Case in point: I recently came across a question an agent had submitted to an online “insurance experts” forum. During Hurricane Katrina, a neighbor's boat was released from its mooring and crashed into the insured's boathouse and retaining wall, causing extensive damage. There was no damage to the retaining wall other than that done by the boat. The carrier denied the claim based on the “weight of water” exclusion. It concluded that the proximate cause of loss was the weight of water causing the release of the neighbor's boat; therefore, the subsequent damage is excluded.

Here is the wording from the ISO HO-3 form referred to by the carrier. It is found under Section I–Perils Insured Against for Coverages A and B:

We do not insure, however, for loss:
2. Caused by:
c. (2) Freezing, thawing, pressure or weight of water or ice, whether driven by wind or not, to a:
(a) Fence, pavement, patio or swimming pool;
(b)Footing, foundation, bulkhead, wall, or any other structure or device that supports all or part of a building, or other structure;
(c) Retaining wall or bulkhead that does not support all or part of a building or other structure; or
(d) Pier, wharf or dock;

My first reaction to the carrier's interpretation, upon reviewing the form wording, was, “They have got to be kidding.” Let's think this through. Picture yourself as a retaining wall. You are sitting there as hurricane winds howl about you, minding your own business and humming REO Speedwagon's “Riding the Storm Out” to yourself. Then out of the darkness hurtles a darkly silhouetted shape. As much as a retaining wall can, you cringe and await the inevitable. Crash! Pain, anguish, destruction! Later, after you spend several hours waiting your turn in the local emergency room, the receptionist asks how you were injured. How many of you would say, “I was struck down by the weight of water (wind-driven or not)”? Now, how many of you would have replied, “Some @#%&* boat smashed into me!” Ah, yes; just as I thought–the boats have it.

Seriously, how many insureds do you believe would have said to their insurers, “The weight of water damaged my retaining wall”? Zip. Rather, they likely would say, “A boat broke my wall.” And if that is the claim, it is covered. The form even has wording to allow just such an interpretation. Following the extensive list of excluded causes of loss, which includes the “weight of water” provision, are the following words: “Under 2.b. and c. above, any ensuing loss to property described in Coverages A and B not precluded by any other provision in this policy is covered.” Nowhere does the policy preclude damage caused by a watercraft. Quite the opposite, in fact. There are numerous court and industry articles describing such damage as falling under the “vehicle” peril. And please note the form does not add to the vehicle peril the words “whether driven by wind or not.”

Apparently our adjuster got a bit too caught up in all the fine print he or she had been studying in a “Claims Denial 301″ seminar and forgot to use common sense. It is a frequent failing among many of us who either have spent a great deal of time in this business or have extensively studied the forms. We get so caught up in the pieces we forget the big picture.

I found further evidence of this widespread tendency to micro-analyze (to the detriment of common sense) among the online responses elicited by the agent's questions. There were folks who supported the carrier's position and others who totally disagreed. Nearly all had unique reasoning that differed even from those who agreed with them. Many even introduced the specter of concurrent causation, clearly showing they are overdue for an extended vacation from this claims madness. I was struck by how quickly many waded into the swamp of detailed analysis, when the journey was clearly unworthy of their efforts. Quite simply, the denial of the claim was so contrary to any reasonable coverage interpretation that the e-mail question should never have needed to be asked.

This leads me back to my suggested New Year's resolution. Not only for the sake of our insureds, but also for our own sanity, we need to escape this lexicological trap of endless words. Forms drafters need to stop putting in so many tweaks and “clarifications” in response to isolated requests or recent court aberrations that form language seems to turn back on itself and create deeper coverage conundrums. Of course, these linguistic contortions represent growing opportunity for those of us who in some way profit from offering the confused layperson our advice and counsel. Many self-proclaimed experts are more than willing to claim mystical knowledge of the true meanings lying deep within the forms language.

Often when perusing the latest missive from a supposed guru, I'm reminded of Blues Traveler's great lyrics from “Hook”:

“It doesn't matter what I say
So long as I sing with inflection.
That makes you feel that I'll convey
Some inner truth of vast reflection.
But I've said nothing so far,
And I can keep it up for as long as it
takes.
And it don't matter who you are
If I'm doing my job, then it's your re-
solve that breaks.”

So in the spirit of the New Year, I have a suggestion for a truly killer resolution for the folks at AAIS, ISO and insurance claims offices everywhere. Make it clear, make it clean, pay what's fair and quit using arcane and esoteric language to drive insureds into the arms of lawyers, be they class-action specialists or state attorneys general.

Happy New Year!

Chris Amrhein is an insurance educator and speaker with more than 30 years in the industry. He is also chief fun officer of www.insuranceisfun. com. Readers may contact Chris at [email protected].