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Author Message
Jim Flynt (Jim)
Posted on Saturday, April 22, 2000 - 5:12 pm:   

Tom Toll is to be congratulated for answering the oil in the basement coverage question and applauded for answering it correctly.

The only things I might add are the following comments:

An adjuster would be wise to always take a non-waiver agreement in any situation where damage involves "pollutants" while advising the insured that there may be coverage questions.

There would be no coverage for this loss under the Named Perils policies (HO-1, DP-1, HO-2, DP-2).

There would be no coverage for removal of any pollutant in this or any other loss from the "land" or soil as it is commonly known.

This is really a liability claim with issues which appear to be negligence on the part of the oil company with subrogation potential. That is why the oil company appears to be responding to the damage claim.

The only language within the HO-3 policy which relates to pollutants is the exclusion in language as follows:

"We do not insure, however, for loss;

(e) Any of the following:

Discharge, dispersal, seepage, migration, release or escape of pollutants unless the discharge, dispersal, seepage, migration, release or escape is itself caused by a Peril Insured Against under Coverage C of this policy." (This provision is really to exclude latent, long term, natural, and non-accidental forms of pollution. I think this language may have been what caused so many adjusters not to try and answer this coverage question).

Finally, look at a couple of other examples which an adjuster might encounter involving "pollutants:"

An insured wakes up in the middle of the night, hearing a mosquito in their bedroom. In the dark, the insured grabs what he thinks is bug spray. The next morning, to their consternation, the insured realizes they have grabbed and sprayed from a can of red spray paint, thus damaging the walls and ceilings. Is this loss covered under the HO-3? Of course it is.

An insured or guest accidentally knocks over a 5 gallon pail of paint onto the living room carpet or hardwood floor. Is the ensuing damage covered under the HO-3? Of course it is.

To me, when looking at claims like these, it is important to think of "pollutants" as defined under the policy as only being "pollutants" when they are somewhere and in some use in which they were not intended. When that happens as a result of an accident, it is generally covered, and when it is a result of seepage or a time lapsed leakage, it is not. Walk down the aisle of any Walmart in the US and you will see bottles or boxes of Clorox, cleaning fluids, lye, motor oils, paint, ammonia, petroleum derivatives, etc. and you will find these same items stored and used within almost every American household. And when they are accidentally interfaced with insured surfaces, the loss is generally covered as long as the damage is sudden, accidental and direct. But, never forget, there are specific policy exclusions which exclude removal of the pollutants from the soil ("land" as defined by policy).
Tom Toll (Tom)
Posted on Saturday, April 22, 2000 - 1:01 pm:   

Not having any specimens with us, I will venture to answer this from memory. Needless to say it is alway important to have specimen copies of policies.
The policies being presented (HO-3 & DP-3) are ALL RISK policies. I don't remember anything in the policy that would specifically exclude the damage from oil being pumped into the basement. If an independent adjuster were to be handling this file, I am sure he would investigate why this error was committed by the oil delivery company and determine damage to the residence. He then would present this information to the company for their evaluation of the loss and coverage issues.
If the oil delivery service were in compliance with laws governing the transportation of this product and had all the coverages required, then the issue would not need approaching. They would have to pay for the damage, if indeed the homeowner could present evidence that they had asked the facility to refrain from delivery until the new tank had been installed.
Donald W. Mathews (Dmat)
Posted on Wednesday, April 19, 2000 - 6:08 pm:   

Forget this post, looks like the other one. Punched too many keys, double posted and generally goofed.
Donald W. Mathews (Dmat)
Posted on Wednesday, April 19, 2000 - 5:53 pm:   

Hay Jim, Maybe they are like so many others, studing the situation and or waiting for more information as to policy type etc. been thinking about it but there seems to be a lack if information required to make an attemp to answer this issue. Only thing I can think of for not putting my neck out on this, not enough info. No since in cutting one's own throat don't you know.
Jim Flynt (Jim)
Posted on Tuesday, April 18, 2000 - 10:50 pm:   

Where are any of the following folks?


Even Ghostbuster or THE PHANTOM?

Geeze, I thought there might be at least one of you adjusters who posts here who could answer this simple little coverage question about oil in a basement?

