Chapter 341. Rules Governing Standards for the Content of Dwelling Property Insurance Policies
14VAC5-341-10. Scope and applicability.
A. This chapter sets forth the standards of content for policies of dwelling property insurance covering solely owner-occupied dwellings, including condominium units. This chapter applies to insurers licensed to do business in Virginia and issuing policies of dwelling property insurance pursuant to the provisions of Chapter 21 (§ 38.2-2100 et seq.) of Title 38.2 of the Code of Virginia.
B. Compliance with this chapter is required for policies delivered or issued for delivery in Virginia with effective dates on and after December 31, 2023. Insurers and rate service organizations shall submit filings for compliance with this chapter no later than May 1, 2023.
C. No insurer shall represent to a prospective purchaser or a policyholder that a dwelling property policy subject to the provisions of this chapter is a homeowners policy as defined in § 38.2-130 of the Code of Virginia.
D. This chapter does not apply to policies that:
1. Are lender-placed;
2. Insure owner-occupied farms;
3. Insure manufactured homes as defined in § 46.2-100 of the Code of Virginia, except for policies insuring manufactured homes as defined in § 46.2-653.1 of the Code of Virginia;
4. Are issued pursuant to Chapter 27 (§ 38.2-2700 et seq.) of Title 38.2 of the Code of Virginia;
5. Are issued pursuant to Chapter 48 (§ 38.2-4800 et seq.) of Title 38.2 of the Code of Virginia; or
6. Primarily insure the personal property of renters.
E. Insurers shall file with the commission all policies or endorsements for approval before use.
F. Policies and endorsements shall not be less favorable than the provisions set forth in this chapter. Insurers may provide broader and more favorable coverages, terms, and conditions than those set forth in this chapter. Insurers may use any policy language that is not less favorable to the insured and complies with provisions of this chapter.
Statutory Authority
§§ 12.1-13 and 38.2-223 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 38, Issue 11, eff. January 1, 2022; amended, Virginia Register Volume 39, Issue 10, eff. December 31, 2022.
14VAC5-341-20. Severability.
If a provision of this chapter or its application to a person or circumstance is for any reason held to be invalid by a court, the remainder of this chapter and the application of the provisions to other persons or circumstances shall not be affected.
Statutory Authority
§§ 12.1-13, 38.2-223, and 38.2-2108 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 38, Issue 11, eff. January 1, 2022.
14VAC5-341-30. Definitions.
The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:
"Actual cash value" means the amount equal to the replacement cost minus depreciation of damaged or stolen property at the time of the loss.
"Aircraft" means a machine or device capable of atmospheric flight, including hobby or model aircraft, drones, self-propelled missiles, and spacecraft.
"Business" means a trade, profession, or occupation whether full-time, part-time, or occasional activity, including (i) farming, (ii) the rental of the whole or a part of the residence premises by an insured, (iii) the business use of part of the residence premises, or (iv) home-sharing.
"Business" shall not include:
1. The occasional rental of the whole or a part of the residence premises for dwelling purposes;
2. The rental or holding for rental of a part of the residence premises for no more than two roomers or boarders for use as a primary residence;
3. The rental of a part of the residence premises as a private garage;
4. The rental of a part of the residence premises as an office, school, or studio; or
5. The insured's use of the residence premises for remote work under an agreement with the insured's employer.
"Commission" means the State Corporation Commission.
"Condominium unit" means a dwelling as defined in § 55.1-1900 of the Code of Virginia.
"Dwelling" means any residential structure specifically named in the policy.
"Farms" or "farming" means the use of land and buildings primarily for agricultural purposes with the objective of raising animals to produce food for sale or distribution to the public and growing crops for sale or distribution to the public.
"Fixtures" means permanently installed components of the dwelling or other structures including wells; plumbing systems; pumps; air conditioning equipment, systems, and parts; heating equipment, systems, and parts; hot water heaters; lighting systems; or built-in appliances and other components where removal would deface or damage the dwelling.
"Functional replacement cost" means the cost to repair or replace the damaged dwelling or other structures with less costly common construction materials and methods that are functionally equivalent to materials and methods used in the original construction.
