Broad Form Conditions

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on our member s' Broad Form Insurance page.

This page contains examples of the standardized language developed by the Insurance Services Organization (ISO) for property insurance policies that have been used by most insurance companies in most states since the mid 1970s. The following is an example of what you can expect a typical policy:

CONDITIONS

1. Policy Period. This policy applies only to loss which occurs during the policy period

2. Insurable Interest and Limit of Liability. Even if more than one person has an insurable interest in the property covered, the company will not be liable in any one loss

a. for an amount greater than the interest of a person insured under this policy; or

b. for more than the applicable limit of liability.

3. Concealment or Fraud. The entire policy will be void if, whether before or after a loss, you have:

a. intentionally concealed or misrepresented any material fact or circumstance;

b. engaged in fraudulent conduct; or

c. made false statements;

relating to this insurance.

4. Your Duties After Loss. In case of a loss to covered property, you must see that the following are done:

a. give prompt notice to us or our agent;

b. (1) protect the property from further damage;

(2) make reasonable and necessary repairs to protect the property; and

(3) keep an accurate record of repair expenses;

c. prepare an inventory of damaged personal property showing the quantity, description actual cash value, and amount of loss Attach all bills, receipts, and related documents that justify the figures in the inventory;

d. as often as the company reasonably requires:

(1) show the damaged property;

(2) provide us with records and documents the company requests and permit us to make copies; and

(3) submit to examination under oath, while not in the presence of any other named insured, and sign the same;

e. send to us, within 60 days after our request, your signed, sworn proof of loss which sets forth to the best of your knowledge and belief:

(1) the time and cause of loss:

(2) your interest and that of all others in the property involved and all liens 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 damaged buildings and detailed repair estimates;

(6) the inventory of damaged personal property described in 4.c.;

(7) receipts for additional living expenses incurred and records that support the fair rental value loss

5. Loss Settlement. Covered property losses are settled as follows:

a. (1) Personal property;

(2) Awnings, carpeting, household appliances, outdoor antennas, and outdoor equipment, whether or not attached to buildings; and

(3) Structures that are not buildings; at actual cash value at the time of loss, but not more than the amount required to repair or replace.

b . Buildings under Coverage A or B at replacement cost without deduction for depreciation subject to the following:

(1 ) If, at the time of loss, the amount of insurance in this policy on the damaged building is 80% or more of the full replacement cost of the building immediately before the loss, the company will pay the cost to repair or replace, after application of deductible and without deduction for depreciation, but not more than the least of the following amounts

(a) the limit of liability under this policy that applies to the building;

(b) the replacement cost of that part of the building damaged for like construction and use on the same premises; or

(2) If, at the time of loss, the amount of insurance in this policy on the damaged building is less than 80% of the full replacement cost of the building immediately before the loss, the company will pay the greater of the following amounts, but not more than the limit of liability under this policy that applies to the building:

(a) the actual cash value of that part of the building damaged; or

(b) that proportion of the cost to repair or replace, after application of deductible and without deduction for depreciation that part of the building damaged, which the total amount of insurance in this policy on the damaged building bears to 80% of the replacement cost of the building.

(3) To determine the amount of insurance required to equal 80% of the full replacement cost of the building immediately before the loss, do not include the value of

(a) excavations, foundations, piers, or any supports which are below the undersurface of the lowest basement floor;

(b) those supports in (a), above, which are below the surface of the ground inside the foundation walls, if there is no basement; and

(4) The company will pay no more than the actual cash value of the damage, unless:

(a) actual repair or replacement is complete; or

(b) the cost to repair or replace the damage is both:

(i) less than 5% of the amount of insurance in this policy on the building;and

(ii) less than $2500.

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

6. Loss to a Pair or Set. In case of loss to a pair or set, the company may elect to:

a . repair or replace any part to restore the pair or set to its value before the loss; or

b. pay the difference between actual cash value of the property before and after the loss.

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

8 . Appraisal. If you and the company fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent appraiser within 20 days after receiving a written request from the other. The two appraisers will chose an umpire. If they cannot agree upon an umpire within 15 days, you or the company may request that the choice be made by a judge of a court of record in the state where the Described Location is located. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss.

Each party will:

a. pay its own appraiser; and

b. bear the other expenses of the appraisal and umpire equally.

9. Other Insurance. If property covered by this policy is also covered by other fire insurance, the company will pay only the proportion of a loss caused by any peril insured against under this policy that the limit of liability applying under this policy bears to the total amount of the fire insurance covering the property.

10. Subrogation. You may waive in writing before a loss all rights of recovery against any person. If not waived, the company may require an assignment of rights of recovery for a loss to the extent that payment is made by us.

If an assignment is sought, the person insured must sign and deliver all related papers and cooperate with us.

11. Suit Against Us. No action can be brought, unless the policy provisions have been complied with and the action is started within one year after the date of loss.

