COUNTRYWIDE
1999 Changes to the Multistate Earthquake and Volcanic Eruption Property Coverages
A new, optional earthquake and volcanic eruption endorsement has been developed which allows the insured to purchase this coverage on an amount less than the total property values, without penalty for coinsurance. An annual aggregate limit will apply. Because of the catastrophic nature of earthquake and volcanic eruption, covering property up to the full limits in every case can be devastating to insurers' financial solvency. Allowing the purchase of lesser limits is less expensive for insureds while still offering a significant degree of protection. At the same time, the insurance industry's capacity to provide coverage is less likely to be drained by the occurrence of these events.
The new endorsement is CP 10 45--Earthquake and Volcanic Eruption Endorsement (Sub-Limit Form). Along with the endorsement is CP 19 45--Earthquake-Volcanic Eruption Coverage Schedule. Endorsement CP 10 39--Sprinkler Leakage--Earthquake Extension has been withdrawn.
Existing Endorsements CP 10 40--Causes of Loss--Earthquake Form and CP 10 41--Earthquake Inception Extension Endorsement have both been revised to be compatible with the new limit application endorsement.
Listed below, under the individual states, are those states that have approved the above revisions. This text will not be repeated, but this Countrywide information will be referred to in the applicable individual sections.
Homeowners Endorsement HO 01 04--Special Provisions--California has been revised in response to the decision reached in Cheeks v. California FAIR Plan Association, Cal. Ct. App. No. B107786. The description and all references to actual cash value have been removed from the endorsement. The Loss Settlement condition in two endorsements, Limited Coverage For Earthquake--California--HO 05 32 and HO 05 33 also has been revised with respect to actual cash value. These changes are approved for ISO participating insurers as of July 8, 1999.
MAINE
The 1999 changes to the Multistate Earthquake and Volcanic Eruption Property Coverages have been approved--refer to the Countrywide section above. These changes apply to all policies written on or after December 1, 1999.
MINNESOTA
The 1999 changes to the Multistate Earthquake and Volcanic Eruption Property Coverages have been approved--refer to the Countrywide section above. These changes apply to all policies written on or after December 1, 1999.
MISSOURI
Two personal liability exclusions have been revised via special provisions endorsements and one new one has been developed, in response to the decisions reached in two separate legal cases. In the first, Wood v. Safeco Ins. Co. of America, 980 S.W. 3d 43 (Mo. App. 1998), it was decided that the insurer was obligated to defend the insured in a sale of a residence where the insured had misrepresented a material fact regarding flooding of the property. The insurer denied representation but lost the case. As a result, revisions have been made to the exclusions, now stating that if bodily injury or property damage arise out of any written or oral statement by the insured in a financial transaction, there is no coverage.
In the second case, St. Paul Fire and Marine Ins. Co. v. Zotta, it was determined that in a case of sexual molestation, the existing policy exclusion did not apply since the act of molestation originated from lack of supervision or negligent supervision. Thus the exclusion has been amended so that any bodily injury caused by the lack of supervision or negligent supervision resulting in sexual molestation, is not excluded.
Revised endorsements include: HO 01 24--Special Provisions--Missouri for homeowners policies and DL 25 24--Special Provisions--Missouri for dwelling liability policies. The new endorsement is
DL 98 50--Personal Umbrella Policy Amendment of Policy Provisions--Missouri.
These changes apply to all policies written on or after September 1, 1999.
NEBRASKA
The 1999 ISO Multistate Commercial General Liability Changes regarding the issues of known injury or damage have been approved. These changes apply to all policies written on or after December 1, 1999.
NEW YORK
Personal Auto Information Endorsement PP 03 67--Rating Information (Physical Damage)--New York has been withdrawn and revised. Rating Information--New York--PP 03 66 has replaced it. These changes apply to all policies written on or after November 1, 1999.
OKLAHOMA
In response to the decision reached in the case of Wagnon v. State Farm Fire and Casualty Co., 951 P, 2d 641 (Oklahoma 1997), the homeowners endorsement, Special Provisions--Oklahoma--HO 01 35, has been revised to clarify that any action taken against an insurance carrier must be started by the insured within two years from the date of loss. These changes apply to all policies written on or after December 1, 1999.
SOUTH CAROLINA
The simplified multistate Professional Liability Medical Malpractice Program including Year 2000 Computer-Related Loss endorsements has been approved. The previous non-simplified forms and endorsements no longer are being supported. These changes apply to all policies written on or after December 1, 1999.
The multistate Employment-Related Practices Liability Program has been approved. This change applies to all policies written on or after December 1, 1999.
The multistate Interline endorsement revisions have been approved. These changes extend the endorsement's applicability to various new or additional lines of business. Approval applies to all policies written on or after December 1, 1999.
SOUTH DAKOTA
The optional, simplified, Professional Liability Program Year 2000 endorsements have been approved. These changes apply to all policies written on or after November 1, 1999.
WEST VIRGINIA
In response to the decision in Murray vs. State Farm Fire and Casualty Co., S.E.2d 1 (W. Va. 1998), the homeowners endorsement, Special Provisions--West Virginia--HO 01 47, has been revised. Two changes have occurred. First, there is no coverage for any earth movement including sinking, rising or shifting, whether caused by or resulting from any human or animal forces or act of nature. Second, the Concurrent Causation language in the exclusions has been added so that there is no coverage for excluded perils whether or not the loss event resulted in widespread damage or affected a substantial area. These changes apply to all policies written on or after November 1, 1999. *