"Home-sharing" means rental of the whole or a part of the residence premises for lodging purposes through an online-enabled application, website, or digital network during the policy term (i) for more than seven consecutive or random days or (ii) that generates revenue of more than $2,500. An individual occupying the residence premises through home-sharing is not a roomer, boarder, tenant, or guest.
"Hovercraft" means a self-propelled air cushioned vehicle that can travel over land and water.
"Insured" means (i) any person named as an insured in the policy, (ii) if residents of the named insured's household, the named insured's spouse if not a named insured, and relatives of either, and (iii) other persons younger than 21 years of age in the care of an insured.
"Motor vehicle" means a vehicle that is self-propelled or designed for self-propulsion and is designed or licensed for use on public roads.
"Occasional rental" means rental of the whole or a part of the residence premises for lodging purposes during a policy term (i) for seven or fewer consecutive or random days or (ii) that generates revenue of up to $2,500 . Occasional rental does not include home-sharing as defined in this section.
"Pollutant" means solid, liquid, gaseous, thermal, or radioactive irritants or contaminants, including acids, alkalis, chemicals, fumes, vapors, and waste.
"Recreational motor vehicle" means a motor vehicle designed for recreational use off public roads and not subject to motor vehicle registration.
"Replacement cost" means the cost to repair or replace the damaged or stolen property with material of like kind and quality without deduction for depreciation.
"Residence employee" means an employee of an insured who provides maintenance or domestic services for the residence premises.
"Residence premises" means the dwelling, other structures, and grounds at the location named in the policy.
"Theft" means an act of stealing or attempt to steal, including loss of property from a known place under circumstances when a probability of theft exists.
"Vacant" means a dwelling (i) that has not been occupied as a residence for more than 30 consecutive days immediately before a loss and (ii) where most of the named insured's personal property has been removed such that the dwelling is not functional as a customary place of residence. A dwelling is not occupied if the dwelling is being used without the permission of an insured. A dwelling under construction or being remodeled, repaired, or renovated is not vacant.
"Vandalism" or "malicious mischief" means the willful and malicious damage to or destruction of the property excluding loss by pilferage, theft, burglary, or larceny.
Statutory Authority
§§ 12.1-13, 38.2-223, and 38.2-2108 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 38, Issue 11, eff. January 1, 2022.
14VAC5-341-40. Mandatory property coverages.
A. Insurers shall provide coverage for the dwelling on the residence premises including fixtures.
1. Insurers shall also provide coverage for materials and supplies while located on the residence premises and intended for use in construction, alteration, or repair of the dwelling or other structures.
2. For a dwelling that is a condominium unit, insurers shall provide a limit of liability of at least $5,000 for the dwelling and fixtures that are the responsibility of the condominium unit owner.
B. Insurers shall provide coverage for other structures and the fixtures of other structures on the residence premises.
1. Insurers shall provide a limit of liability of at least 10% of the dwelling limit of liability.
2. Insurers may exclude coverage for other structures that are used for business or rented or held for rental unless the structure is (i) rented to roomers, boarders, or tenants of the dwelling or (ii) rented for use solely as a private garage.
3. For condominium units, insurers shall provide coverage for other structures and fixtures of other structures that are the responsibility of the condominium unit owner.
C. Insurers shall provide coverage for (i) breakage of glass or safety glazing material that is part of a dwelling or other structure and (ii) damage to covered property by glass that is part of a dwelling or other structure. This coverage does not increase the limit of liability that applies to the damaged covered property. Insurers may exclude loss if the dwelling was vacant.
D. Insurers shall provide coverage for the expenses incurred for the removal of debris of covered property damaged by a covered cause of loss and the expense for the removal of fallen trees that damage covered property. Expenses for debris removal are included within the limit of liability applicable to the damaged property.
E. Insurers shall provide coverage for contractual fire department service charges and volunteer fire department service charges as follows:
1. Contractual fire department service charges where the fire department is called to save or protect insured property from a covered cause of loss. Insurers may limit this coverage to a residence premises not located within the limits of a city, municipality, or fire protection district furnishing fire department services.
