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Where do I find coverage for rainwater that gets into a home due to wind damage to the structure? |
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Rain or wind driven rain coming from the atmosphere is included under the ISO HO-3 "special form" perils covering dwellings and other structures. The Section 1, A.3. Water exclusion does not preclude this type of water damage; only the "spray" from surface waters is excluded here. |
However, the "broad form" perils covering personal property is more restrictive stipulating that there is no coverage for "loss to the property contained in a building caused by rain, snow, sleet, sand or dust unless the direct force of wind or hail damages the building causing an opening in a roof or wall and the rain, snow, sleet, sand or dust enters through this opening." But, since your inquiry states there is wind damage to the structure, this restriction will not apply and the personal property also will be covered for water damage.
Note that the NFIP flood policy excludes water damage when rain enters through a wind damaged window or door, or comes through a hole in a wall or roof.
Homeowner's loss of use after windstorm power outage
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If an insured homeowner loses power for a period of time, say two weeks, can he/she claim additional living expenses although no property on the premises was damaged by the windstorm? |
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Unfortunately, there is no coverage under the ISO homeowners policy for additional living expenses unless damage has occurred on the property. In order to trigger coverage for loss of power, the damage to utilities or equipment delivering that power would need to occur on the "residence premises." |
Damage from electrical current
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A tree fell on power lines leading to their house which caused a power outage. The tree and the wires were not on their premises. When the electricity came back on there was a power surge damaging their appliances. Is this damage covered? |
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The peril is covered, but payment for the loss is restricted to non-electrical components of the property damage. |
"Sudden and accidental damage from artificially generated electrical current" is a covered peril under the HO-3 policy. First, though, we must get past the Power Failure exclusion under Section I Exclusions which states: 'Power Failure means the failure of power or other utility service if the failure takes place off the 'residence premises'."
However, there is an important exception to this exclusion: "But, if the failure results in a loss from a Peril Insured against on the 'residence premises,' we will pay for the loss caused by that peril."
In this case, the power failure resulted from a tree falling on the premises so the policy will respond with coverage for the appliances damaged by the ensuing power surge.
Unfortunately, there still may be limited coverage for this loss. The ISO in its 2000 edition of the policy has gutted the peril that covers "sudden and accidental damage from artificially generated electrical current." Previously, this provision excluded from coverage only tubes, transistors or similar electronic components. Now, all electronic components and circuitry are excluded. That leaves only the shell of electronic apparatus covered for damage from such causes as arcing, power surges or brownouts.
Spoilage after a power outage
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If an insured homeowner loses power for a period of time, can he/she file a claim for spoiled refrigerated items although no property on their premises was damaged by the windstorm? |
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Unfortunately, there is no coverage under the ISO homeowners policy for spoiled food unless damage has occurred on the property. In order to trigger coverage for food spoilage caused by loss of power, the damage to utilities or equipment delivering that power must occur on the "residence premises." The damage at the residence is not limited to windstorm; it could be damage from any covered peril. For example, if a fire or lightning strike terminates the power there would be coverage for food spoilage. |
Some insurers may offer food spoilage coverage as an enhancement to their homeowners policy, or by separate endorsement, for example, an ISO's Refrigerated Property Coverage HO 04 98 endorsement. This coverage will pay for the loss to refrigerated items up to a special limit, typically $500, when the cause of power loss occurs off the "residence premises."
Town water line connection
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Is there any coverage provided for damage to an underground water pipe connection from the town/city water line to the home if the pipe breaks? |
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The ISO form HO 00 03 05/11 provides no coverage for damage to an underground water pipe connection. The policy specifically excludes coverage under the Section 1.A.c(6) Exception. |
Coverage while home repaired
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My customer's home was extensively damaged by fire while covered under an HO-3 homeowners form. Repairs have commenced while the insured is living at a temporary residence. Is the home protected during reconstruction in the same manner as it was prior to the loss? |
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The insuring agreement for Coverage A includes materials and supplies located on or next to the residence premises used to construct, alter or repair the dwelling or other structures on the residence premises as well as the dwelling and attached structures. However, there is a suspension of theft coverage in or to a dwelling under construction, or of materials and supplies for use in the construction until the dwelling is finished and occupied. The phrase "in or to a dwelling" would preclude theft coverage for fixtures and materials already installed. |
Separate policies indicated when homeowner moves out
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We have clients who are getting a divorce. Their home is in the wife's name only. However, the wife has moved out while the husband is still living in the house. The husband's agent says that the wife needs to take out a dwelling policy and that our existing homeowners policy is not sufficient. We question this because the couple is still married at this point. Are two policies necessary? |
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Actually, three policies are necessary. |
- A Homeowners Policy is designed to be written only for owner-occupants, so an underwriter could appropriately demand a re-write to a Dwelling Policy. Not only is the wife ineligible for a homeowners policy, but some courts have allowed insurers to deny coverage after a loss occurred to the home of a nonoccupant. This is because Coverage A—Dwelling, applies to the "residence premises" defined as the described location where the named insured "resides." Some insurers and courts treat this definition as a warranty of occupancy and deny coverage when breached.
Before continuing a Homeowners Policy while the named insured no longer occupies the home, you should determine from the insurer whether the dwelling coverage is affected by the specific circumstances of your client.
- The wife now needs a renter's policy because, even though she is still married, her actual residence is not an insured location under her Homeowners Policy. Because her new residence is not an insured location, there is no liability coverage at that location and her personal property coverage has fallen to 10 percent of the Coverage C limit shown in the declarations assuming the Homeowners Policy remains in force.
