An insurance is a contract. In disputes concerning contracts, this is the case almost always the terms of the agreement that will apply. The agreements set out the rights and obligations of the parties involved. Therefore, it is important to read all the provisions of the agreement in its entirety.
Recently, I received a customer who received a rejection letter for water damage in his home. The family’s dog chewed through a water pipe connected to a device and caused major water damage.
After the first field adjuster’s inspection, a rejection letter was sent citing the following exclusion:
COVERAGE A – HOUSING AND COVERAGE B ̵
1;
OTHER STRUCTURESWe insure against the risk of direct loss of property described in coverage A and B only if the loss is a physical loss of property. However, we do not insure for loss:
***
2. Caused by:
***
(8) Animals owned or kept by an “insured”.
At first glance, it seems that this insurance specifically excludes the type of damage that my client suffered. “However, we do not insure for loss: Caused by: Animals owned or kept by an ‘insured’.” However, reading the full recommendation revealed the following languages:
If any of these cause water damage that is not otherwise excluded, from a plumbing, heating, air conditioning or automatic fire protection 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 apparatus from which this water flowed out.
This denial was probably due to a pure mistake by the adjuster who did not read the full recommendation. To the credit of the insurer, this claim was paid quickly when they became aware of the language providing coverage. This situation serves as an important reminder to read the contracts as a whole. If you receive a rejection letter and want your insurance reviewed, contact Merlin Law Group for legal review.
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