2. Fire department service charges made by volunteer fire departments pursuant to § 38.2-2130 of the Code of Virginia.
3. Insurers shall provide at least $250 of coverage for each type of fire department service charges.
4. Insurers may not apply a deductible to the coverages in subdivisions 1 and 2 of this subsection.
F. Insurers shall offer ordinance or law coverage, subject to the exclusions or limitations within this chapter, pursuant to § 38.2-2124 of the Code of Virginia at the dwelling limit of liability within the policy or as an endorsement. This limit of liability is in addition to the limit of liability applicable to the dwelling. Insurers may make other limits of liability available for insureds to purchase. When ordinance or law coverage is provided within the policy or as an endorsement, subdivision A 3 of 14VAC5-341-70 does not apply.
G. Insurers shall provide coverage of at least 10% of the dwelling limit of liability for the increase in necessary living expenses when the dwelling is uninhabitable due to a covered cause of loss. Insurers shall provide coverage of at least 20% of the household and personal property limit of liability for condominium units.
1. Insurers shall provide this coverage for the time reasonably required to return the dwelling to a habitable condition or for the insured's household to become settled in any permanent quarters.
2. Insurers shall provide additional living expense coverage for at least two weeks while a civil authority limits access to the residence premises as a result of damage to neighboring premises by a covered cause of loss.
3. Insurers may exclude living expenses that do not continue.
4. This coverage is not limited by the expiration date of the policy.
5. Insurers may not apply a deductible to this coverage.
H. Insurers shall provide coverage of at least 10% of the dwelling limit of liability for the fair rental value of any part of the dwelling or other structure. Insurers shall provide coverage of at least 20% of the household and personal property limit of liability for condominium units.
1. Insurers shall provide this coverage for the time reasonably required to restore the dwelling or other structures to a tenantable condition following damage caused by a covered cause of loss.
2. Insurers shall provide fair rental value coverage for at least two weeks while a civil authority limits access to the residence premises as a result of damage to neighboring premises by a covered cause of loss.
3. Insurers may exclude expenses that do not continue.
4. Insurers may exclude coverage for loss or expense due to cancellation of a lease or agreement.
5. This coverage is not limited by the expiration date of the policy.
6. Insurers may not apply a deductible to this coverage.
I. Insurers shall provide coverage for damage to trees, shrubs, plants, or lawns caused by fire, lightning, explosion, riot, civil commotion, aircraft, or vehicles not owned or operated by a resident of the residence premises. When expanded or open causes of loss are provided by the policy, insurers shall also include coverage for damage to trees, shrubs, plants, or lawns caused by vandalism and malicious mischief, and actual or attempted burglary.
1. Insurers shall provide a limit of liability for this coverage of at least 5.0% of the dwelling limit of liability.
2. Insurers may limit the amount of coverage to no more than $250 for each tree, shrub, or plant on the residence premises. The limit of coverage includes debris removal coverage when the tree, plant, or shrub does not cause damage to covered property.
J. Insurers shall provide coverage for loss or damage to property while removed or being removed from the residence premises because the property is endangered by a covered cause of loss.
1. Coverage is provided for damage from any cause subject to the exclusions and limitations permitted in this chapter.
2. Insurers shall provide this coverage for at least 30 days for each removal.
3. This coverage is not limited by the expiration date of the policy.
4. This coverage does not increase the limit of liability that applies to the damaged covered property.
K. Insurers shall provide coverage for the cost of making reasonable repairs to protect covered property from further damage when the repairs are directly attributable to damage caused by a covered cause of loss. The repairs are included as part of the amount of the loss.
L. If expanded or open causes of loss are provided by the policy, insurers shall pay the cost incurred to tear out and replace the part of the dwelling or other structure necessary to gain access to the system or appliance from which the water or steam escaped if a loss to the dwelling or other structures is caused by water or steam escaping from a system or appliance. Insurers may exclude loss to the system or appliance from which the water or steam escapes.
M. Insurers shall provide coverage for direct physical loss to the dwelling, other structures, and household and personal property involving collapse of a dwelling or other structure or any part of a dwelling or other structure:
1. Caused by one or more of the following:
a. The causes of loss in subsection C of 14VAC5-341-60;
b. Hidden decay;
c. Hidden insect or vermin damage;
d. Weight of contents, equipment, animals, or people;
e. Weight of rain that collects on a roof; or
f. Use of defective materials or methods in construction, remodeling, or renovation if the collapse occurs during the construction, remodeling, or renovation.
