?f the Insured has been determined by final
judgment or agreement signed by us.

(1) the identity of the policy and insured;
(2) reasonably available information on
the time, place, and circumstances of
the accident or occurrence; and
(3) names
and addresses of any
claimants and available witnesses;
b.
c.

7.

(4) securing and giving evidence and

~ankruptcy of any Insured. Bankruptcy or
Insolvency of any insured shall not relieve us
of any of our obligations under this policy.

8.

forward to us every notice, demand,
SlJmmonS, or other process relating to the
accident or occurrence;
at our request, assist in:
(1) making settlement;
(2), the enforcement of any right of
contribution or indemnity against any
person or organization who may be
liable to any insured;
(3) the conduct of suits and attend
hearings and trials; and

Other Insurance - Coverage E - Personal
Liability. This insurance is excess over any
other ~ollectible insurance. However, if the
other Insurance is specifically written as
excess insurance over this policy, the limits of
this policy apply first.

SECTION I AND SECTION II -

obtaining the attendance of witnesses;
d.

give us written proof of claim, under oath if
required, as soon as practicable;
execute authorization to allow us'to obtain
copies of medical reports and records;
and
the injured person shall submit to physical
examination by a physician selected by us
whe~ and as often as we reasonably
require.

5.

3. Duties After Loss. In case of an accident or

a.

Duties of an Injured Person - Coverage F Medical Payments to Others. The injured
person or someone acting on behalf of the
injured person shall:
a.

2. Severability of Insurance.

the insured shall not, except at the
insured's own cost, voluntarily make any
payment, assume any obligation, or incur
any expense other than for first aid to
others at the time of the bodily injury;
and
let us record your statements and submit
to examinations under oath by any person
named by us and sign the transcript of the
examination.

CONDITIONS

under the coverage - Damage to Property
of Others - submit to us within 60 days
after the loss, a sworn statement of loss
and exhibit the damaged property, if within
the insured's control;

1. Policy Peri.od. This policy applies only to loss
under Section I or bodily injury or property
damage under Section II, which occurs during
the policy period.

16

SH-3.41 (6-06)

2.

3.

4.

5.

c.

Concealment or Fraud. This entire policy
shall be void if, whether before or after a loss,
any ,insured has willfully concealed or
misrepresented
any
material
fact
or
circumstance concerning this insurance or the
subject thereof, or the interest of any insured
therein, or in case of any fraud or false
swearing by any insured relating thereto.

d.

LjberaUzation Clause.
If we adopt any
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.

6.

When this policy is cancelled, the
premium for the period from the date of
cancellation to the expiration date will be
refunded on a pro rata basis.
If the return premium is not refunded with
the notice of cancellation or when this
policy is returned to us, we will refund it
within a reasonable time after the date
cancellation takes effect.

Nonrenewal. We may elect not to renew this
policy. We may do so by delivery 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 shall be sufficient proof of
notice.

Waiver or Change of Policy Provisions. A
waiver or change of any provision of this
policy must be in writing by us to be valid. Our
request for an appraisal or examination shall
not waive any of our rights.

7. Assignment. Assignment of this policy shall

Cancellation.

8. Subrogation.

a.

b.

not be valid unless we give our written
consent.
Any 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.

You may cancel this policy at any time by
returning it to us or by notifying us in
writing of the date cancellation is to take
effect.
We may cancel this policy only for the
reasons stated in this condition by
notifying you in writing of the date
cancellation takes effect.

If an assignment is sought, any insured shall
sign and deliver all related papers and
cooperate with us in any reasonable manner.
Subrogation does not apply under Section II to
Medical Payments to Others or Damage to
Property of Others.

This cancellation notice may be delivered
to you or mailed to you at your mailing
address shown in the Declarations.
Proof of mailing shall be sufficient proof of
notice:

9.

(1) When you have not paid the premium,
whether payable to us or to our agent
or under any finance or credit plan, we
may cancel at any time by notifying
you at least ten 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 notifying you at least ten 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

there

has

been

a

a.

b.

