Theft of Construction Materials

The next exclusion in this group is for theft of construction materials and supplies from a dwelling under construction until the dwelling is finished and occupied. This exclusion is parallel to one of the exceptions to the personal property named peril of theft. Vandalism and Malicious Mischief The next exclusion is for loss caused by vandalism and malicious mischief, but only if the dwelling has been vacant for sixty or more consecutive days before the loss. This exclusion does not apply to dwellings in the course of construction. Exclusions 79 Repeated Seepage or Leakage of Water The next exclusion is for loss caused by constant or repeated seepage or leakage of water or steam over a period of weeks, months, or years from within a plumbing, heating, air conditioning, fire sprinkler system, or household appliance. This is a more specific example of the faulty, inadequate, or defective maintenance and neglect exclusions. As made clear by the personal property coverage named perils, coverage exists if the personal property caused by accidental discharges of water from such systems, including those caused by freezing. Further, the freezing exclusion applicable to the dwelling and other structure coverages has exceptions that will permit some coverage. The point here is that it is the insured’s duty to maintain his or her property and to take reasonable steps to protect it from loss. Failure to correct such leaks over a period of weeks, months, and years renders such water damage nonaccidental, nonfortuitous, and hence, not covered. Mold, Fungus, or Wet Rot The next exclusion in this group is for loss caused by mold, fungus, or wet rot. As with personal property coverage, if the mold, fungus, or wet rot damage results from an accidental discharge and is not apparent to the insured because it is hidden, coverage will exist. This exclusion therefore is parallel to and consistent with the constant or repeated water leakage exclusion, as mold, fungus, or wet rot resulting from such constant or repeated water leakage is not covered. Exclusions Subject to an Ensuing Loss Clause The next group of exclusions is unified by a lengthy exception that is essentially parallel to the personal property accidental water discharge named perils. These exclusions are subject to an ensuing loss clause. These exclusions are: ◆ wear and tear, marring, and deterioration, which are all examples of expected, nonfortuitous losses; ◆ mechanical breakdown, latent defect, inherent vice, or any other quality in property that causes it to damage or destroy itself 80 The Complete Book of Insurance (parallels the faulty, inadequate, or defective materials used in construction exclusion); ◆ smog, rust, dry rot, or other corrosion (parallels the maintenance exclusion); ◆ smoke from agricultural smudging or industrial operations (corresponds with the exception to the personal property named perils coverage for smoke); ◆ discharge of pollutants, unless the release of pollutants is caused by one of the personal property coverage named perils (pollutants is specifically and quite broadly defined in the policy); ◆ settling, shrinking, bulging, or expansion, including resulting cracking of bulkheads, pavements, patios, footings, foundations, walls, floors, roofs, or ceilings (this exclusion dovetails with the earth movement, subsurface water damage, freezing, and collapse exclusions); ◆ birds, vermin, rodents, or insects (which include termites). These exclusions are specific examples of failure to maintain; and, ◆ animals owned or kept by an insured. COMPARISON SHOPPING The exclusions of homeowners policies are another area in which comparison shopping may help you make an informed choice of insurer. Homeowners insurance policies may vary widely in terms of how particular exclusions are worded or exceptions to exclusions are worded that have the practical effect of providing broader coverage. The subject of exclusions is one in which homeowners insurers seek to compete with each other, although their competition is often not very transparent to the insurance consumer. It often requires actual comparison of specimen policy forms from various insurers to discern the differences in the scope of exclusions. Unfortunately, some insurers will not give out specimen copies of their policies and too few consumers take the time to ask for them

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