2. Loss to an awning, fence, patio, pavement, swimming pool, underground pipe, flue, drain, cesspool, septic tank, foundation, retaining wall, bulkhead, pier, wharf, or dock is not included under subdivisions 1 b through 1 f of this subsection unless the loss is a direct result of the collapse of a building.
3. Collapse does not include settling, cracking, shrinking, bulging, or expansion. A building that is in danger of falling down or caving in is not in a state of collapse.
4. This coverage does not increase the limit of liability applicable to the damaged covered property.
5. Insurers may exclude collapse when providing only basic causes of loss set forth in subsection B of 14VAC5-341-60.
Statutory Authority
§§ 12.1-13, 38.2-223, and 38.2-2108 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 38, Issue 11, eff. January 1, 2022.
14VAC5-341-50. Optional coverage for household and personal property.
A. Insurers may offer coverage for household and personal property. If offered:
1. Insurers shall provide coverage for household and personal property on the residence premises that is owned or used by an insured.
2. At the request of the named insured at the time of loss, insurers shall provide coverage for household and personal property owned by a:
a. Guest while the property is on the residence premises or
b. Residence employee while the property is on the residence premises.
B. Insurers shall provide coverage for the insured's property (i) on the residence premises during an occasional rental or (ii) on the part of the residence premises occupied by roomers, boarders, or tenants.
C. Insurers shall provide coverage for household and personal property while it is being moved to the insured's new principal residence within the United States. Insurers shall provide coverage for property while it is being moved for 30 days from the date that moving the property begins. The household and personal property limit of liability applies to property being moved to another location. If the move began during the policy term, coverage may not be limited by the expiration of the policy.
D. Insurers shall provide coverage for the following types of household and personal property at limits of at least the following:
1. $500 total per loss on cemetery property on or off the residence premises including monuments, headstones, grave markers, and urns.
2. $100 total per loss on coin collections, medals, gold, platinum, and silver, except goldware and gold-plated ware shall not be deemed to be gold and silverware and silver-plated ware shall not be deemed to be silver.
3. $500 total per loss on passports, tickets, or stamp collections.
4. $1,000 total per loss on watercraft, trailers used with watercraft, and watercraft furnishings, equipment, and outboard motors. This limit does not apply to rowboats or canoes.
5. $500 on trailers, semi-trailers, and campers not otherwise covered in this chapter.
Statutory Authority
§§ 12.1-13, 38.2-223, and 38.2-2108 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 38, Issue 11, eff. January 1, 2022.
14VAC5-341-60. Causes of loss.
A. Insurers shall provide, at a minimum, the basic causes of loss in subsection B of this section. If an insurer provides expanded causes of loss, the causes of loss may be no less favorable than the causes of loss in subsections B and C of this section. If an insurer provides open causes of loss, the causes of loss may be no less favorable than the causes of loss in subsection D of this section. The same causes of loss shall apply to the dwelling and other structures. Insurers may offer basic, expanded, or open causes of loss for household and personal property.
B. When providing basic causes of loss, insurers shall provide coverage for direct loss caused by the following:
1. Fire or lightning.
2. Windstorm or hail. Insurers may exclude loss to:
a. The interior of the dwelling or other structure or the household and personal property within caused by rain, snow, sand, or dust unless the rain, snow, sand, or dust enters through an opening caused by the force of wind or hail;
b. Windmills, wind pumps, or towers; crop silos or contents; or metal smokestacks;
c. Grain, hay, straw, or other crops, when outside;
d. Overhead structures, including supports and screening, constructed principally of cloth, metal, fiberglass, or plastic erected to provide protection from the elements;
e. Signs;
f. Satellite dishes; radio or television antennas, including lead-in wiring, masts, or towers;
g. Fences; seawalls or property line and other free-standing walls;
h. Greenhouses, hothouses, slathouses, trellises, pergolas, cabanas, or outdoor equipment pertaining to the service of the residence premises;
i. Wharves, docks, piers, boathouses, bulkheads, or other structures located over or partially over water and the household and personal property on or within;
j. Property damaged by water from sprinklered equipment or from other piping, unless the equipment or piping was damaged as a direct result of wind or hail; or
k. Watercraft while not inside a fully enclosed building. This provision does not apply to rowboats or canoes.