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;
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
of
the
property
until
custody
appointment and qualification of a
legal representative.

material

misrepresentation of fact which if
known to us would have caused us
not to issue the policy or if 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.

SH-3.41 (6-06)

Death.
If any person named in the
Declarations or the spouse, if a resident of
the same household, dies:

17

c.

10. Continuous Renewal.
a.

b.

"Policy Term" in the Declarations is
amended to include the effective time of
this policy to be 12:01 a.m. Standard Time
at the residence premises on the dates
shown.
To the extent that coverage in this policy
replaces coverage in other policies
terminating noon Standard Time on the
inception date of this policy, coverage
under this policy shall not become
effective until such other coverage has
terminated.

d.

If we elect to continue this insurance, we
will renew this policy if you pay the
required renewal premium for each
successive policy period, subject to our
premiums, rules, and forms then in effect.
You must pay us prior to the end of the
current policy period or else this policy will
expire.
If a mortgagee is named in this policy, we
will continue this insurance for the
mortgagee's interest only for ten days
after written notice of termination to the
mortgagee and then this policy will
terminate.

IN WITNESS WHEREOF, this Company caused this policy to be signed by its President and Secretary, but if
required by state law, the policy shall not be valid unless countersigned by a duly authorized representative of
the Company.

Authorized Representative

18

SH-3.41 (6-06)

AMERICAN NATIONAL PROPERTY AND CASUALTY COMPANY
AMERICAN NATIONAL GENERAL INSURANCE COMPANY
SPECIAL PROTECTION PACKAGE
Silver Series
For an additional premium, we agree to amend your policy as follows:
I.

In SECTION I - COVERAGES, COVERAGE 0 - LOSS OF USE, item 1 and 2 are deleted and replaced
with the following:
1.

2.

II.

Additional Living Expense. If a loss covered under this Section makes the residence premises
uninhabitable, we cover any necessary increase in living expenses incurred by you so that your
household can maintain its normal standard of living for up to 36 months. Payment shall be for the
shortest time required to repair or replace the premises; or, if you permanently relocate, the shortest
time required for your household to settle elsewhere. This period of time is not limited by expiration
of this policy.
Fair Rental Value. If a loss covered under this Section makes that part of the residence premises
rented to others or held for rental by you uninhabitable, we cover its fair rental value. Payment shall
be for the shortest time required to repair or replace the part of the premises rented or held for rental,
but not to exceed 36 months. This period of time is not limited by expiration of this policy. Fair rental
val"le shall not include any expense that does not continue while that part of the residence pr~mises
rented or held for rental is uninhabitable.

SECTION 1- CONDITIONS
A.

Under item 3. Loss Settlement, paragraph b. is deleted and replaced with the following:
b.

Buildings under Coverage A will be settled at replacement cost without deduction for
depreciation, subject to the following:
(1) We will pay the cost of repair or replacement without deduction for depreciation, but not
exceeding the smallest of the following amounts:
(a) 125% of the limit of liability shown in the Declarations for Coverage A.
(b) the replacement cost of that part of the damage for equivalent construction and use on
the same premises;
(c) the amount actually and necessarily spent to repair or replace the damage; or
(d) the replacement cost of your home or any part as described in Declarations - Page 2,
Description of Your House.
The extension provided in (a), above, does not apply unless and until replacement takes
place on the same premises with a structure designed for the same use and occupancy.
Compliance with any applicable Valued Policy Statute will be limited to the limit of liability
shown in the Declarations .
.(2) We will pay the actual cash value of the damage not to exceed the applicable limit of
liability, until actual repair or replacement is completed.
(3) For replacement cost loss settlement provisions to apply, you must first make claim under the
policy for loss or damage on an actual cash value basis and then you must:
(a) complete repair or replacement of the damaged property; and
(b) make claim within 180 days from the date of payment of the actual cash value amount
for any additional liability on a replacement cost basis.
You agree to notify us within 90 days of the start of any new building or any additions or
remodeling of the dwelling which will increase the value of your dwelling by $5,000 or more, and
pay any resulting additional premium. If you fail to notify us within 90 days, our loss payment
shall not exceed the limit of liability applying to the dwelling.

