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The dwelling and other structures Example 1: You have a detached garage onto which you have added an office for your business. Under this form, there is NO COVERAGE for your garage. Example 2: In your detached garage, you store equipment used solely for your business. There is no coverage. Example 3: You run a small retail operation, or a beauty salon, or a repair service, or ANY business out of a structure that is not attached to your home. Under this form, you will NOT have any coverage for losses that occur to the structure. Implicit in the definition of the word "dwelling" is the intent of the home to be used "principally" as a "residence". While the word "principally" in not defined in the l984 forms it did appear in the previous form series and the intent remains the same. Underwriting guidelines of the insurance companies are specific in their legibility section that homes do NOT qualify for Homeowner's Coverage if the home is actually a business occupancy such as a converted home used as a law office. The term "principally as a residence" as relates to home use has been interpreted in various claims situations as being 50% or more of the time or 50% or more of the square footage of the home being devoted to dwelling purposes. Coverage B--Other Structures--is very explicit in its intent NOT to cover the "Other Structures" used in "whole or in part for business purposes". Instead, CP0442 can be attached, which is the Permitted Incidental Occupancy Clause to be used for both Dwelling and/or Other Structures as described. |
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Not only are policy forms, clauses, rules and court decisions constantly changing, but forms vary from company to company and state to state. This material is intended as a general guideline and might not apply to a specific situation. The authors, LunchTimeCE, Inc., CEfreedom, and Insurance Skills Center, and any organization for whom this course is administered will have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this course.
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