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6.3 Policy Definitions

Insured​

For purposes of a Homeowners policy, the term insured includes:

  • The named insured.
  • The named insured's spouse, provided the spouse is a resident of the named insured's household.
  • Other household residents who are:
    • Relatives of the named insured by blood, marriage, or adoption.
    • Under age 21 and in the care of an insured, such as a foster child.
  • A full-time student who lived in the named insured's household before moving away to attend school, provided the student is:
    • A relative of the named insured and under age 24; or
    • Under age 21 and in the care of an insured.

Under Section II—Liability Coverages, the definition of insured also includes:

  • For a motor vehicle to which the policy's liability coverage applies:
    • A person using the vehicle at an insured location with an insured's permission.
    • A person using the vehicle while employed by the named insured or a resident relative.
  • A person or organization that is legally responsible for an insured's covered animal or watercraft, unless:
    • The animal or watercraft is in that person's or organization's custody as part of a business; or
    • The person or organization has custody without the owner's permission.

An Insurance Story

Sofia, Liam, their children, and Liam's mother—who lives in their household—are all considered insureds under the Nelsons' HO–3 policy. Their neighbor, who regularly volunteers to walk the family's dog, may also qualify as an insured under Section II if the dog injures someone while in the neighbor's care.

The named insured is the individual identified on the policy's Declarations page and is generally the person who holds legal title to the insured property. When the property is owned by a trust, the trustee or trustees who occupy the insured dwelling are typically listed as the named insureds.

If the named insured or the named insured's spouse dies, coverage for the insured premises and property owned by the deceased continues for the benefit of the deceased person's legal representative.

Bodily Injury​

Bodily injury includes physical harm, sickness, or disease sustained by a person. It also includes any resulting medical care, loss of services—such as loss of consortium—and death.

Property Damage​

Property damage includes physical damage to or destruction of tangible property, as well as the loss of its use.

Residence Premises​

The residence premises is the one- to four-family dwelling in which the insured resides. It also includes the other structures and grounds located at that address. Under the HO–6 Unit-Owners Form, the residence premises is the condominium or cooperative unit occupied by the insured.

Insured Location​

For purposes of a Homeowners policy, an insured location includes:

  • The residence premises shown on the Declarations page.
  • Any other premises used by an insured as a residence, provided the premises is listed in the Declarations or acquired during the policy period.
  • Any premises used in connection with an insured residence, such as a boat slip.
  • A non-owned premises where an insured is temporarily residing, such as a hotel room or vacation rental.
  • Vacant land, other than farmland, owned by or rented to an insured.
  • Land owned by or rented to an insured on which a residence is being constructed for the insured.
  • An insured's individual or family cemetery plot or burial vault.
  • Any portion of a premises occasionally rented to an insured for a nonbusiness purpose, such as a banquet hall rented for a wedding reception.

Residence Employee​

A residence employee is an employee of an insured whose duties relate to the maintenance or use of the residence premises. This includes employees who perform household or domestic services, such as a gardener or nanny.

Note

The policy specifically uses the term residence employee for a worker who performs household or domestic duties. When the policy uses the term employee by itself, it refers to a business employee and does not include a residence employee.

Business​

For purposes of the policy, a business includes any trade, profession, occupation, or other activity performed on a full-time, part-time, or occasional basis for money or other compensation. However, the following activities are not considered a business:

  • A profession or activity that generated $2,000 or less during the 12 months before the policy period began
  • Volunteer activities
  • The exchange of home day care services
  • Home day care services provided to a relative of an insured

Deductible​

When a covered property loss occurs, the insured is responsible for paying the deductible shown on the Declarations page. The insurer then pays the portion of the covered loss that exceeds the deductible, subject to the applicable policy limit. Unless the policy states otherwise, the deductible applies to all covered property losses. The standard deductible is $250, although the insured may select a higher or lower deductible.

If more than one deductible applies to the same loss, only the highest applicable deductible will be used.