HO 04 98–ISO REFRIGERATED PROPERTY COVERAGE

(July 2020)

This endorsement covers property stored in freezers or refrigerators that are located on the “residence premises.” The protection is against DIRECT damage caused by either of the two perils listed below. The maximum limit of insurance is $500 and this endorsement DOES NOT increase the applicable policy’s Coverage C insurance limit.

COVERAGE PROVIDED FOR SPECIFIC PERILS

The coverage provided by this endorsement is limited in scope. Coverage is provided when either of the following occurs:

· There is an interruption of electrical service to the refrigeration unit that is caused by damage to the generating or transmitting equipment

· There is mechanical failure of the refrigeration unit.

The form includes the defined phrase “loss of power” which refers to an interrupted source of electricity that is caused by a situation that is not under any insured’s control. This term eliminates coverage for, say, power lost due to an employee turning off a breaker switch.

The endorsement requires the insured to maintain the refrigeration unit (refrigerator, cooler or freezer) and to make certain that the unit is in proper working order. The point of this requirement is to protect an insurer from having to pay claims that are due to an insured’s obvious neglect to care for such property. Any evidence that an insured ignored warnings that a refrigerator or freezer was malfunctioning, or signs that the appliance was not properly cared for, would eliminate coverage.

Example: Carnie Saltblok owns a home which is covered by an ISO Special Form policy that’s endorsed with a HO 04 98. Carnie lost nearly $600 in food when the motor of her refrigerator stopped working and the contents in both the refrigerator and freezer compartments spoiled. The adjuster denied coverage when she visited Carnie’s home and found that the two-year-old appliance had been set into a space that was too small to allow proper ventilation for its cooling coils. Further, Carnie admitted that the appliance was jammed so tight into the wall space that she never moved it to clean out any built-up dust. The motor overheated because of these conditions.

The endorsement modifies the homeowner policy by making the Section I - power failure exclusion inapplicable when this form is attached.

SPECIAL DEDUCTIBLE

There is a $100 deductible for this coverage—no other deductible applies. In other words, if the homeowner policy has a $250 deductible appearing on the declarations page, that higher deductible would be superseded by the $100 endorsement deductible, BUT ONLY for losses involving refrigerated property.