SH-31410 (10-09)

1

B. Under item 3. Loss Settlement, paragraph d. is added as follows:
d.

Structures under Coverage B will be settled at replacement cost without deduction for
depreciation, subject to the following:
(1) We will pay the cost of repair or replacement without deduction for depreciation, but not
exceeding the smallest of the following amounts:
(a) the limit of liability shown in the Declarations for Coverage B;
(b) the replacement cost of that part of the damage for equivalent construction and use on
the same premises; or
(c) the amount actually and necessarily spent to repair or replace the damage.
(2) We will pay the actual cash value of the damage not to exceed the applicable limit of
liability, until actual repair or replacement is completed.
(3) For replacement cost loss settlement provisions to apply, you must first make claim under the
policy for loss or damage on an actual cash value basis and then you must:
(a) complete repair or replacement of the damaged property; and
(b) make claim within 180 days from the date of payment of the actual cash value amount
for any additional liability on a replacement cost basis.

III. Under Section I, the following limits of liability apply:

A. Coverage C - Personal Property limit is at least 75% of Coverage A, but no more than the amount
shown on the Declarations for Coverage C.
B. Coverage D - Loss of Use limit is at least 25% of Coverage A. but no more than the amount shown
on the Declarations for Coverage D.
IV. Special Protection Package and Ordinance or Law Coverage shall not increase the total amount we will
pay LInder Coverage A - Dwelling, for the cost of repair or replacement, beyond 125°1,0 of the
Coverage A - Dwelling limit of liability shown on the Declarations.
All other provisions of the policy apply.

SH-31410 (10-09)

2

AMERICAN NATIONAL PROPERTY AND CASUALTY COMPANY
TENNESSEE HOMEOWNERS AMENDATORY ENDORSEMENT
THIS ENDORSEMENT CHANGES YOUR POLICY. PLEASE READ IT CAREFULLY.
I.

As applies to all policy forms, the Common Cause of Loss Deductible provision under AGREEMENT is
deleted and replaced with the following:
Common Cause of Loss Deductible
If you incur loss to your property covered under this policy and any other covered property owned by you,
from a common cause of loss, we will apply only the highest applicable deductible to the aggregate
amount of property damages. If the covered property owned by you is a motor vehicle, the loss must be
covered under the motor vehicle's Coverage D - Comprehensive Coverage. Common cause of loss is
one occurrence which results in loss to more than one item of covered property owned by you. The
properties incurring loss by a common cause of loss must be covered by this policy and another policy
that includes a Common Cause of Loss Deductible provision which is issued by American National
Property And Casualty Company.
This provision does not apply if the common cause of loss results from the peril of earthquake.

II.

As applies to policy form SH-7.41, in SECTION I - COVERAGES, under PERSONAL PROPERTY
REPLACEMENT COST COVERAGE, item 2. is deleted and replaced with the following:
2.

Our limit of liability is the actual cash value of the item or items unless and until actual repair or
replacement is completed. You may elect to disregard this condition in making claim. Such election
shall not prejudice your right to make further claim within 180 days from the date of payment of the
actual cash value amount for any additional liability brought about by this policy condition.

