| Q&A of the Week |
Are Drones Always Aircraft?
A Virginia subscriber recently asked the following question:
How is the industry currently handling drone coverage—are they always considered aircraft?
ANSWER: In short, yes, drones are always aircraft.
The International Civil Aviation Organization defines "aircraft" as "any machine that can derive support in the atmosphere from the reactions of the air other than the reactions of the air against the earth's surface." It defines "autonomous aircraft" as "an unmanned aircraft that does not allow pilot intervention in the management of the flight." "Unmanned aircraft" is defined as "an aircraft which is intended to operate with no pilot on board" and "unmanned aircraft system" is defined as "an aircraft and its associated elements which are operated with no pilot on board." |
| |
| Litigation Watch |
The Standard or Union Mortgage Clause
First-party property insurance policies usually insure the named insured and a mortgagee. Under a standard or union mortgage clause, the insurer agrees to a separate contract with the mortgagee and that acts by the named insured/mortgagor do not effect coverage to the mortgagee. In SWE Homes, LP v. Wellington Ins. Co., 436 S.W.3d 86 (Tex. App.—Houston [14th Dist.] 2014), the court of appeal was presented with the question of whether a standard mortgage clause in a residential insurance policy provides coverage to a mortgagee for a loss by fire when the policy also contained a vacancy clause and the mortgagor had left the property vacant.
Mortgagee SWE Homes, LP appealed from the trial court's grant of summary judgment favoring insurer Wellington Insurance Company, by which the court held that SWE's loss was not covered. Edgar Sadberry purchased a residential property with a mortgage from SWE. He bought a Texas Dwelling Policy from Wellington covering the property and naming SWE as the mortgagee. The effective dates of the policy ran from August 11, 2010, until August 11, 2011. The policy covered losses from various hazards including fire. It further contained a mortgage clause, which read in pertinent part as follows: "We will pay for any covered loss of or damage to buildings or structures to the mortgagee shown on the declarations page as interests appear...d. If we deny your claim because of your acts or because you have failed to comply with the terms of this policy, the mortgagee has the right to receive loss payment if the mortgagee."
The policy also included a vacancy clause, which stated: "During the policy term, if an insured building is vacant for 60 consecutive days immediately before a loss, we will not be liable for a loss by the perils of fire and lightning or vandalism or malicious mischief. Coverage may be provided by endorsement to this policy."
Sadberry's property was damaged in a fire apparently set by an unknown arsonist on December 23, 2010. Sadberry made a claim on his insurance policy, but after he admitted the property had been left vacant for over a year prior to the fire, Wellington denied the claim under the policy's vacancy clause. SWE then filed a claim pursuant to the mortgage clause. When Wellington failed to respond, SWE filed suit. In its motion for summary judgment, Wellington argued that there was no covered loss—as required for a claim under the mortgage clause&—because the property had been left vacant for over sixty consecutive days immediately before the loss occurred. In response, SWE argued that under the policy, coverage for the mortgagee could not be defeated by the mortgagor's actions triggering the vacancy clause when SWE had no knowledge of those actions. The trial court granted Wellington's motion. |
| |
|
|
|
| Subscribe to FC&S |
| FC&S Online is the unquestioned authority on insurance coverage interpretation and anlaysis for the P&C industry. FC&S offers unbiased analysis and interpretation and keeps you current on the latest ISO and AAIS revisions. Providing instant access to the very latest information, FC&S is the resource that agents, attorneys, brokers, risk managers, underwriters, and adjusters rely on to research commercial and personal lines coverage issues. |
| • |
Quickly and accurately determine coverage under a policy at the time of loss |
| • |
Research coverage issues and interpretations, including court cases |
| • |
Access experts live to discuss specific situations |
| • |
Find answers to questions based on real-world claims disputes |
| • |
View and print ISO forms |
| • |
Access updates on breaking litigation and bureau developments |
 |
|
| |
| Join Us Live! |
| FC&S editors regularly conduct web-based demos of the service. Feel free to contact Christine Barlow, cbarlow@ SummitProNets.com, for more information. They only take 30 minutes, a small investment of time that will help you learn all that FC&S Online has to offer. |
| |
| Contact Us |
As always, your comments and questions are welcome.
Contact us at:
FC&S Department
Phone: 800-543-0874
Fax: 859-692-2246
Email: eAlerts@nuco.com |
| |
|
