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steveh
USA
14 Posts |
 Posted - 05/07/2003 : 07:54:52
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Please comment on coverage on this.
H03 in North Carolina.
Insured is out of town. The pump of their large fish tank malfunctions and pumps a large amount of water into the risk damaging the floors in this room and the ceilng and floors of the finished room below. Personal property is damaged in both rooms. Is there coverage for the personal property? |
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JimF
USA
1014 Posts |
Posted - 05/07/2003 : 08:52:40
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HO-3 Coverage C (Personal Property coverage) in North Carolina is on a named perils basis (unless modified by endorsement).
My question to you is: what named peril would cover personal property damage from a fish tank pump malfunction as you have described? |
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steveh
USA
14 Posts |
Posted - 05/07/2003 : 08:58:43
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| Jim, I am being told that the damage is from a sudden discharge of water from an appliance. The definition of appliance in webster is a mechanical device. |
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ChuckDeaton
USA
373 Posts |
Posted - 05/07/2003 : 11:22:07
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steveh, is the policy public domain, if so consider posting it to this site.
Your narrative leads me to beleive that the cause of loss may be something other than the obvious.
Did lightning or a power surge damage the pump. Perhaps having the pump and the electrical system of the risk inspected would shed light on the cause of loss and lead to coverage for the personal property.
Additionally the Fair Claims Practices Act in most states requires a complete investigation. |
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KileAnderson
USA
875 Posts |
Posted - 05/07/2003 : 15:19:22
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Steve,
In college, I managed a pet store and I can recall several instances when this very same event occured. Usually it was because the system was either improperly installed in the first place or, in the case of a salt water aquarium the salt caused a hose clamp to rust and eventually give out. I was not in the insurance industry at the time, so I don't know how these cases were resolved on that side, but I do know that it isn't an uncommon thing. |
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JimF
USA
1014 Posts |
Posted - 05/07/2003 : 18:43:09
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Ok Chuck, please help me to understand something here.
Fish tank pump "malfunctions" due to your scenarios: (1) Lightning and (2) Power Surge) in which case, (generally) the fish tank pump "malfunctions" BUT stops working, in which case it could not CONTINUE to pump water (including into the risk OR onto the personal property), thus further damaging the risk or contents.
Again, am I missing something here in this dialogue? |
Edited by - JimF on 05/07/2003 19:48:13 |
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JimF
USA
1014 Posts |
Posted - 05/07/2003 : 20:10:54
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Memo To Steve H:
Ok, Steve, you comment: "Jim, I am being told that the damage is from a sudden discharge of water from an appliance"
Here's what I suggest: Pull out your trusty old HO-3 policy and review the Named Perils which trigger coverage for Coverage C (Personal Property ~ Contents) and see if your described Cause of Loss ("sudden discharge of water from an appliance") is one of the Named Perils (for Coverage C ~ Contents).
After you carefully review the perils listed under the named perils section of the HO-3 policy, please report back to us here whether you think this is a covered cause of loss for contents damages. |
Edited by - JimF on 05/07/2003 20:16:00 |
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CCarr
Canada
1200 Posts |
Posted - 05/07/2003 : 22:11:20
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I must admit that I am a bit confused between the opening post and question by Steve and the latest comment and question by James. My thoughts on that is that the question is pretty straightforward, and that Jim is just trying to get Steve to 'see the light' for himself. However, I could be venturing into a quagmire.
The "aquarium pump", to be or not to be - a "plumbing system" or a "household appliance" - from which there was a accidental discharge and overflow of water due to a reported 'malfunction'?
I think we can agree that the "aquarium pump" is not a, ".... sump, sump pump or related equipment"; those being the things that the policy says are not included as a "plumbing system" relative to the Coverage C "Discharge of water" peril.
If the wording went to the trouble of telling us what was not included as a "plumbing system" for the peril in question, what conclusion could reasonably be made about any other "plumbing system"; not otherwise specifically excluded?
A 'system' is a set of interrelated elements. In other words, a system is made up of at least two or more parts that are physically or logically interrelated to each other. Or, a system is a set of parts or things, that are organized to work together.
A 'plumbing system' for a dwelling is comprised of three parts, a water supply system, a drainage system (including venting) and all fixtures and equipment connected to the supply (eg. kitchen tap) and drainage (eg. toilet bowl) systems.
An 'appliance' is a device or piece of equipment.
A 'household' is all people who live together in the same house.
Therefore, a 'household appliance' could be a device or piece of equipment used by people living in a house.
Therefore, if we take the malfunctioned "aquarium pump", I can refer to it as part of the plumbing system, due to its connection to the water supply; or I can call it a household appliance.
