6.8 Selected Property Endorsements

When attached to the policy, the following endorsements modify only Section I of the Homeowners policy. These endorsements affect the property coverage provisions and do not change the liability coverages provided under Section II.

Mobile Home Endorsement

The Mobile Home Endorsement may be added to either a Broad Form (HO–2) or Special Form (HO–3) Homeowners policy. When this endorsement is attached, the definition of residence premises is revised to include the mobile home and any other structures owned or leased by the insured, as shown in the Declarations. The endorsement makes certain changes to Section I property coverages to reflect the mobile home exposure. However, Section II liability coverages remain unchanged.

Under the Mobile Home Endorsement, Coverage A applies to the mobile home and certain related property. Covered losses are settled on a replacement cost basis.

Coverage A includes:

• The mobile home located on the residence premises, when it is used primarily as a private residence;
• Structures and utility tanks that are permanently attached to the mobile home;
• Permanently installed property, such as floor coverings, appliances, dressers, and cabinets; and
• Materials and supplies located on or next to the residence premises that are intended for the construction, alteration, or repair of the mobile home or other covered structures.

Under the Mobile Home Endorsement, the Coverage B limit for other structures may not exceed 10% of the Coverage A limit. However, if 10% of the Coverage A limit is less than $2,000, the insurer must provide a minimum Coverage B limit of $2,000.

The Property Removed Additional Coverage applies when a mobile home is endangered by a peril insured against and must be moved to prevent damage. Under this coverage, the insurer will pay the reasonable expenses necessary to remove the mobile home and return it to the residence premises. Payment is limited to $500, and no deductible applies to this coverage.

Earthquake Endorsement

Earth movement is a common exclusion in property insurance policies, but some homeowners may need protection against earthquake-related losses. Coverage may be added by endorsement through the Earthquake Endorsement. This endorsement restores coverage for direct physical loss to covered property caused by an earthquake. Earthquake includes land shock waves or tremors that occur before, during, or after a volcanic eruption. For coverage purposes, one or more earthquake shocks that occur within a 72-hour period are treated as a single earthquake.

The Earthquake Endorsement does not provide coverage for all earthquake-related losses. Flood remains excluded, even when the flood is caused by an earthquake. The endorsement also excludes the cost of filling land. In addition, damage to exterior masonry veneer is excluded. Exterior masonry veneer includes non-load-bearing decorative materials, such as brick or stone facing. However, coverage for exterior masonry veneer may be added if the insured elects that option.

Earthquake coverage does not increase the policy's applicable limit of liability. Instead, any covered earthquake loss is paid within the existing policy limits. This endorsement also requires a separate deductible. The deductible is stated as a percentage of the greater of the Coverage A limit or the Coverage C limit. Regardless of the percentage used, the earthquake deductible must be at least $500.

Scheduled Personal Property Endorsement

Under Coverage C, certain categories of personal property are subject to special limits of insurance and may be covered only against a limited group of perils. This endorsement is used to increase the amount of insurance available for those categories and to broaden the causes of loss that apply to them. The categories of property that may be affected include:

Jewelry	Furs	Cameras
Musical instruments	Silverware and goldware	Golfer's equipment
Fine arts	Stamp and coin collections	Any other property named on the endorsement

Property that is specifically scheduled under this endorsement is covered by the endorsement itself, rather than under Coverage C. Scheduled property is usually covered on a worldwide basis; however, some insurers may restrict the coverage territory for fine arts to the United States and Canada. The Section I deductible does not apply to property scheduled under this endorsement.

Perils Insured Against and Exclusions

Coverage under this endorsement is provided on an open-perils basis, meaning the scheduled property is covered for direct physical loss unless the cause of loss is specifically excluded. Excluded causes of loss include wear and tear, deterioration, inherent vice, damage caused by insects or vermin, war, and nuclear hazard.

When fine arts are scheduled under this endorsement, certain exclusions apply. Coverage does not apply to loss caused by:

• The repair, restoration, or retouching process;
• Breakage of art glass windows, glassware, statues, marble, and similar fragile articles, unless the breakage is caused by:
  • Fire or lightning;
  • Explosion, aircraft, or collision;
  • Windstorm, earthquake, or flood;
  • Malicious damage or theft; or
  • Derailment or overturn of a conveyance; and
• Any cause of loss while the property is on exhibition at a fairground or other exposition.

When stamp or coin collections are scheduled under this endorsement, coverage does not apply to certain types of loss. Excluded losses include fading, creasing, scratching, and damage caused by an inherent defect in the property.

Special Provisions

When fine arts are scheduled under this endorsement, the insured agrees that the art objects will be handled by competent professional packers. Newly acquired fine arts are also covered on an actual cash value basis for up to 25% of the scheduled fine arts limit. To continue coverage beyond the automatic coverage period, the insured must report the newly acquired art objects to the insurer within 90 days of acquisition and pay any required additional premium.