3. Explosion.
4. Riot or civil commotion.
5. Aircraft.
6. Vehicles.
7. Sudden or accidental damage from smoke or soot, other than smoke from agricultural smudging or industrial operations.
C. Insurers may offer the following expanded causes of loss. If provided, coverage shall be for direct loss to the covered property from the causes of loss listed in subsection B of this section and the following causes of loss:
1. Vandalism, malicious mischief, and burglary. Insurers may exclude loss if the dwelling was vacant. If a covered cause of loss ensues, insurers shall provide coverage for the ensuing loss.
2. Falling objects. Insurers may exclude loss to:
a. Property within the dwelling or other structure that is caused by a falling object unless the falling object first damages the exterior of the roof or walls of the dwelling or other structure; or
b. The falling object itself.
3. Weight of ice, snow, or sleet that damages the (i) dwelling, (ii) other structure, or (iii) household and personal property contained in a dwelling or other structure if the weight of ice, snow, or sleet first damages the dwelling or other structure. Insurers may exclude loss to:
a. Awnings and their supports; or
b. Fences, pavements, patios, swimming pools, foundations, retaining walls, bulkheads, piers, wharves, or docks.
4. Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, or of an appliance for heating water, but excluding loss caused by or resulting from freezing.
5. Freezing of plumbing, heating, or air conditioning systems, and domestic appliances. Insurers may exclude loss caused by or resulting from freezing while a dwelling is under construction, vacant, or unoccupied for a period in excess of four consecutive days unless the insured has (i) exercised due diligence in maintaining heat in the dwelling or other structure or (ii) drained the systems and appliances and shut off the water supply.
6. Accidental discharge, leakage, or overflow of water or steam from within a plumbing, heating, or air conditioning system, or domestic appliance. This does not include loss caused by or resulting from freezing.
7. Sudden and accidental injury from electrical currents artificially generated to electrical appliances, devices, fixtures, and wiring.
D. Insurers may offer open causes of loss. If provided, insurers shall provide coverage for direct loss to the dwelling and other structures and may exclude direct loss caused by any of the following:
1. Wear and tear; marring or scratching; deterioration; inherent vice; latent defect; mechanical breakdown; rust, mold, or wet or dry rot; pollutants, smog, smoke from agricultural smudging or industrial operations; settling, cracking, shrinkage, bulging, or expansion of pavements, patios, foundations, walls, floors, roofs, or ceilings; or birds, vermin, rodents, insects, or animals owned or kept by an insured. If a covered cause of loss ensues, insurers shall provide coverage for the ensuing loss.
2. Vandalism and malicious mischief, burglary, or glass breakage if the dwelling was vacant. If a covered cause of loss ensues, insurers shall provide coverage for the ensuing loss.
3. Continuous or repeated seepage or leakage of water or steam from within a plumbing, heating, or air conditioning system or domestic appliance over a period of weeks, months, or years. This exclusion does not apply to household and personal property.
4. Windstorm, hail, ice, snow, or sleet to any of the following property:
a. Overhead structures, including supports and screening, constructed principally of cloth, metal, fiberglass, or plastic, erected to provide protection from the elements;
b. Outdoor radio or television antennas including the lead-in wiring, masts, or towers;
c. Fences;
d. Seawalls or property line and other free-standing walls;
e. Greenhouses, hothouses, slathouses, trellises, pergolas, or cabanas;
f. Outdoor equipment pertaining to the service of the residence premises; or
g. Wharves, docks, piers, boathouses, bulkheads, or other structures located over or partially over water and the household and personal property on or within.
5. Theft of property that is not an integral part of the dwelling or other structure at the time of loss or from a dwelling or other structure that is under construction.
6. Collapse, except as required by subsection M of 14VAC5-341-40.
Statutory Authority
§§ 12.1-13, 38.2-223, and 38.2-2108 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 38, Issue 11, eff. January 1, 2022.
14VAC5-341-70. Permitted exclusions.
