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July 16, 2015  

 
 Q&A of the Week

Vehicle Falls off Lift

A Maryland subscriber recently asked the following question:

We insure Maryland homeowners under the AAIS HO003 09 08 edition.
The claimant wanted to give her car to her son to use while away at college and asked our insured to could look at the car and give her an idea if it was in good shape for her son to take to college. Our insureds put the 2002 Buick LeSabre onto their hydraulic lift and it fell off the lift and was a total loss.
The estimate of repairs was $5,231.99. The NADA value was anywhere from $1,325 to $2,575 (thus a total loss).
Coverage E – Personal Liability provides coverage for the negligence of the insured.

INCIDENTAL LIABILITY COVERAGES
This policy provides the following Incidental Liability Coverages. They are subject to all of the "terms" of Coverage L and Coverage M. Except for Claims And Defense Cost, Damage To Property Of Others, First Aid Expense, and Loss Assessment, they do not increase the "limits" stated for the Principal Liability Coverages.
Page 29 of 46
4. Damage To Property Of Others – Regardless of an "insured's" legal liability, "we" pay, at replacement cost, for "property damage" to property of others caused by an "insured". The "limit" that applies to this coverage is $1,000 per "occurrence".
Page 30 of 46
7. Motorized Vehicles
a. Subject to the limitations set forth in b. and c. below, "we" pay for "bodily injury" or "property damage" that arises out of a "motorized vehicle" that:
1) is in dead storage on an "insured premises";
2) is used only to service:
a) an "insured premises", but only if the "occurrence" takes place on an "insured premises" as defined in 14.a., 14.b., 14.c., 14.f., 14.g., or 14.h. under Definitions; or
b) an "insured premises" or a premises of another, but only if such "motorized vehicle" is designed only for use off of public roads;

Property damage did not arise out of a "motorized vehicle." The vehicle was in our insured's care, custody, and control and was not in use at the time the damages were made.
Under the HO003 (09 08), do we owe for $1,000 under incidental damages to others or all of the claimant's damages to her automobile?
ANSWER: While the insured may not have been driving the vehicle, his actions could be seen as maintenance of the vehicle, which is excluded. Coverage for vehicles on the homeowners policy is deliberately very narrow; the claimant should file the loss under her auto coverage. Secondarily, why does the insured have a lift? Does he run a business? That needs to be addressed, as an auto lift is not in your average homeowner's garage.
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 What's New This Week in FC&S

Water Exclusion Clause

A standard feature of property insurance forms is the exclusion of various categories of loss associated with water. The water exclusion clause in the commercial property program (Insurance Services Office forms CP 10 10 10 12, CP 10 20 10 12, and CP 10 30 10 12) and in the ISO homeowners policy excludes loss caused by flood, surface water, water that backs up from a sewer or drain, and water under the ground surface. Read More

 
 Litigation Watch
Continuous Trigger Theory versus Manifestation Trigger

The insureds brought an action against the insurer seeking coverage for water damage that was caused by a defect present since completion of their home but that went undiscovered until well after their policy had expired. This case is Strauss v. Chubb Indemnity Insurance Company, 771 F.3d 1026 (2015).

Randall and Diane Strauss had a home built in 1994. At that time, the home was insured by Chubb Indemnity. Unknown to the parties then, water infiltrated and damaged the home through a defect present since the completion of the construction. The water damage continued until it was discovered in 2010. The Chubb policy was no longer in effect in 2010.
Read More
   
 FC&S Ask the Experts
Did you realize that the Q&A section of FC&S is made up of questions submitted by subscribers like you?

Paid subscribers to FC&S Online or print FC&S Bulletins are invited to submit insurance coverage questions to the editors. We'll provide a personalized opinion within five business days. (We'll let you know if it will be longer than that. Sometimes we have to gather research or other supporting materials).

Who knows? Your question may be featured (anonymously) in the online Q&A of the Week or as an FC&S update.

Submit your coverage interpretation question right to the editors of FC&S for quick and reliable information. Ask our expert staff a question by clicking here.
 
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 Contact Us
As always, your comments and questions are welcome.

Contact us at:
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Phone: 800-543-0874
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The Zalma Insurance Claims Library
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The only source you'll need to successfully handle insurance claims from start to finish. More Info
Construction Defects Coverage Guide
Your single-source for identifying, insuring, investigating, prosecuting, and defending cases that result from construction defect claims. More Info
Mold Claims Coverage Guide
This guide will allow you to handle mold insurance claims and litigation resulting from mold or fungi related disputes with confidence. More Info
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  Diane W. Richardson, CPCU
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