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storm pro
Posted on Saturday, February 05, 2000 - 11:42 pm:   

Thank you David for your thorough explanation on these coverage issues. I will not take offense to those who suggested that I read my policy more carefully. I have, thank you.

When I suggested that frozen pipes were a covered loss I was of course assuming that damage had occured. We only owe for direct physical loss, so if there is no damage then there is no coverage.
This reminds me of my days as a staffer when we used to have theft claims from an auto such as a woman's handbag or a man's gym bag where a set of house keys was stolen. The insured would always want to be paid to change the locks on the house for protection from the perp who stole the bag since he would now have a set of keys to the house (assuming an ID of some sort was in the back that gave the insured's address). This would of course be the prudent thing to do to prevent a future loss at the home but sorry folks there is no coverage because there is no direct loss to the locks on the house.

I always hated to tell the insured's this but things like that come with the territory...
David Bennett
Posted on Saturday, February 05, 2000 - 8:08 pm:   

After reviewing all the postings, here is my take on the matter. Of course I will not attempt a comparison between losses under an auto policy to those under first party property. Additionally I will limit my remarks to a standard HO3 as we all know that the commercial policies vary greatly, especially in this day of company specific coverage forms being created.

1. The frozen pipe issue. The HO3 states for Coverage A Dwelling and Coverage B Other Structures "We insure against risks of direct physical loss to property described in Coverages A and B; however, we do not insure loss:.... Stopping at this point, some policies issued will have a definition for "risks of direct physical loss" and some do not use this phrase, the bottom line is the dwelling and other structures are covered for "risks of direct physical loss" subject to exclusions and limitations.

As we continue reading the policy excludes loss caused by: a. freezing of a plumbing, heating, air conditioning or automatic fire protective sprinkler system or of a household appliance, or by discharge, leakage or overflow from within the system or appliance caused by freezing. IF we stopped you could state no loss by freezing is covered. BUT we must keep reading. "This exclusion applies only while the dwelling is vacant, unoccupied or being constructed and then, only if you have failed to: (1) maintain heat in the building; or (2) shut off the water supply and drain the system and appliances of water; ..... The exclusion continues but for our purpose we can stop here. This is saying that as long as the building is occupied or not under construction, the exclusion doesn't apply and therefor the direct physical loss to the property described by freezing is covered as well as the resulting water damage to the described property in coverage A and or Coverage B. Of course if the building is vacant or under construction then there is no coverage for the physical loss unless you comply with one of the two conditions, maintaining heat or shutting off the water and draining the lines or appliances.

2. The motor in the range hood. If the motor shorts due to an excluded cause such as wear and tear,deterioration or inherent vice, latent defect or mechanical breakdown, then there is no coverage for the motor itself. The resulting damges by fire (which is not an excluded cause) are covered. Thus as Jim has said you owe the cost of the range hood, minus the motor. This all of course based on being able to determine the exact cause of loss. *****If the motor shorted due to a power surge or lightning strike, then you have a different scenario in that, the lightning is not an excluded cause and you owe for the resulting direct physical loss caused by the lightning, thus the motor and the hood are covered.

3. Mechanical failure in the furnace. This also follows the same basic principle as described in the range hood. If you can identify the cause and the cause is in deed a mechanical breakdown (which by the way, most courts require an actual breaking of a part in order to use this exclusion) then you don't owe the mechanical breakdown, but if the loss results in a non excluded cause such as fire, you owe the resulting fire damage. As most furnaces only have a fan motor, heating elements and electrical wiring and components, the mechanical breakdown would have occurr in the fan motor itself, if your origin and cause expert can identify the motor as the culprit and that the cause was mechanical breakdown, you technically do not owe the cause but do owe the resulting physical loss, if that physical loss is as a result of a non excluded cause.

In response to the party that said that freezing was a covered cause, they may want to reread the policy, Freezing in most HO3's is an exclusion with certain conditions for the freezing of the plumbing system,....... to be covered. The cause here is freezing of the plumbing system...... Therefor freezing without resulting direct physical loss is not a covered cause, but the freezing of a plumbing system which results in direct physical loss to the sytem and or subsequent water damage is covered damage.

Also under coverage a and coverage b, You have the exception to the losses not insured for, ... If any of these cause water damage not otherwise excluded from a plumbing, heating air conditioning or automatic fire protective sprinkler system or household appliance, we cover loss caused by the water including the cost of tearing out and replacing any part of a building necessary to repair the system or appliance. We do not cover loss to the system or appliance from which this water escaped. >>> I believe this is pretty clear, we cover the physical damage caused by the escaping water and we cover the cost of tearing out and replacing any part of a building (key word) necessary to repair the system.

Well thats my take on the coverage scenario's presented. I will be more than willing to respond via email if requested.
Cat Guy - Steve
Posted on Friday, February 04, 2000 - 9:25 pm:   

Please lend us your thoughts on the frozen pipe debate below...

Jim Flynt
Posted on Friday, February 04, 2000 - 9:17 pm:   

Xautoappraiser, you are right of course. What I should have used was the example where there was an accident due to a blown tire, and the loss was not a total. Then, the carrier would not owe for the tire, but only for the ensuing damages.