A. For all causes of loss, regardless of any other cause of loss or event contributing concurrently or in any sequence to the loss, insurers may exclude loss caused directly or indirectly by any of the following:
1. Water, as follows:
a. Flood, ground surface water, waves, seiche, tidal water or tidal waves, overflow of a body of water, or spray from any of these, whether natural or manmade;
b. Water that backs up through sewers or drains;
c. Water that overflows or is discharged from a sump pump or other type of system designed to remove subsurface water that is drained from the foundation area;
d. Water below the surface of the ground including water that exerts pressure on or flows, seeps, or leaks through (i) sidewalks; (ii) driveways; (iii) foundations; (iv) swimming pools; (v) walls; (vi) basements or floors; or (vii) doors, windows, or other openings; or
e. Material carried or moved by water referred to in subdivisions 1 a, 1 b, and 1 c of this subsection.
The exclusions for water loss in subdivisions 1 a through 1 e of this subsection do not apply to an ensuing loss caused by fire or explosion.
2. Earth movement, natural or man-made, including earthquake, volcanic eruption, landslide, mudflow, or other earth movement caused by sinking, rising, shifting, or expansion. Insurers shall provide coverage for an ensuing loss caused by fire, explosion, or breakage of glass that is a part of the dwelling or other structure.
3. Enforcement of ordinances or laws regulating the construction, repair, or demolition of dwellings or other structures. Insurers shall provide coverage when an ordinance or law requires the use of safety glass in replacement of damaged glass that is a part of the dwelling or other structure.
4. Interruption of power or other utility service furnished to the residence premises if the interruption takes place away from the residence premises. Insurers shall provide coverage for the ensuing loss if a covered cause of loss ensues on the residence premises because of the power interruption.
5. Enemy attack by armed forces including action taken by military, naval, or air forces in resisting an actual or immediately impending enemy attack, including invasion, insurrection, rebellion, revolution, civil war, usurped power, or action taken by governmental authority in hindering, combating, or defending against the event; order of civil authority except acts of destruction at the time of and for preventing the spread of fire, provided that the fire did not originate from an excluded cause of loss.
6. Nuclear reaction, nuclear radiation, or radioactive contamination as set forth in § 38.2-2102 of the Code of Virginia.
7. Freezing, thawing, or by the pressure of ice, snow, or water to fences, pavements, patios, swimming pools, foundations, retaining walls, bulkheads, piers, wharves, or docks.
8. The exclusions in subdivisions 1 through 7 of this subsection apply even if one or more of the following concurrently contribute to the loss:
a. Weather conditions;
b. Acts or decisions including the failure to act or decide of a person, group, organization, or governmental body;
c. Faulty, inadequate, or defective:
(1) Planning, zoning, development, surveying, or siting;
(2) Design, specifications, workmanship, repair, construction, renovation, remodeling, grading, or compaction;
(3) Materials used in repair, construction, renovation, or remodeling; or
(4) Maintenance.
B. Insurers may exclude direct loss caused by:
1. An intentional act by a person insured under the policy that was directed or committed by that person, but only with respect to that person.
2. Neglect of the insured to use all reasonable means to protect the property during and after a loss.
C. Insurers may exclude coverage for the following types of property:
1. Accounts, bills, currency including virtual or digital, deeds, evidences of debt, money, scrip, stored value cards, smart cards, securities, bullion, manuscripts , letters of credit, bank notes, or notes other than bank notes;
2. Aircraft and parts except insurers shall provide coverage for (i) drones without cameras and drones that are not capable of carrying people or cargo; or (ii) hobby aircraft or model aircraft that is not capable of carrying people or cargo;
3. Animals, birds, or fish;
4. Business property, except household and personal property is not business property unless the property is in that part of the residence premises rented and occupied for home-sharing;
5. Electronic equipment that is permanently installed in a motor vehicle;
6. Tapes, wires, records, discs, or other media used with electronic equipment in a motor vehicle while the property is in or on a motor vehicle;
7. Motor vehicles, motorized bicycles, and hovercraft except (i) vehicles used to service the residence premises, (ii) utility trailers that are not licensed for road use, and (iii) electric mobility devices designed to assist an individual that has a disability;
8. Property of (i) tenants , (ii) roomers and boarders not related to the insured, and (iii) home-share occupants during the period of their home-sharing rental;
9. Property rented to others, except as provided in subsection B of 14VAC5-341-50;
10. Property that is unlawful to own or possess under state or federal law; or
11. Property that is separately described and specifically insured by this insurance or other insurance.
Statutory Authority
§§ 12.1-13, 38.2-223, and 38.2-2108 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 38, Issue 11, eff. January 1, 2022.
