Type of Losses Not Covered

TYPE OF LOSSES NOT COVERED

1. "We" do not pay for any loss resulting directly or indirectly from:

a. Wear and tear, deterioration, insects, vermin or inherent vice.

b. Rust or corrosion.

c. Freezing or overheating.

d. Latent defect, structural, mechanical or electrical breakdown or failure.

e. Any work done on the property, unless it results in a fire or explosion. In this case, "we" only

cover the loss caused by the fire or explosion.

f. The infidelity of persons (other than common carriers) entrusted with the property.

g. War. This means undeclared war, civil war, insurrection, rebellion, revolution, warlike act by a military force or

military personnel, or destruction, seizure or use of property for a military purpose. It includes any consequence of any of these. Discharge of a nuclear weapon shall be deemed a warlike act even if accidental.

h. Nuclear hazard. This means loss caused by nuclear reaction, nuclear radiation or radioactive contamination (whether controlled or uncontrolled and whether caused by, contributed to or aggravated by any peril insured against by this policy). Loss caused by nuclear hazard shall not be considered loss caused by fire, explosion or smoke. However, if the fire peril is covered by this supplemental policy, direct loss by fire resulting from the nuclear hazard is covered.

2. "We" cover loss caused only by fire or lightning while:

a.  The property is being used to transport people or goods for compensation.

b. Rented to others.

c. Being operated in any official race or speed contest.

HOW WE SETTLE CLAIMS

1. Claim Settlement

The limit(s) of liability shown in this coverage form is not the agreed value of the covered property.

Claims are settled on the basis of actual cash value at the time of loss. "We" pay the least of the following amounts:

a. the actual cash value of the property at the time of the loss based on a reduction for depreciation.

b. the cost to repair it to its condition immediately prior to the loss.

c. the cost to replace it with property of equivalent kind and quality to the extent practical.

d. the applicable limit of liability.

e. with respect to boats and recreational vehicles, "we" will repair plywood, plastic, fiberglass and molded hulls,

when repairable, according to manufacturer's specifications or accepted repair practices.

f. with respect to boat equipment, "we" will not pay a greater proportion of any loss than the insured limit bears

to the actual cash value at the time of loss.

2. Loss to Parts

If there is a loss to any part of an item which consists of several parts when complete, "we" are only liable for the

actual cash value of the part. The loss is not considered a total loss of the item.

Includes copyright material with permission of American Association of Insurance Services

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