Thanks for your expertise and for teaching us all the right way.
Posted on Friday, February 04, 2000 - 7:30 pm:   

Your second example is bad:
If the vehicle is a total loss then the insurer pays ACV of the vehicle without any reduction for the cost of a tire.
Not trying to nit pick, just want to get the facts straight.
storm pro
Posted on Friday, February 04, 2000 - 6:39 pm:   

Wait a minute here people.

The HO 3 is an all risk policy, so what would the exclusion be for a frozen pipe that would exclude coverage to repair the pipe itself? This assumes the the building is not vacant (unless heat is maintained and/or water shut off)

Is not a pipe freezing and its subsequent rupture a direct physical loss to the pipe? Under what grounds are you excluding coverage for the pipe?
In the case of a pipe that just breaks you would pay only for the access to get to the leak but not the repair of the pipe as the pipe in most cases has broken due to wear and tear, deterioriation, corrosion or some other cause of loss that is EXCLUDED as per the policy.

As for an HO 2, frozen pipes are a named peril (again we need to have an occupied structure or heat must be maintained) Under the named peril of "Discharge or overflow of water from a plumbing, heating or A/C system" the policy does speak to the "appliance or system from which the water escapes" and excludes it. NOT so under the freezing peril however. There is no language in the HO 2 policy that would exclude coverage for the pipe that has frozen and ruptured.

I therefore say that the pipes are covered if they rupture due to freezing...
Jim Flynt
Posted on Monday, January 31, 2000 - 2:24 pm:   

In the range hood example, suppose that the hood was destroyed by fire which originated from a Two Dollar ($2.00) electrical light socket which was a component part of the range hood. The insurer would owe for the total replacement of the range hood less the Two Dollar ($2.00) socket. This assumes that the policy has coverage for the fire peril.

Another example is when an automobile has a flat tire being driven down the road, and there is a total loss of the vehicle, the auto insurer will pay the total of the vehicle replacement less the cost of the tire. Again, assuming coverage for PD.
R.D. Hood
Posted on Monday, January 31, 2000 - 9:44 am:   

TV Power supply repair, as part of the tv, ARE EXCLUDED FROM COVERAGE. The resultant damages (i.e. Smoke, fire, clean up, structual repair, carpet etc. are normally covered) BUT not until the policy is READ and applied to the particular loss. It cannot be stated any more clearly, the POLICY, in force and effect, at the time of the loss is the governing factor.

Also what is the cause of loss, why did TV the power supply fail? Was there a lightning strike? (covered), if so,where did it enter and where did it leave? Did you obtain an affidavit from the Repairman?

Was the set protected by any device that was supposed to prevent this, (subrogation issue).Was there an electrical spike due to a power outage?
On site or off site coverage is determined by the policy.

There are always issues to be investigated, and actual causes of loss to be determined before a claim is closed properly, know them and apply them.
Posted on Monday, January 31, 2000 - 9:27 am:   

If the cause of the fire was the power supply unit for the television, is the television excluded or what would have been the cost of the repairs to the power supply unit.
Russ Lott
Posted on Sunday, January 30, 2000 - 7:22 pm:   

Dave , great post, I was a little too short but yours is to the point. Thanks for the full explanation. Your followup is appreciated. To StormPro you may be correct in certain situations where the Insured has specific coverage for an item such as a commercial policy with sprinkler coverage. Some script policies have different language. Dave's comments and mine are a wake up call too all, read the specific policy before any recommendations for denial or claim. If the adjusting firm cannot get the policy or endorsemet for you call, the examiner, they will more than likely fax you anything they have in their file to help the field adjuster. Gosh what a pool of talent we have to draw on. Keep up the excellent dialogue.
Posted on Sunday, January 30, 2000 - 3:04 pm:   

Russ, again someone is NOT reading or comprehending the policy, as we so often advocate.

You are correct, as usual. The RESULTANT DAMAGES from a broken pipe, including one frozen: (plumbing or heating system, including drain piping) IS a covered peril, this would include the access to, and the repair of that access.

This could include removal of walls, and repair of same, including tile, sheetrock, plaster or wood and the replacement of the finishes thereupon. Whatever is required to return the property to the pre-loss condition.

With some exceptions,The Plumbing / Heating repair actions, are NOT COVERED, under a standard HO policy. That is, the soldering of a pipe, replacement of a fitting, or pipe or valve or whatever item is the cause of the loss.

Suggestion to all, PLEASE read and understand the coverage prior to affirmation or denial of responsibility, YOU could be in for a world of problems as a result of your statements.
Russ Lott
Posted on Sunday, January 30, 2000 - 8:13 am:   

Storm Pro , look at the policy, the HO covers resulting loss from a frozen pipe but not loss to the system
Posted on Saturday, January 29, 2000 - 8:53 pm:   

Correction "Poppy" frozen pipes are a cause of loss and are a covered item.
Just a little FYI....
Posted on Wednesday, December 29, 1999 - 11:02 am:   

The Cause of loss is never a covered item. You may have subro. involved if the unit is new enough.
Posted on Wednesday, December 29, 1999 - 10:20 am:   

A short in the motor of the range hood causes a
fire in the kitchen. Is the range hood covered
since it was the cause of the loss?

Also, a mechanical failure in the furnace causes a substantial fire. The furnace is destroyed by the fire. How do you adjust the furnace part of the loss?

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