POLICY CONDITIONS - CONDITIONS APPLICABLE TO ALL COVERAGES

Assignment
No insured or other party can sign this policy and its coverages over for use by any other party unless, first, getting the insurance company’s permission (in writing).

Cancellation and Nonrenewal
This policy may be canceled by the insured by returning the policy to the insurance company or by giving the insurance company written notice that states at what future date coverage is to stop.

The insurance company providing coverage may cancel or not renew this policy by written notice to the insured at the address shown on the  declarations.  Proof of delivery or mailing is sufficient proof of notice.

If it is during the first 59 days, the insurance company may cancel for any reason with at least 10 days’ notice before the cancellation is effective. (01/06 change)

After this policy has been in effect 60 days or more, or if it is at the policy’s annual renewal, the insurance company may cancel only at the anniversary date unless:

• the premium has not been paid when due
• the policy was obtained through fraud, material misrepresentation, or omission of fact, which, if known by the insurance company, would have changed the decision to accept the risk, or
• a material change or an increase in the hazard of the risk has occurred.

This condition goes on to say that, if the policy is canceled for nonpayment of premium, the company providing insurance will give the named insured at least 10 days’ notice before the cancellation is effective. If the policy is to be canceled for any other reason after it has been effective for 60 days or more, the insurance company is obligated to provide at least 30 days’ notice before cancellation. If the company providing coverage elects to non-renew the policy, it is obligated to provide at least a 30-day notice.

Important: Generally this provision is pre-empted by state law regarding cancel or nonrenewal reasons, amount of notice and proof of delivery. It is critical that state law is followed concerning any decision to cancel or non-renew a homeowner policy.

If any return premium is owed, it will be refunded at the time of the cancellation or as soon as is practical. Payment of the unearned premium has no bearing on cancellation.

Change, Modification, or Waiver of Policy Terms
Only the insurance company has the option of waiving or changing this policy’s terms and such waiver or change must be in writing. If the insurance company providing coverage under this policy adopts a revision that broadens coverage without additional premium, the broadened coverage will apply to this policy as of the date the insurance company adopts the revision in the state in which the described location is located. This condition applies only to revisions adopted 60 days prior to or during the policy period shown on the declarations.  This condition does not apply to changes in a policy that both broaden and restrict coverage whether in an edition change or an endorsement. (01/06 change)

Conformity With Statute
Terms in conflict with the laws of the state in which the premises shown on the declarations is located, are changed to conform to such laws. This provision is rarely relied upon since amendments or endorsements are added to policies to match the state where the policy is used. However, there are instances where the condition is relied upon.

Example: Joe Realty has a primary residence in State A and vacation homes in States B and C. The company that insures his home in State A agrees to issue policies for his other homes, but using the same policy that is used for State A. The Conformity With Statute condition makes the policies issued for the State B and State C residences operate as though they were WRITTEN for State B and State C.

Death
If the named insured or the named insured’s in-resident spouse dies the legal representative of the person who died becomes an insured as respect to the deceased insured’s premises and property but only for the coverage provided by the policy at the time of that person’s death.

Recognizing that the status of the residents in the household change in the policy once the named insured or spouse die, the definition of insured is changed for the time of transition following the death. The definition of insured is expanded to include members of the deceased person’s household who were members at the time of death but only while residing at the described premises. In addition, if a person is granted temporary custody of the covered property belonging to the deceased, that person is an insured but only for that property and only under a legal representative is appointed. (01/06 addition)
Note: This condition moved from Conditions Applicable Property Coverages Only to Conditions Applicable to All Coverages. (01/06 change)

Inspections
The insurer reserves the right to inspect the property it insures and it can do so with its own personnel or it can have another organization make an inspection on its behalf. The condition also warns the insured that, while an inspection and related information about the results of the inspection may imply a type of warranty or guarantee about the fitness of the insured location; that is not an assumption that should be made.

What purpose does this serve? This is a warning and a notice to an insured that a company inspection cannot be used as evidence of the worthiness of the property. A company has their own underwriting rules and philosophy for providing coverage and will not permit its actions to be used to the benefit of other parties. This also prevents the company from being held liable to other areas of authority concerning the property.

Misrepresentation, Concealment, or Fraud
Any intentional concealment or misrepresentation on the part of any insured can void the policy for ALL insureds. If an insured lies or hides a material fact  or any circumstance that relates to the insurance that is granted by this policy will cause the insurance to not provide coverage for any insured. This may occur either before or after any loss.

Simply put, the company should be able to rely on the statements made by the insured in making its decision to insure a person or property. If the statements are seriously in error, the insurance contract has no right to exist and the company has no obligation to honor it.

Subrogation
When an insurer pays damages, it may ask the insured to transfer his or her right to attempt to recover damages from another party. The insured must agree, in writing, to do so and to fully cooperate with the insured in pursuing the recovery. This act of seeking payment from a party responsible for a loss is called subrogation. This right is very valuable to an insurer. In fact, if an insured damages this right to recover payment after a loss has occurred, the insurer may no longer be obligated to pay for the loss. (01/06 addition)

The insured may waive all rights to recover before a loss occurs—but this waiver must be in writing. Signing this waiver BEFORE a loss does not affect coverage under the policy.

Subrogation problems do arise under homeowner policies. Many insurers aggressively assert and protect their rights to subrogate against other parties. In some instances, insurers are taking legal action against their clients who harm this right.

Note: Subrogation does not apply to losses involving medical payments made to other parties or to the Damage To Property Of Others, Incidental Liability Coverage.