12. Our Option. If the company give you written notice within 30 days after the company receives your signed, sworn proof of loss, the company may repair or replace any part of the damaged property with like property

13 . Loss Payment. The company will adjust all Iosses with you. The company will pay you, unless some other person is named in the policy or is legally entitled to receive payment. Loss will be payable 60 days after the company receives your proof of loss and:

a. reach an agreement with you;

b. there is an entry of a final judgment; or

c . there is a filing of an appraisal award with us.

14. Abandonment of Property. The company need not accept any property abandoned by you.

15. Mortgage Clause.

The word "mortgagee" includes trustee.

If a mortgagee is named in this policy, any loss payable under Coverage A or B will be paid to the mortgagee and you, as interests appear. If more than one mortgagee is named, the order of payment will be the same as the order of precedence of the mortgages.

If the company denies your claim, that denial will not apply to a valid claim of the mortgagee, if the mortgagee:

a. notifies us of any change in ownership, occupancy, or substantial change in risk of which the mortgagee is aware;

b. pays any premium due under this policy on demand, if you have neglected to pay the premium; and

c. 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.

If the company decides to cancel or not to renew this policy the mortgagee will be notified at least 10 days before the date cancellation or non renewal takes effect.

If the company pays the mortgagee for any loss and deny payment to you:

a. the company is subrogated to all the rights of the mortgages granted under the mortgage on the property; or

b. at our option, the company may pay to the mortgagee the whole principal on the mortgage plus any accrued interest. In this event, the company will receive a full assignment and transfer of the mortgage and all securities held as collateral to the mortgage debt.

Subrogation will not impair the right of the mortgagee to recover the full amount of the mortgagee's claim.

16. No Benefit to Bailee . The company will not recognize any assignment or grant any coverage that benefits a person or organization holding, storing, or moving property for a fee, regardless of any other provision of this policy.

17. Cancellation.

a. You may cancel this policy at any time by returning it to us or by letting us know in writing of the date cancellation is to take effect.

b. The company may cancel this policy only for the reasons stated below by letting you know in writing of the date cancellation takes effect. This cancellation notice may be delivered to you, or mailed to you at your mailing address shown in the Declarations.

Proof of mailing will be sufficient proof of notice.

(1) When you have not paid the premium, the company may cancel at any time by letting you know at least 10 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, the company may cancel for any reason by letting you know at least 10 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, the company may cancel:

(a) if there has been a material misrepresentation of fact which, if known to us would have caused us not to issue the policy; or

(b) if the risk has changed substantially since the policy was issued.

This can be done by letting you know at least 30 days before the date cancellation takes effect..

(4) When this policy is written for a period of more than one year, the company may cancel for any reason at any anniversary by letting you know at least 30 days before the date cancellation takes effect.

c. When this policy is cancelled, the premium for the period from the date of cancellation to the expiration date will be refunded pro rata.

d. If the return premium is not refunded with the notice of cancellation or when this policy is returned to us, the company will refund it within a reasonable time after the date cancellation takes effect.

18. Non-Renewal. the company may elect not to renew this policy. the company may do so by delivering 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 will be sufficient proof of notice.

19. Liberalization Clause. If the company makes a change which broadens coverage under this edition of our policy without additional premium charge, that change will automatically apply to your insurance as of the date the company implements the change, provided that this implementation date falls within 60 days prior to or during the policy period stated in the Declarations.

This Liberalization Clause does not apply to changes implemented through introduction of a subsequent edition of our policy.

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

21. Assignment. Assignment of this policy will not be valid, unless the company gives our written consent.

22. Death. If you die, the company will insure:

a. your legal representatives, but only with respect to the property of the deceased covered under the policy at the time of death;

b. with respect to your property, the person having proper temporary custody of the property, until appointment and qualification of a legal re preventative.

23. Nuclear Hazard Clause.

a. "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.

b. Loss caused by the nuclear hazard will 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.

c. This policy does not apply to loss caused directly or indirectly by nuclear hazard, except that direct loss by fire resulting from the nuclear hazard is covered.

24. Recovered Property. If you or the company recover any property for which the company has made payment under this policy, you or the company will notify the other of the recovery. At your option, the property will be returned to or retained by you or it will become our property. If the recovered property is returned to or retained by you, the loss payment will be adjusted based on the amount you received for the recovered property.

25. Volcanic Eruption Period. One or more volcanic eruptions that occur within a 72-hour period will be considered as one volcanic eruption.

26. Increase in Hazard. Unless otherwise provided in writing, the company will not be liable for loss occurring:

a. while the hazard is increased by any means within your control or knowledge; or

b. while a described building, whether intended for occupancy by owner or tenant, is vacant or unoccupied beyond a period of 60 consecutive days.

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The below topics are discussed in much more depth
on our member s' Broad Form Insurance page.

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