AAIS FARMOWNERS PROGRAM: FO 0217–WATER EXCLUSION ENDORSEMENT

(October 2023)

INTRODUCTION

This five-page mandatory endorsement’s primary purpose is to replace the five-paragraph Water Damage exclusions in FO 20–Additional Policy Conditions and Property Coverage Terms and FO 0005–Dwelling Coverage–Special Building and Contents Form. However, there are also changes in FO-2, FO-3, and FO-4. This endorsement should be examined very carefully because it has several significant modifications. Changes from the previous edition are in bold print.

1. Introductory Paragraph

The exclusion introduction paragraphs in both FO-20 and FO 0005 are amended to state that the exclusions listed apply, regardless of how widespread an area sustains damage or that the excluded peril impacts.

Note: This new wording does not apply to only the water damage exclusion. It applies to all exclusions in the first group of exclusions.

2. FO-20–Water Damage Exclusion

The following replaces the Water Exclusion in FO-20:

a. Loss that any of the following causes is excluded, whether driven by wind or not:

• Flood
• Water on the surface
• Tidal wave, tsunamis, and other waves
• Any type of tide
• Tidal water
• Overflow from a body of water
• Spray that results from any of the six items above

Tidal surge, storm surge, and tides are examples of excluded events.

b. Loss caused by water that does any of the following is excluded:

• Backs up through either a sewer or a drain
• Overflows or in some other way discharges from any of the following:
• Sump equipment such as the sump itself or a sump pump
• Another type of system that specifically removes water below the surface that drains from foundations

c. Loss that water under the ground’s surface causes is excluded. This section lists examples, but they are considered examples only. The exclusion’s wording stands as written. This endorsement lists the following as they apply to a structure such as a building, sidewalk, driveway, patio, or foundation:

• Water that exerts pressure on them
• Water that seeps into or through them
• Water that leaks into or through them
• Water that flows into or through them

d. Coverage does not apply when some material moved by or carried in the water described in a., b., and c. above causes the loss.

e. Exclusions a., b., c., and d. above apply in all of the following circumstances:

• Without any exceptions as to what caused the event. It could be caused by nature or manmade. The exclusions apply in any case.
• When a device or feature either designed or used in some way keep water out fails to do so and the water or the material in the water discharges. The discharge may be through, go over, escape, or release.

f. The loss or property damage that results from fire or explosion due to a., b., c., and d. above is covered. Explosion does not include volcanic eruption.

g. None of the exclusions in this endorsement apply to theft when theft is a covered peril.

h. The livestock coverage provided covers direct physical damage that results from only the events described in exclusion a. above. All other exclusions in this endorsement continue to apply.

3. FO 0005–Specified Definition Change

Only item a. is changed. Two items are modified.

• The first change lists additional types of domestic and plumbing systems that the definition excludes and that are excluded. This wording matches the wording in 2. b. above with respect to sump equipment and similar systems but also lists gutters, downspouts, and similar equipment.
• The second change is adding wording that explains that exclusions 1) b) Surface Water and 3) Water Below the Surface do not apply to water losses that this definition covers.

4. FO-2 and FO-4–Accidental Discharge or Overflow of Liquids or Steam

There are two changes:

• The first change lists additional plumbing systems that are excluded. This wording matches the wording in 2. b. above with respect to sump equipment and similar systems but also lists gutters, downspouts, and similar equipment.
• The second change amends exclusion a. above. It eliminates water on the surface and also eliminates exclusion c., but eliminating them applies to only this particular peril.

5. FO-3–Seepage or Leakage under Coverage A and Coverage B

There are three changes:

• The first change lists additional types of domestic and plumbing systems that are excluded. This wording matches the wording in 2. b. above with respect to sump equipment and similar systems but also lists gutters, downspouts, and similar equipment.
• The second change adds coverage for the cost to remove parts of a building or mobile home in order to make repairs but does not pay to repair the system(s) that allowed liquid or steam to escape.

• The third change amends exclusion a. above. It eliminates water on the surface and also eliminates exclusion c., but eliminating them applies to only this particular peril.

6. FO-3–Accidental Discharge or Overflow of Liquids or Steam

There are two changes:

• The first change lists additional types of domestic and plumbing systems that are excluded. This wording matches the wording in 2. b. above with respect to sump equipment and similar systems but also lists gutters, downspouts, and similar equipment.
• The second change amends exclusion a. above. It eliminates water on the surface and also eliminates exclusion c. but eliminating them applies to only this particular peril.

