Exclusions in States That Have a Statutory Standard Form Fire Insurance Policy

Originally published by Kevin Pollack.

Insurers often issue property insurance policies intended cover multiple perils (e.g. water damage and fire). While insurers often include a number of exclusions in their policies, in states with statutory standard form fire policies (such as California), insurers cannot apply exclusions that substantially vary from the terms and conditions in the standard form fire policy regarding the peril of fire.
Examples of exclusions regularly seen in property insurance policies but that are not contained in the standard form fire policy are the wear and tear exclusion and the mechanical breakdown exclusion.

An assertion of these exclusions in a fire claim (where the cause of loss is fire) in states with statutory standard form fire policies would violate state insurance law (such as California Insurance Code §§ 2070 and 2071) because the Standard Form Policy precludes the application of exclusions not specified in the Standard Form Fire Policy. As explained by the California Supreme…

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