14VAC5-341-80. Loss settlement provisions.
A. Insurers shall include loss settlement provisions in accordance with this section.
B. When providing only basic causes of loss for the dwelling and other structures, insurers may provide loss settlement on an actual cash value basis. When providing actual cash value loss settlement, insurers shall apply actual cash value loss settlement as follows:
1. Subject to the limit of liability, insurers may pay the smaller of the following amounts:
a. Cost to repair or replace with like kind and quality; or
b. Actual cash value of the damaged property.
2. Insurers may apply actual cash value loss settlement to:
a. Household and personal property;
b. Outdoor radio and television antennas; satellite dishes;
c. Awnings; or
d. Property described under subsections A and B of 14VAC5-341-40, and permanently installed flooring (including wall-to-wall carpeting) when providing only basic causes of loss set forth in subsection B of 14VAC5-341-60.
C. If the loss settlement provision in subsection B of this section does not apply, insurers shall apply replacement cost less settlement as follows:
1. Insurers shall apply replacement cost loss settlement to the dwelling and other structures, including permanently installed flooring. Wall-to-wall carpeting is permanently installed flooring.
2. Insurers may limit replacement cost settlement to the following:
a. The limit of liability applicable to the dwelling or other structures;
b. The replacement cost of the dwelling or other structures or a part of the dwelling or other structure on the residence premises and intended for the same occupancy and use; or
c. The amount spent in repairing or replacing the dwelling or other structures or a part of the dwelling or other structure and intended for the same occupancy and use.
3. The insured may assert a claim for the actual cash value of the dwelling or other structures without prejudicing the insured's right to make further claim for the difference between the actual cash value and the replacement cost in accordance with § 38.2-2119 B of the Code of Virginia. The claim for the difference must be made within six months of (i) the last date on which the insured received a payment for actual cash value or (ii) date of entry of a final order of a court of competent jurisdiction declaratory of the right of the insured to full replacement cost, whichever shall last occur.
4. When the repair or replacement cost is $2,500 or less, insurers shall be liable for the full cost of repair or replacement before the repair or replacement has been completed.
5. Insurers may apply an insurance-to-value ratio for replacement cost loss settlement as follows:
a. Insurers may require an insurance-to-value ratio of no more than 80% before full replacement cost loss settlement applies.
b. If the insurance-to-value ratio is less than 80% for the damaged dwelling or other structure, an insurer may limit its liability for loss to the larger of the following:
(1) The actual cash value of that part of the dwelling or other structure; or
(2) That proportion of the full cost of repair or replacement without deduction for depreciation of that part of the dwelling or other structure damaged or destroyed that the whole amount of insurance applicable to the dwelling or other structure for the cause of loss bears to 80% of the full replacement cost of the dwelling or other structure.
c. In calculating the 80% insurance-to-value ratio, insurers shall disregard the cost of (i) excavations; (ii) underground flues and pipes; (iii) underground wiring and drains; and (iv) brick, stone, and concrete foundations, piers, and other supports that are below the under surface of the lowest basement floor, or where there is no basement, that are below the surface of the ground inside the foundation walls.
6. Insurers may provide replacement cost loss settlement on household and personal property as authorized by § 38.2-2119 B of the Code of Virginia.
D. Insurers may offer functional replacement cost loss settlement for the property described in subsections A and B of 14VAC5-341-40, under the conditions outlined in this subsection.
1. Functional replacement cost is only permitted at the option of the insured.
2. Insurers may not apply functional replacement cost loss settlement to property that qualifies for an amount of insurance equal to 80% or more of the full replacement cost of the dwelling or other structure.
3. Insurers shall provide the notice required by § 38.2-2119 C of the Code of Virginia.
4. Insurers may limit functional replacement cost loss settlement to the following:
a. The limit of liability applicable to the dwelling or other structures;
b. The amount necessary to repair or replace the damaged property with functionally equivalent property at a lower cost than would be required to replace the damaged property with material of like kind and quality; or
c. The amount spent in repairing or replacing the dwelling or other structure or part of the dwelling or other structure intended for the same occupancy and use.
E. Insurers shall determine loss to property that is part of a pair or set in a reasonable and fair proportion of the total value of the pair or set.
