PERSONAL LINES PROVISIONS · 5 MIN READ

Key Definitions in the Homeowners Policy

Coverage disputes are usually won or lost in the Definitions section, so the exam tests the defined terms with precision. Start with the parties: you and your mean the named insured on the declarations and a resident spouse; we, us, and our mean the insurer; insured sweeps in resident relatives and certain others. The residence premises definition has three prongs: a one-family dwelling where the insured resides; a two-, three-, or four-family dwelling where the insured resides in at least one of the units; or that part of any other building where the insured resides. There is no occupancy-percentage test and no cap on rental income — an insured who occupies one unit of a four-unit building and rents the other three still has a residence premises, and a denial built on the rentals misreads the form. The liability definitions carry the same weight. Bodily injury means bodily harm, sickness, or disease. Property damage means physical injury to, destruction of, or loss of use of tangible property — three triggers, one limitation. Purely economic loss, diminution in value without physical harm, and intangibles such as data or goodwill generally do not qualify. Business status matters because business pursuits are excluded, so the definition's scope (trade, profession, or occupation, with carve-outs for minimal-income activities) decides many close cases. Insured location extends liability coverage beyond the residence premises to places like newly acquired residences, premises used in connection with the residence, and vacant land. Finally, the vehicle definitions work by exclusion and carve-back. Motor vehicle liability is broadly excluded from Section II, but the form carves out a short list that keeps coverage: motorized golf carts used on a golfing facility for golfing purposes, trailers not being towed by or attached to a motor vehicle, motorized assistive devices for the handicapped, and certain vehicles used only to service the premises. Autos, motorcycles, and ATVs stay inside the exclusion. Parallel definitions govern watercraft liability and aircraft liability. The Section II policy territory covers the United States and its territories, Puerto Rico, and Canada; a lengthy residence abroad — such as a six-month sabbatical apartment in Germany — falls outside the territory regardless of citizenship.