III. As applies to policy form SH-3.41, in SECTION I - CONDITIONS, under item 3. loss Settlement, item
b.(3) is deleted and replaced with the following:
b.(3) For replacement cost loss settlement provisions to apply, you must first make claim under the policy
for loss or damage on an actual cash value basis and then you must:
(a) complete repair or replacement of the damaged property; and
(b)' make claim within 180 days from the date of payment of the actual cash value amount for any
additional liability on a replacement cost basis.
IV. As applies to policy form SH-6.41, in SECTION I - CONDITIONS, under item 3. Loss Settlement, item c.
is deleted and replaced with the following:
,
(c) For replacement cost loss settlement provisions to apply, you must first make claim under the policy
for loss or damage on an actual cash value basis and then you must:
(1) complete repair or replacement of the damaged property; and
(2) make claim within 180 days from the date of payment of the actual cash value amount for any
additional liability on a replacement cost basis.
V. As applies to policy form SH-7.41, in SECTION 1- CONDITIONS, under item 3. Loss Settlement, item a.
(3) is deleted and replaced with the following:
a.(3) For replacement cost loss settlement provisions to apply, you must first make claim under the policy
for loss or damage on an actual cash value basis and then you must
(1) complete repair or replacement of the damaged property; and
(2) make claim within 180 days from the date of payment of the actual cash vallie amount for any
additional liability on a replacement cost basis.
EXCEPT AS AMENDED BY THIS ENDORSEMENT, ALL OTHER TERMS AND CONDITIONS OF YOUR
POLICY CONTINUE TO APPLY.

SH-91109 (1-10)

AMERICAN NATIONAL PROPERTY AND CASUALTY COMPANY
AMERICAN NATIONAL GENERAL INSURANCE COMPANY
ORDINANCE OR LAW COVERAGE
For an additional premium, covered losses under Coverage A - Dwelling will be settled on the basis of any
ordinance or law that regulates construction, repair, or demolition at the time of loss settlement. The total
limit of liability for this coverage shall not exceed 25% of the Coverage A - Dwelling limit as shown on the
Declarations.
Special Conditions

1.

This co~erage only applies after the dwelling is damaged by a covered peril as provided in SECTION I of
the policy.
.

2.

This coverage applies only to repairs to the portion of the dwelling damaged by a covered peril, when the
total damage equals or exceeds 50% of the Coverage A limit. The calculation of total damage will not
consider any expenses necessary to comply with any ordinance or law regulating construction, repair, or
demolition of the building.

3.

Ordinance or Law coverage does not include:
a.
b.

4.

Any loss in value of property which results from the enforcement of any ordinance or law; or
any loss, expense or cost which results from the enforcement of any ordinance or law requiring any
insured or others to test for, monitor, remove, detoxify, clean up, treat, neutralize, or in any way
,
\
respond to or assess the effects of pollutants.

As it applies to your Elite Homeowners Policy, this coverage and Dwelling Replacement Cost Extension
coverage shall not increase the total amount we will pay under Coverage A - Dwelling for the cost of
repair or replacement beyond 125% of the Coverage A - Dwelling limit of liabiiity shown on the
Declarations.

5. As it applies to your Special Homeowners Policy, this coverage and Special Protection Package
Endorsement shall not increase the total amount we will pay under Coverage A - Dwelling for the cost of
repair or replacement beyond 125% of the Coverage A - Dwelling limit of liability shown on the
Declar<i\tions.

SH-91412 (4-06)

AMERICAN NATIONAL PROPERTY AND CASUALTY COMPANY
AMERICAN NATIONAL GENERAL INSURANCE COMPANY
EQUIPMENT BREAKDOWN COVERAGE
For an additional premium, we will provide the insurance described in this endorsement in compliance with all
applicable provisions of this policy. The most we will pay for loss, damage or expense under this
endorsement arising from anyone accident is $50,000. Coverage provided under this endorsement does
not increase any limit of liability under Section I.
ADDITIONAL DEFINITIONS USED IN THIS ENDORSEMENT ONLY
1. ·"Accident" means sudden and accidental:
a.
b.

mechanical or electrical breakdown; or
tearing apart, cracking, burning or bulging of a steam or hot water heating system, or an air
conditioning system;

that results in direct physical damage to covered equipment.
2.

"Covered equipment" means property covered under Coverage A - Dwelling or Coverage B - Other
Structures, and:
a.
b.

that generates, transmits or utilizes energy; or
which, during normal usage, operates under vacuum or pressure, other than the weight of its
contents.

Covered equipment, however, does not mean:
a.
b.
c.
d.
e.
f.