Show us your stuff!
Tom Joyce (Tomj)
Posted on Monday, April 17, 2000 - 10:42 pm:   

Jim, I have to disqualify myself as it is the same scenario that was brought up and spent a day on during a seminar with GAB and several companies several years ago. Results will surprise some.
Jim Flynt (Jim)
Posted on Monday, April 17, 2000 - 10:27 pm:   

Where are the all the brave souls who are always telling us what great adjusters they are? Take a crack at this one and show us your stuff.
Jim (Jim)
Posted on Sunday, April 16, 2000 - 11:58 pm:   

With respect to Gale's scenario of a basement full of oil, I pose the following question?

Assuming for a moment that the policy of the insured (Mr. Thorson) was an HO-1, HO-2, DP-1, DP-2, there would be no coverage whatsoever for this particular loss as described.

Now assume, that the insured Mr. Thorson has an HO-3 or DP-3, how many think there would be coverage? Why or why not? And are there limits or exclusions which would apply?

I'll post my answer in the next day or two, after a few folks have had a chance to stick their necks out on this one.

Jim Flynt
R.D. Hood (Dave)
Posted on Saturday, April 15, 2000 - 6:24 pm:   

The policy,(if a standard one) states that the insured has an obligation to report the loss in a timely manner. That being, when the insured is aware that they have a loss.

In this instance the insured may be pleased with the actions of the contractor and does not wish to enter a claim, which is their right.

However, suppose the insured sells the home and a home inspection agent finds latent oil residue in the dwelling. And suppose the buyer refuses to purchase the risk, until the concrete floor, and oil soaked earth is removed? Where is the insured going to look?

Without having first hand knowledge of the remedial work that was done, this scenario is posed as a possibility of a claim being filed later on, even if the insured has changed carriers and the potential for some serious subrogation issues.

What a deal, free oil, and a cleaning job too !!!
Gale Hawkins (Gale)
Posted on Saturday, April 15, 2000 - 12:43 pm:   

Lewis sorry about not leaving you a question. If Gregory is excited Riiser Energy is on top of their mistake and he has a very good relationship with the contractor that initially did the remodeling job on his basement and just never gets around to calling in the loss to his HO carrier, does he give up any future rights with his carrier concerning this loss?
Posted on Saturday, April 15, 2000 - 10:41 am:   

Lewis - I believe that Gale was just letting us know about an accident that sometimes down the road some of us could run into. Maybe give us some time to think about what could and or would be the ending results of such an accident and how to handle it once the claim was presented and the
policy reviewed for the coverages provided. Only a guess but that's how I see it. I'm sure Gale will provide your answer better as to his post.
Lewis Watts
Posted on Saturday, April 15, 2000 - 9:52 am:   

What is the question? What is the policy? Question about subrogation? I am lost as to why the post!
Gale Hawkins (Gale)
Posted on Friday, April 14, 2000 - 10:09 pm:   

From today's USA Today web site.

A Basement Full of Heating Oil

MERRILL, Wis. - After changing heating systems in his home, Gregory Thorson removed the heating oil fuel tank that once occupied his basement. Officials at Riiser Energy said a computer mistakenly generated an order for 100 gallons of heating oil, which a delivery driver then pumped into a fill pipe outside the home. The oil flowed ''like running water,'' all over the Thorson's newly-remodeled basement, he said. The company immediately hired a cleanup contractor, and the carpenter who did the recent remodeling in the basement. A final damage estimate has not yet been determined.
Policy holder
Posted on Tuesday, November 21, 2000 - 10:13 pm:   

Ladies and gentlemen, I am posting for a friend. Thought maybe you can help out with this question. My friend has had a loss which requires abestoes abatement. The carrier has acknowledged it, but has not given her the money to abate it. She is really straped for money right now. They told her she must have it done by a specific date . They said she must have it done first. Is this how it is suppose to work. Maybe you can give us some tips on how this should be handled. Is there any type of letter she should be writing .She is using the carriers abating company and is at a loss as to how to handle this. Would appreciate any help you could post on this subject. The insurance process is so mind bogeling. Thanking you in advance for your help. I like your site it is really interesting.

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