Property and Casualty Policy Provisions
Reading a homeowners policy
Standard forms: HO-3 (open peril on the dwelling, named peril on personal property) is the Florida workhorse; HO-4 renters; HO-6 condo; HO-5 open peril on both; HO-8 older homes. Coverage A is the dwelling, B other structures, C personal property, D loss of use; Section II adds E personal liability and F medical payments.
Conditions and limits that drive payment
Know the loss settlement clause (ACV versus replacement cost), the deductible applied per occurrence, the mortgagee/loss-payable clause (the lender is paid to the extent of its interest and gets notice of cancellation), duties after loss, appraisal for disputes over amount, salvage, pair and set, and additional coverages such as debris removal and trees and shrubs (commonly $500 per tree, $1,000 total). Exclusions to know cold: flood, earth movement, ordinance or law, neglect, intentional loss, and faulty workmanship, subject to ensuing loss carve-backs.
Casualty side
Be ready on CGL occurrence versus claims-made triggers, per-occurrence versus general aggregate limits, supplementary payments made outside the limits, and business-risk exclusions such as your work and your product.
Traps
- Assuming an HO-3 covers contents on an open peril basis; it does not.
- Applying the deductible to each damaged item rather than to the occurrence.
- Forgetting that flood requires a separate policy (NFIP, 30-day waiting period) even when wind drove the water; the water must not have touched the ground.
Rule of thumb
Follow the money in four steps: is the peril covered, is an exclusion triggered, does an exception restore coverage, and how is the loss valued and limited?