So now, this silly little $30 pump, has malfunctioned - on the residence premises and not as a result of freezing - and has discharged water that has damaged contents.
Coverage C, named peril #12, "Accidental discharge or overflow of water .... from within a plumbing .... system or from within a household appliance", would allow me to give favorable consideration to any damaged personal property - other than to the aquarium, the system or appliance from which the water escaped.
We have to consider the opening post as the available "claims details". They should be expressed in enough detail to give any question a reasonable chance of being answered. There was no mention of freezing, lightning, or the family cat chewing on the aquarium pump. Therefore, we should not try and read more into it that may not be present. |
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JimF
USA
1014 Posts |
Posted - 05/08/2003 : 08:01:13
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Clayton, you were correct, that I was attempting to get Steve to see the light for himself.
Those answers we must scratch out and search for through our questions are the answers we remember later on, not the ones which we are spoon fed.
Your reasoned, logical and common sense approach to solving coverage problems and coverage questions is the methodology all should seek to learn in the process of becoming more professional.
G.M.T.A. |
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steveh
USA
14 Posts |
Posted - 05/08/2003 : 08:38:57
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Thanks to all of you that responded. This is my first post and I enjoy reading the different views.
There is no other information other than what was listed on the opening post.
Jim, the original interpretation was no coverage as you stated in the North Carolina H03 policy.
Clayton's post is stated exactly how the coverage issue was questioned.
This is not a normal everyday issue and I thought it would be interesting to explore other opinions. |
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CCarr
Canada
1200 Posts |
Posted - 05/08/2003 : 09:42:06
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Steve, to try and explore thought processes that go into coverage determinations, could you share with us the reasons why "the original interpretation was no coverage"?
I ask this for a specific reason. Recently I was asked by a learned claims person to consider a claims scenario and take one side and try and argue why there would not be coverage for that scenario. I'm not used to taking that approach, but in hindsight I see where it may be of some value to later explore and understand the denial position; and hence strengthen a pro-coverage arguement.
So in your scenario, I would be interested in knowing what factors were considered and what 'weight' was placed on them to lead to a no coverage interpretation. |
Edited by - CCarr on 05/08/2003 09:48:26 |
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steveh
USA
14 Posts |
Posted - 05/08/2003 : 10:41:49
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| Clayton, Initial decision on coverage was as Jim has stated in his previous post. North Carolina personal property is on a named perils basis. The water from the fish tank was not a named peril. |
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CCarr
Canada
1200 Posts |
Posted - 05/08/2003 : 10:55:38
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Thanks Steve. Yes, the HO3 Coverage C is for named perils.
You are suggesting then that the original interpretation thinking process, was that the water escaped from a 'fish tank', but that the 'fish tank' is not a "household appliance"; and hence an accidental discharge or overflow from the 'fish tank' - regardless of how that happened - was not a requisite to trigger coverage?
Is that where the interpretation stopped?
I sincerely don't mean to make this analysis an uncomfortable process, but I'm trying to examine where interpretation processes start and stop, or alternatively illustrate how they should be approached - in a post-mortem review. |
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william s cook
53 Posts |
Posted - 05/08/2003 : 12:43:40
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Clayton, Steve and others
Absent definitions in the policy of what a household appliance is and using standard dictionary terms for what constitutes a household appliance it would appear to me that coverage exist or ambiguity exist. Insurers should send a letter of denial to the insured specifically quoting the policy language that allows such claims to be denied. Then inquiring minds can evaluate the validity of the denial. I would suggest that the insured should retain a NC licensed attorney to pursue the claim denial and insurers should be responsible for the attorney fees up to $10,000.00 if the judge deems the denial by insurers was in error.
The attorney should charge an extra hefty fee for risking his time and effort on such a speculative enterprise.
William S Cook
Public Adjuster
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CCarr
Canada
1200 Posts |
Posted - 05/08/2003 : 14:24:16
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Just to be clear Bill, I have to 'cut the line' finer - I do not see any ambiguity in the scenario presented, there is coverage, and it is found in the manner in which I presented it.
However, if any insurer was to deny any claim - either direct or through directions to an I/A and done on the I/A letterhead - that letter must utilize the policy language used to base their decision upon.
Any insurer denying such a claim - when all the information is at hand - deserves all that litigation will bring upon them. To deny such a claim scenario based on inadequate information is worse, and in those cases, the adjuster (staff or I/A) should not be protected from punishment. |
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steveh
USA
14 Posts |
Posted - 05/08/2003 : 15:43:16
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Clayton, yes that is where the consideration for coverage stopped. The interpretation was that the fish tank and pump were not an appliance and they were not part of the plumbing system.
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Water Damage
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