- Even if the Homeowners Policy were left in place, the husband will need a renter's policy to cover his personal property and liability as his agent has pointed out. The husband's status as an "insured" for his interest in the home's contents and for his liability exposure may be questioned because he no longer is a resident in the same household as the wife/owner/named insured.
Contents in a temporary residence
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Does the named insured need to obtain a Tenant policy for contents in a temporary residence while her home, that was destroyed by fire, is being repaired, or does her current Homeowners policy cover the contents in her temporary apartment? |
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The 1991 ISO HO-3 policy states that there is a 10 percent limitation on "personal property usually located at an 'insureds' residence other than the 'residence premises'." The intent is to require the purchase of separate coverage for property in a secondary residence. In this case the phrase "usually located" would not apply. This limitation would not be triggered because insured's property is temporarily located at another residence while repairs are being made to the insured's home. |
In case there was any doubt, the 2000 ISO HO-3 policy now specifically addresses this situation by stating:
"However, this limitation does not apply to personal property:
a. Moved from the 'residence premises' because it is being repaired, renovated or rebuilt and is not fit to live in or store property in."
Personal property in a vehicle damaged by water
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Our insureds left their car parked on a street during a period of significant rainfall. Water in the street got so high that it damaged personal contents that they had left in the car. The damage to the car is covered by their auto policy's comprehensive coverage. How could they get coverage for personal property within the car in a case like this? |
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The Water Back Up And Sump Discharge Or Overflow endorsement (HO 04 95) to the homeowners policy adds coverage for water that backs up through sewers or drains also water that overflows or discharges from a sump. It does not limit this coverage to property located on the residence premises. |
However, the 2000 edition of this endorsement is not likely to respond to the loss you describe because the ISO introduced an exclusion that precludes coverage for water backing up from sewers or drains when it is the result of a flood (undefined).
A more likely source of coverage for this loss lies with the Homeowners 5 - Comprehensive Form. This form, which covers personal property against all risk of direct physical loss that is not specifically excluded, has an important exception to the Water Damage exclusion. It states, "Water damage to property described in Coverage C away from a premises or location owned, rented, occupied or controlled by an insured is covered." In my view, a car parked on the street is away from the premises.
"Vacant land" definition
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What is "vacant land" as referred to in the homeowners policy? This is important because vacant land is automatically covered as an "insured location" without being described on the policy. For example, if there was a well on the land would it be vacant? What about a temporary structure? |
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This is a matter of interpretation since "vacant" is not defined. Most insurance practitioners believe that any man made structure will remove the land from the vacant category meaning it must be in its natural state. It would appear that any improvement (for example, a well) would preclude the status of being vacant. |
Some states may have case law that will provide some guidance (i.e., see New York Ask PIA No. 310256). Any gray area, like a temporary structure, should be cleared in writing with your underwriter.
Definition of insured location - vacant property
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Under the various ISO homeowners policies there is automatic coverage for an "insured location" which includes vacant land in its definition. If there is any structure on the land is it no longer "vacant" land? In my mind, a fence on the property is a structure. If so, do you believe this creates a problem? |
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This is a matter of interpretation, since "vacant" is not defined. Most insurance practitioners believe that any man made structure will remove the land from the vacant category meaning it must be in its natural state. However, the following case in New York makes the land's lack of use the primary factor in determining whether it is vacant. |
In DeLisa v. Amica Mutual Insurance Co., 59 A.D.2d 380, 399 N.Y.S.2d 909 (1977), the court considered whether land was "vacant" under an insurance policy where the land contained a cave with an iron gate at its mouth and a platform and steel ladder inside. The owners of the property were not aware of the structures which had been installed by a group of cave explorers whom the owners allowed to use the cave free of charge.
The court held that the term "vacant land," given its ordinary import, meant "lands that are both unoccupied and unused." The court reasoned that "use of land implies the employment of the same in a manner that will materially benefit the owner." It concluded that the land was unoccupied and, because the land was not used in any way beneficial to the owners, the land was vacant.
Home sold - staying on
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If our clients sell their home and make an agreement with the buyers to continue living there for two months, paying rent, would we need to change the homeowners policy they have to a tenants policy? |
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There is no policy provision that would preclude coverage for the insured's contents and loss of use as well as personal liability. Since your clients no longer have an insurable interest in the dwelling there would be no payment to them if it were damaged. So long as your clients don't mind paying for dwelling coverage that will not pay them benefits, keeping the homeowners policy in place would be a suitable means of providing the other coverages at the "residence premises" until the policyholder buys or builds a new house. |
Your Professional Insurance Agent …
We want you to know about the insurance you’re buying.
Alan Plafker, CPIA is President of Member Brokerage Service LLC, a Melrose Credit Union Service Organization. He is a Certified Professional Insurance Agent and licensed Insurance Broker. He serves as First Vice President on the Board of Directors the PIANY (Professional Insurance Agents Association of NY), serves on the Board of CIBGNY (Council of Insurance Brokers of Greater NY), and serves as Treasurer for the New York Independent Livery Driver Benefit Fund Board of Directors. His Agency insures thousands of polices for TLC Insurance as well as many policies for all types of insurance. You can reach him in his Briarwood, Queens office at (718) 523-1300 Ext. 1082, or visit the website at: www.MemberBrokerage.com