The national Homeowners Policy guide covers the ISO homeowners forms (HO-2, HO-3, HO-4, HO-5, HO-6, HO-8), the Section I and Section II coverages, and loss settlement. This guide covers the Wisconsin rules that change how a homeowners claim is paid, starting with the valued policy law.

Valued policy law (Wis. Stat. 632.05(2); Ins 4.01)

When real property owned and occupied by the insured mainly as a dwelling is wholly destroyed, without criminal fault by the insured or the insured's assigns, the loss is conclusively the policy limit. The insurer pays the face amount without arguing about value.

What qualifies:

• owner-occupied buildings of up to four units
• seasonal dwellings
• a dwelling partly destroyed but ordered razed under a fire ordinance or similar law. It counts as wholly destroyed.

What doesn't:

• outbuildings insured with the dwelling
• mobile homes
• property under construction, unless finished and occupied by the owner

More than one policy: the law doesn't let the owner collect the full limits of every policy. When combined limits exceed the loss, recovery is limited to the full loss (631.43(1); Wegner v. West Bend Mutual, 2007 WI App 18).

Other Wisconsin rules for homeowners claims

• Replacement cost coverage may pay to replace with new materials of like size, kind and quality (632.05(1)).
• Mortgage clause: a real property loss of $500 or less is paid to the owner, not the mortgagee, unless the mortgagee is a named insured (632.08).
• Lender requirements: a lender may not require coverage on the home above the greater of replacement value or market value, even if the loan is larger (632.07).
• Domestic abuse: an innocent insured's claim for damage caused by an abuser can't be denied if the insured didn't cooperate in or contribute to the damage and the abuser is prosecuted (631.95(2)(f)).
• Hard-to-place homes: owners who can't get coverage in the voluntary market may apply to the Wisconsin Insurance Plan (WIP). WIP offers an actual cash value homeowners form, with a dwelling limit of $350,000 and $100,000 personal liability. See the Wisconsin Other Casualty guide.

Common exam traps

• The valued policy law applies only to an owner-occupied dwelling that is wholly destroyed without the insured's criminal fault.
• Mobile homes, outbuildings and homes under construction aren't covered by the valued policy law.
• A home ordered razed counts as wholly destroyed.
• With two policies, the owner still recovers only the actual loss.
• A loss of $500 or less goes to the owner despite the mortgage clause.