For newly acquired jewelry, furs, cameras, and musical instruments, automatic coverage applies only if the insured already has scheduled coverage under the endorsement for that same class of property. Coverage for newly acquired items is limited to the lesser of:

• 25% of the amount of insurance scheduled for that class of property; or
• $10,000.

To continue coverage, the insured must report the newly acquired property to the insurer within 30 days of acquisition and pay any required additional premium.

Conditions

The amount of insurance shown for scheduled property is not reduced by a partial loss. However, if a scheduled article sustains a total loss, the amount of insurance for that article no longer applies after payment is made. When a total loss occurs, the insurer will either refund the unearned premium that applies to the lost article, or the insured may choose to apply that unearned premium toward coverage for a replacement article.

Fine arts are usually scheduled on an agreed value basis. Agreed value means the insurer and insured have accepted a specific value for the scheduled article before a loss occurs. If a covered loss occurs, the insurer pays the agreed value shown for that article, even when the loss affects only part of a pair or set. When payment is made and the article has not been lost or stolen, the insurer may require the insured to surrender the damaged article or the remaining part of the pair or set. At the insured's request, the insurer may sell the surrendered property back to the insured at a price agreed upon by both parties.

Some versions of this endorsement apply the agreed value loss settlement terms to all categories of scheduled property. However, the standard endorsement uses different loss settlement rules for property other than fine arts. For stamp and coin collections insured on a blanket limit basis, losses are paid at market value, but not more than $250 for any one article. For all other scheduled property, including stamp and coin collections insured with specific limits, losses are paid up to the property's actual cash value at the time of loss. Payment will not exceed the applicable limit of insurance or the amount for which the property could reasonably be repaired or replaced. A standard Pair or Set condition also applies to this property.

An Insurance Story

Sofia owns an expensive watch. Instead of relying on the limited protection provided under Coverage C, she may choose to schedule the watch under this endorsement.

Scheduling the watch is especially helpful because Coverage C contains a special limit for theft of jewelry and similar property. If the watch is stolen from Sofia's car while it is scheduled under this endorsement, the loss would be paid up to the watch's actual cash value, rather than being limited by the $1,500 Coverage C special limit for theft of watches and other jewelry.

The endorsement also provides broader protection because the watch is covered on an open-perils basis. For example, coverage may apply if the watch is accidentally trampled at a parade or dropped into a bathtub, unless a specific exclusion applies.

Personal Property Replacement Cost Endorsement

This endorsement changes the loss settlement basis for certain property from actual cash value to replacement cost. Replacement cost coverage may apply to:

• Personal property insured under Coverage C;
• Awnings, outdoor antennas, and outdoor equipment;
• Carpeting and household appliances; and
• Scheduled jewelry, furs, cameras, musical instruments, silverware, goldware, and golfer's equipment, including property scheduled under the Scheduled Personal Property Endorsement.

However, replacement cost coverage does not apply to scheduled property that is already subject to settlement on an agreed value basis.

Certain types of property are not eligible for replacement cost coverage under this endorsement. This includes fine arts, collector's items, articles that are in poor condition, and articles that are stored away and considered obsolete.

If the cost to repair or replace covered property exceeds $500, the insurer will initially pay the property's actual cash value. Replacement cost payment is not made until the damaged property has actually been repaired or replaced.

Ordinance or Law Increased Amount of Coverage Endorsement

In an unendorsed Homeowners policy, the Ordinance or Law Additional Coverage allows the insured to use up to 10% of the Coverage A limit for covered increased costs required by the enforcement of an ordinance or law. The Ordinance or Law Endorsement allows the insured to increase that amount. When the endorsement is added, the available limit is changed from the standard 10% to the percentage shown in the endorsement schedule.

Identity Fraud Expense Coverage

This endorsement adds Identity Fraud Expense Additional Coverage to Section I of the Homeowners policy. The coverage pays up to $15,000 for covered expenses the insured incurs as a direct result of any one identity fraud incident, as long as the identity fraud is discovered during the policy period. Identity fraud means knowingly transferring or using an insured's identification without lawful authority, with the intent to commit an unlawful activity or to help another person commit an unlawful activity.

Covered expenses under the Identity Fraud Expense Additional Coverage include reasonable costs the insured incurs because of a covered identity fraud incident. These expenses may include:

• Notary fees required to attest to the fraud;
• Certified mail costs to law enforcement agencies or credit agencies;
• Lost income;
• Loan application fees when the insured must reapply for loans;
• Long-distance telephone charges; and
• Reasonable attorney fees.

Coverage for lost income is limited to $200 per day, up to a maximum of $5,000.

This endorsement does not cover identity fraud that is connected to a business. It also does not cover expenses that result from acts committed by an insured. A $500 deductible applies to covered identity fraud expenses.

After a loss, the insured must provide documentation to support the claim for covered identity fraud expenses. This may include receipts, bills, and other records that show the expenses incurred. These supporting documents must be submitted within 60 days after the insurer requests them.