The structure of the ISO dwelling forms (DP-1, DP-2, DP-3) and how they differ from homeowners policies are covered in the national dwelling guide. In Massachusetts, every fire policy on property in the commonwealth must use the standard fire policy form written into the statute, M.G.L. c.175 s.99, or an approved broader form. Its provisions, and the dwelling fire nonrenewal rule, are frequent Massachusetts exam material.

The Massachusetts standard fire policy (c.175 s.99)

Insuring agreement and term:

• The policy insures against fire, lightning, and removal from endangered premises, to the extent of actual cash value.
• The Commissioner may approve a clearly specified loss settlement provision that pays more or less than ACV.
• Coverage begins and ends at 12:01 a.m. standard time at the property's location.
• Removed property is covered pro rata for five days at each place it is taken.

Not covered:

• theft
• money, deeds and securities
• explosion or riot, except for any ensuing fire
• orders of civil authority, except destruction ordered to stop the spread of a fire

Conditions:

• Willful concealment or fraud about a material fact, before or after a loss, voids the entire policy.
• Coverage is suspended while the insured knowingly increases the hazard.
• Vacancy. Coverage is suspended after 60 consecutive days of vacancy for residential buildings of three units or less, and after 30 days for all other buildings.
• Assignment needs the insurer's written consent.
• Pro rata liability. Each insurer pays its share of the loss based on all insurance on the property.
• Mortgagee. The owner's act or default doesn't void coverage for the mortgagee.
• Subrogation. The insurer may require the insured to assign rights of recovery to the extent it pays.

Cancellation:

If the insured cancels, the refund is the premium paid above the customary short rates.

After a loss:

• The policy's filing back carries the instruction "In case of fire notify the company or its local agent at once in writing."
• An insured who doesn't file a sworn proof of loss right away can still recover by promptly giving written notice of the fire and filing the statement when the insurer asks in writing (s.102).
• Payment. Within 30 days after the statement of loss, the insurer pays or replaces the property. If it intends to repair, it gives notice within 15 days.
• Disagreements about the amount. The loss goes to three disinterested referees, and a majority's award is conclusive.
  • On a written demand, the company names three people within 10 days, and the insured chooses one.
  • If the two referees can't agree on a third within 10 days, the Commissioner appoints one (s.100).
• Suits must start within two years of the loss.

Before paying certain claims:

• Building claims of $1,000 or more. The insurer gives the local building official and board of health at least 10 days' written notice before payment.
• Real property claims of $5,000 or more, other than an owner-occupied one-to-four family home. The insurer first requires a certificate of municipal liens, and liens are paid first.
• Commercial policies. Commercial policies in the standard form may exclude terrorism as defined in the federal Terrorism Risk Insurance Act of 2002.

Dwelling fire nonrenewal (c.175 s.193P)

• A policy insuring a dwelling or its contents against fire must provide 45 days' written notice of nonrenewal, with specific reasons.
• An agent who receives the notice sends the insured a copy within 15 days, unless the agent has replaced the coverage.
• No notice is needed if another company in the same group issues a succeeding policy on the same terms.

Related Massachusetts property rules

The FAIR Plan, mailed cancellation notices, heating oil coverage and lead paint liability are covered in the Massachusetts property and casualty basics guide.

Common exam traps

• The standard fire policy excludes theft. Explosion is covered only for ensuing fire.
• Vacancy beyond 60 days suspends coverage for residential buildings of 1 to 3 units, and beyond 30 days for others.
• The insurer may cancel on 5 days' notice, or 10 for nonpayment. A mortgagee gets 20 days.
• Loss disputes go to three referees.
• A loss is paid within 30 days, and suit must be filed within two years.
• Dwelling fire nonrenewal needs 45 days' notice with reasons.
• Building officials get 10 days' notice before a building claim of $1,000+ is paid.