F. Insurers shall adjust losses with the named insured and shall pay the named insured unless another payee is specifically named.
G. Insurers shall restore the limits of liability after a loss .
H. Insurers may apply a property deductible unless prohibited or otherwise limited in this chapter. Insurers may apply a special property deductible for the following causes of loss (i) wind, (ii) hail, or (iii) theft. No more than one deductible may be applied to a loss. The amount of any property deductible may not exceed 10% of the dwelling limit of coverage.
I. Insurers may (i) take all or part of the damaged property at the agreed or appraised value or (ii) repair, rebuild, or replace the damaged property with other of like kind and quality within a reasonable time. Within 30 days after receiving the insured's proof of loss, the insurer shall provide notice to the insured of the insurer's decision to (i) take the property at the agreed or appraised value or (ii) repair, rebuild, or replace the damaged property.
Statutory Authority
§§ 12.1-13, 38.2-223, and 38.2-2108 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 38, Issue 11, eff. January 1, 2022.
14VAC5-341-90. Policy conditions.
A. Insurers shall include the following statutory conditions:
1. The nuclear clause set forth in § 38.2-2102 of the Code of Virginia;
2. The conditions set forth § 38.2-2104 of the Code of Virginia:
a. Assignment of the policy.
b. The time that coverage begins and ends.
3. The conditions set forth in § 38.2-2105 of the Code of Virginia:
a. Abandonment.
b. Appraisal.
c. Mortgagee interests and obligations.
d. Pro rata liability.
e. Requirements in case loss occurs.
f. Suit.
g. When loss payable.
B. Insurers shall include the following conditions:
1. If an insurer adopts revisions of the forms or endorsements that would broaden coverage currently provided without additional premium charge, the insurer shall automatically apply the broadened coverage from the effective date of the revisions.
2. If a named insured dies, insurers shall modify the definition of insured as follows:
a. The named insured includes:
(1) The spouse, if not already a named insured and if a resident of the household at the time of the death; and
(2) The legal representative with respect to the residence premises and property of the deceased insured at the time of the death.
b. Insured also includes:
(1) Members of the deceased's household who were insured at the time of the named insured's death, but only while residents of the residence premises; and
(2) Persons having proper temporary custody of the insured property until the appointment and qualification of the legal representative.
3. Insurers may not invalidate the policy if the insured waives, in writing, before a loss any right of recovery against a party for loss occurring on the residence premises. If not waived, the insurer may require from the insured an assignment of all right of recovery against a party for loss to the extent that the insurer made payment.
4. Terms or conditions in the policy that are less favorable than those provided for in this chapter or the applicable statutes are construed to conform to this chapter and those statutes.
5. Insurers shall include the relevant termination provisions in §§ 38.2-2113 and 38.2-2114 of the Code of Virginia in the policy. In addition, the following apply:
a. Return premium calculations resulting from an insurer-initiated termination shall be pro rata.
b. Terminations for non-payment of premium shall be calculated pro rata.
c. Return premium calculations resulting from an insured-initiated termination may be short rate except the penalty may not be more than 10% of the pro rata premium for the expired time.
d. Insurers may not refuse to renew the policy except in accordance with the provisions of §§ 38.2-2113 and 38.2-2114 of the Code of Virginia.
C. Insurers may include any of the following conditions. Insurers may:
1. Restrict the application of the policy to loss during the policy term.
2. Void the entire policy (i) if, whether before or after the loss, an insured has willfully concealed or misrepresented any material fact or circumstance concerning the insurance or the interest of the insured in the insurance or (ii) in the case of fraud or false swearing by the insured relating to the insurance.
3. Require the insured to notify the police if loss is by theft.
4. Require that coverage under the policy is excess over a service agreement, home warranty, or similar service warranty.
5. Require that a bailee for hire may not benefit under the policy.
6. Elect to waive a policy provision. Any waiver of a policy provision by the insurer must be in writing.
7. Exclude coverage, refuse to pay claims, or refuse to provide benefits under a policy if those actions would expose the insurer to a violation of applicable trade or economic sanctions, laws, or regulations, including those administered and enforced by the U.S. Treasury Department's Office of Foreign Assets Control.
Statutory Authority
§§ 12.1-13, 38.2-223, and 38.2-2108 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 38, Issue 11, eff. January 1, 2022.