Monday, October 31, 2011

Types Of Home Insurance Claims - Different Perils Claims

Types Of Home Insurance Claims

This post is continuing from previous post

  • Home Business Insurance Coverage Endorsement - Named Perils Polices

10. Falling Objects 

You might think for a moment, that sounds like a rather odd peril. What might a loss caused by a falling object entail? They are actually more common than you might expect. For example, if you live below a hillside with rocky soil, under the influence of heavy rains, a large rock might dislodge from the hillside and roll downhill, striking your residence. The damage resulting from that descent is clearly fortuitous and would be covered.

11. Weight of Ice, Snow, or Sleet

This peril does not include damage to buildings or contents other than from the weight of ice, snow, or sleet itself. For example, damage to the dwelling or contents caused by a roof failure due to the weight of accumulated snow would be covered. Resulting water damage to the interior or contents caused by the melting of snow subsequent to the roof failure may not be covered. Nor does this peril apply to loss to awnings, fences, patios, pavements, swimming pools, foundations, retaining walls, bulkheads, piers, wharves, or docks.

12. Accidental Discharge or Overflow of Water or Steam

This is a pretty complicated covered peril. The manner in which this peril is stated in the current ISO HO 2 and HO 3 policy forms has been substantially clarified as compared with previous versions, particularly with respect to a topic that has received a lot of publicity in recent years - the subject of coverage for claims of mold damage and mold contamination. Types Of Home Insurance Claims

This peril is defined as accidental discharge of water or steam from within a plumbing, heating, air conditioning, or fire protective sprinkler system or from within a household appliance. This peril expressly provides that the terms plumbing system or household appliance does
not include a sump pump or related equipment or a roof drain, gutter, downspout, or similar fixtures or equipment. What is not made clear is what a plumbing system does or does not comprise. Whether a plumbing system includes both pressurized supply lines and fixtures, and nonpressurized drain and toilet lines is ambiguous.

This peril also includes as covered the cost to tear out and replace any part of the dwelling or other structure when it is necessary to do so in order to repair the system or appliance from which the water or steam has escaped. This tear-out-and-replacement coverage only applies to other structures if the water or steam causes actual damage to a building on the residence premises.

The accidental water or steam discharge coverage does not apply if the dwelling has been vacant for more than sixty consecutive days prior to the loss. Company specific proprietary policies may vary in terms of the length of this time period.

Nor does the accidental water or steam discharge peril include the cost of repair of the system or appliance from which the water or steam escaped. This peril also does not cover loss caused by or resulting flora freezing, except as is provided for in the separate enumerated peril of freezing. Nor does it cover loss on the residence premises that is caused by an accidental discharge or overflow that occurs off the residence premises.

Finally, the current ISO HO 2 and HO 3 policy forms state that the accidental water or steam discharge peril does nor include loss caused by mold, fungus or wet rot unless hidden within the walls or ceilings or beneath the floors or above the ceilings of a structure.

The intent of this provision is to limit coverage for loss caused by mold to circumstances in which the mold growth or damage is not reasonably apparent to the insured. If an accidental water discharge occurs, the elimination of coverage for loss caused by mold or fungus provides an incentive for the insured to take
prompt action to remove the escaped water and to repair water damage so as to prevent the growth of mold in the first place.

Mold can only grow in an environment where there is a constant source of water - for example, where there is a repeated or continuous leak or seepage from a plumbing line or drain, such as beneath a kitchen sink.
Types Of Home Insurance Claims

In effect, the manner in which this provision is now drafted strikes a reasonable balance for an insured's expectations of coverage between a covered accidental water discharge loss and an uncovered loss that is the result of long-term neglect or failure to maintain the premises on the part of the insured. Many of the mold growth and contamination cases that have received attention in the news media have arisen from neglect or failure to maintain situations, rather than from accidental discharge of water or steam situations.

13. Sudden and Accidental Tearing Apart, Cracking, Burning, or Bulging

This peril affords coverage for direct physical loss caused by the sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, air conditioning system, an automatic fire protective sprinkler system, or an appliance for heating water. Again, this peril contains an exception for loss caused by freezing, except as provided for in the separate peril of freezing.

14. Freezing 

This peril affords coverage for loss caused by freezing of plumbing, air conditioning, fire protective sprinkler systems, or household appliances only if the insured has used reasonable care to maintain heat in the buildings or shut off the water supply to all such systems and appliances. Again, this peril provides that plumbing systems do not include sump pumps, rift drains, gutters, or downspouts.

15. Sudden and Accidental Damage from Artificially Generated Electrical Current

This peril is defined more in terms of what it does not include than what it does include. It states that it does not include loss to tubes, transistors, electronic components, or circuitry that are a part of appliances, fixtures, computers, home entertainment units, or other types of electrical apparatus. In short, this peril covers direct physical loss to the dwelling or contents (other than electronic devices) that results from power surges or arcs, such as, for example, fire, explosion, or smoke damage.

16. Volcanic Eruption 

This peril is fairly self-explanatory. It does contain an express limitation excluding loss from earthquakes, land shock waves, or tremors. Earthquake is a commonly excluded peril from standard property policies, both personal lines and commercial lines policies. In areas that are subject to earthquake, earthquake insurance can be purchased, usually in the form of an endorsement to a policy or as a separate earthquake damage policy. 

In addition, from a practical standpoint, geographic areas that are at risk of a volcanic eruption loss are seismically active, and therefore also are reasonably susceptible to earthquake losses.

It can be imagined that in the right confluence of circumstances, a volcanic eruption loss might present some loss adjustment challenges if the volcanic eruption was accompanied by sufficiently strong earthquakes that may have caused or contributed to the damage.

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