7. FO 0005–Seepage or Leakage

This is a new exclusion added to FO 0005.

Losses caused because liquid or steam continuously or repeatedly leaked or seeped from plumbing: heating, ventilating, or air conditioning systems: water heaters: or domestic appliances are excluded. This does not apply if an insured did not know about the leakage or seepage or if a reasonable person would not have suspected it.

Item 8. Exclusions 1) b) Surface water and 3) Water Below the Surface do not apply to the excepted continuous leakage and seepage.

This section of the endorsement adds wording that explains what constitutes domestic and plumbing systems that are excluded. This wording matches the wording used in 2. b. above with respect to sump equipment and similar systems but also lists gutters, downspouts, and similar equipment.

8. FO 0005–Water Damage Exclusion

The following replaces the Water Exclusion in FO 0005:

1) Loss that any of the following causes is exclusion, whether driven by wind or not:

• Flood
• Water on the surface
• Tidal wave, tsunamis, and other waves
• Any type of tide
• Tidal water
• Overflow from a body of water
• Spray that results from any of the six items above

Tidal surge, storm surge, and tides are examples of excluded events.

2) Loss caused by water that does any of the following is excluded:

• Backs up through either a sewer or a drain
• Overflows or in some other way discharges from any of the following:
• Sump equipment such as the sump itself or a sump pump
• Another type of system that specifically removes water below the surface that drains from foundations

3) Loss caused by water under the ground’s surface. This section lists examples, but they are to be considered examples only. The exclusion’s wording stands as written. This endorsement lists the following as applied to a structure such as a building, sidewalk, driveway, patio, or foundation:

• Water that exerts pressure on them
• Water that seeps into or through them
• Water that leaks into or through them

• Water that flows into or through them

4). Coverage does not apply when some material moved by or carried in the water described in a., b., and c. above causes the loss.

5) Exclusions 1), 2), 3), and 4) above apply in all of the following circumstances:

• With no exceptions as to the cause of the event. It could be caused by nature or be manmade. The exclusions apply in any case.
• When a device or feature either designed or used in some way keep water out fails to do so and the water or the material in the water discharges. The discharge may occur through, go over, escape, or be released.

6) The loss or property damage that results from fire or explosion due to a., b., c., and d. above is covered. Explosion does not include volcanic eruption.

7) None of the exclusions in this endorsement apply to theft when theft is a covered peril.

8) The exclusions for surface water and water below the surface do not apply to accidental discharge from plumbing, heating, ventilating, air conditioning systems, water heaters, or other domestic appliances, but only if they are not excluded elsewhere. Plumbing systems and domestic appliances do not include any part of a sump system or other system used to remove water from foundations. It is also does not include gutters, downspouts, or roof drains.

9) Exclusions 1) through 8) above do not apply to Coverage C property when away from the insured premises and any other premises the insured owns, rents, occupies, or uses. The Weather Condition exclusion also does not apply to losses this item covers.

9. FO 0005–Exception to Exclusions that Apply to Property Coverages Item 2.

If an event that items 2. f. through 2. j. above exclude causes liquid or steam to discharge and overflow from a plumbing, heating, air conditioning, automatic fire protective sprinkler system, water heater, or domestic appliance, that ensuing loss is covered. This applies only if that loss is not excluded elsewhere. This coverage includes non-extraordinary costs to deal with (remove, repair, or replace) building or mobile home components to provide access to repair the system component that causes the loss. However, this exception does cover the cost to repair the system or any appliance from which the liquid or steam escaped.

10. FO 362–Special Form Coverage–Farm Barns, Buildings, and Structures–Seepage or Leakage

This exclusion replaces the seepage or leakage exclusion in FO 362.

Losses caused because liquid or steam continuously or repeatedly leaked or seeped from plumbing: heating, ventilating, or air conditioning systems: water heaters: or domestic appliances are excluded. This does not apply if an insured did not know about the leakage or seepage or if a reasonable person would not have suspected it.

Item 8. Exclusions 1) b) Surface water and 3) Water Below the Surface do not apply to the exception for continuous leakage and seepage.

This section of the endorsement adds wording that explains what constitutes domestic and plumbing systems that are excluded. This wording matches the wording used in 2. b. above with respect to sump equipment and similar systems but also lists gutters, downspouts, and similar equipment.