3.

structure or foundation;
insulating material;
sewer piping, buried vessels or piping, or piping forming a part of a fire protective sprinkler system;
water piping other than the following: boiler feed water piping, boiler condensate return piping or
water piping forming a part of a refrigerating or air conditioning system;
kitchen or laundry appliances, including but not limited to, refrigerator, dishwasher, oven, stove,
clothes washer or clothes dryer, unless permanently installed in the dwelling; or
electronic entertainment or computer equipment, including but not limited to, television or stereo
equipment, or any electronic component used with such electronic entertainment or computer
e{juipment.

"One accident" means: If an initial accident causes other accidents, all will be considered one
accident. All accidents that are the result of the same event will be considered one accident.

PROPERTY COVERAGES
1.

We will pay for direct physical damage to covered equipment that is the result of an accident.

2.

Spoilage
With respect to your refrigerated property, we will pay up to $500 for:
a.
b.

3.

physical damage due to spoilage that is the result of an accident;
any necessary expenses you incur to reduce the amount of loss under this coverage to the extent
that they do not exceed the amount of loss that otherwise would have been payable under this
coverage.

Loss of Use
Coverage for Additional Living Expense and Fair Rental Value, as provided under Coverage D - Loss of
Use, is extended to the coverage provided by this endorsement. Our limit of liability for Loss of Use as a
result of an accident covered under this endorsement is $200 per day for no more than 5 consecutive
days, up to a maximum of $1,000 per accident.

SH-91909 (5-06)

1

EXCLUSIONS
1.

We will not pay under this endorsement for loss, damage or expense caused by or resulting from
electrical power surge or brown out.

2.

We do not cover under this endorsement any property that is not covered equipment except for
refrigerated property to the extent it is covered under Spoilage.

LOSS SETTLEMENT
Our liability for loss to anyone item or items covered under this endorsement shall not exceed the smallest of
the following:
1. the full cost of repair at the time of the loss;
2. the full cost of replacement at the time of the loss
3. any special limit of liability described in this endorsement; or
4. $50,000.
However, if you replace with equipment that is better for the environment, safer or more efficient than the
equipment being replaced, we will pay your replacement cost not to exceed 125% of the cost to repair or
replace with a product of like kind and quality. This condition does not increase any of the applicable limits.
DEDUCTIBLE
A $500 deductible applies to this endorsement.
All other provisions of this policy apply.

SH-91909 (6-06)

2

AMERICAN NATIONAL PROPERTY AND CASUALTY COMPANY
AMERICAN NATIONAL GENERAL INSURANCE COMPANY
CONTENTS REPLACEMENT COST COVERAGE ENDORSEMENT
In consideration of an additional premium, coverage of this policy is extended to include the full cost of repair
or replacement without deduction for depreciation, subject to the conditions of this endorselTjent and
applicable to:
Coverage C - Unscheduled Personal Property including outdoor radio and television antennas,
carpeting, awnings, domestic appliances, and outdoor equipment.
Coverage provided by this endorsement is limited to the policy perils insured against.
Our liability for loss on anyone item or items covered hereunder shall not exceed the smallest of the following
amounts:
1.
2.
3.
4.
5.
6.

replacement cost at the time of loss;
the full cost of repair;
the Coverage C Limit of Liability;
any special limits of liability described in the policy;
the interest of the insured; or
the amount it would cost us to replace the item with a similar item of like kind and quality, using our
replacement facilities, within a reasonable time after the loss.

Our limit of liability is the actual cash value of the item or items unless and until actual repair or
replacement is completed. You may elect to disregard this condition in making claim. Such election shall not
prejudice your right to make further claim within 180 days after the date of payment of the actual cash value
amount for any additional liability brought about by this policy condition.
This endorsement does not apply:
1. to' any item or article of rarity or antiquity that cannot be replaced;
2. to any item or article not maintained in reasonable repair or average operating condition; or
3. any item or article that is obsolete or useless to the insured.
All other terms and conditions of this policy not in conflict herewith remain unchanged.

SH-9291 (10-09)

Exhibit B

Exhibit C