Subject to the policy limits that apply, we will pay only that part of the total of all loss payable under Section I that exceeds the deductible amount shown in the Declarations.”

The language does not state that a separate deductible applies to each loss. We can see nowhere in the policy that addresses the issue of separate deductibles for each loss sustained.

Please review and advise whether a separate deductible should apply? Thanks.

— Kentucky Subscriber

Answer: We believe you are overthinking the policy language. Loss is a singular noun; losses is the plural per Merriam Webster Online. Therefore, when the policy states:

“Subject to the policy limits that apply, we will pay only that part of the total of all loss payable under Section I that exceeds the deductible amount shown in the Declarations…”

…It is saying that the deductible applies to each loss separately. It could be stated more clearly, but this is standard industry language that has been used for years.

If the policy said that: '…we will pay only that part of the total of all losses payable…' then the deductible would apply on an annual basis only once per policy, as is available under some commercial coverages.

You have two losses three days apart with separate causes. Therefore, you have two claims and two deductibles should be applied.

One deductible or two?

Question: A CP 00 10 form was written on three properties for the same insured, all located at different addresses. Each location is listed with a limit of coverage and deductible on the declarations.

A storm caused damage to two of the three locations.

My superior states that both losses to the buildings will be covered with one deductible. I felt that since there is a deductible listed for each location, a deductible would be taken for each loss.

What is the correct interpretation?

— Mississippi Subscriber

Answer: The CP 00 10 states that when there is loss to more than one item of covered property and separate limits apply, a deductible is applied only once per occurrence. Nothing in the CP 00 10 addresses a situation where different deductible amounts apply to each location. There are other forms that state only the higher deductible will apply, which could be the case with your situation. But absent any other policy language pertinent to the application of deductibles, only one would apply.

Related: When a tree falls, is there debris removal coverage

When wind and rain team up

Question: During the passing of a hurricane or tropical storm, winds caused damage to a window of an insured residence causing wind-driven rain to enter the residence and damaging the insured's personal property. The winds of the storm did not directly cause damage to the personal property. The damage to the insured personal property was caused directly by the rain.

The wind-driven rain and windstorm are covered perils in our insurance policy. Our homeowners policy is an open perils policy for both dwelling and personal property coverages.

What deductible should we apply to the damage to the insured personal property: the regular deductible, which is $250 in our insurance policy, or the windstorm deductible, which is 2 percent of the limit for personal property?

— Puerto Rico Subscriber

Answer: The Puerto Rico Windstorm or Hail Percentage Deductible form, HO 03 10 10 08, states that the windstorm deductible is applied in the event of physical loss to property covered under coverages A, B, or C. Therefore, the wind deductible will apply to the personal property damage that your insured has sustained. With a 2 percent wind deductible, the minimum amount of deductible is $500.

Related: Hurricanes and homeowners' insurance deductibles

What should the deductible be when a single auto policyholder damages two of his own vehicles in the same incident? (Photo: iStock)

One auto accident, two damaged vehicles

Question: Can you provide an opinion on a personal auto policy in which the insured strikes another owned auto in his driveway? Both vehicles carry collision coverage and are listed on the same policy and owned by the insured. One vehicle was parked in the driveway and the insured driver backed into the parked vehicle. Should one deductible apply, or two?

— Virginia Subscriber

Answer: The insured cannot have the second car handled by liability because of the owned property exclusion. So the entire loss would have to be covered under physical damage coverage. However, because there was only one collision that occurred, only one deductible should apply to the total damage to both cars. (The higher of the two if they are different amounts.)

Repeat property damage offenders

Question: Our insured, a commercial bank, has a foreclosure that is a large vacant building that housed a painting company. During a three-week period, a group of people broke into the building and stripped out all of the electrical system. The damage estimate is close to $900,000. The carrier said that since the perpetrators entered the building numerous times over that period, more than one deductible applies. The policy does not define occurrence. I believe that since it is a series of similar events by the same group of perpetrators, it is a single occurrence deserving one deductible. Is that an appropriate argument?

— Kansas Subscriber

Answer: The insured must be able to show evidence that it was the same group of perpetrators who committed the acts, and they must have been committed within a reasonable amount of time. If the insured noticed things disappearing over a three-week period as opposed to two or three nights in a row, it would be more difficult to consider that as one occurrence.

Deductibles and the BAP

Question: Our insured lost control of his owned tractor, which was connected to his owned trailer. Both units sustained damage. Both units were listed on the policy with a $1,000 deductible. The insured has symbol 7 for physical damage coverage.

We applied the $1,000 deductible to both units. Now our insured's agent is questioning us. Are you aware of anything in the BAP that would waive one of the deductibles? I checked with several co-workers; no one really knew for sure.

— New Jersey Subscriber

Answer: The BAP states that “for each covered auto, the payment will be reduced by the applicable deductible shown in the declarations.” So, based on that language, since both the tractor and the trailer were each listed as a covered auto, applying the deductible to each unit is the proper approach.

Deductibles under two related policies

Question: Our insured has a package policy covering his building and his business personal property. Attached to this policy is an inland marine endorsement covering electronic data processing (EDP) equipment. The building and personal property form has a $250 deductible and the EDP endorsement has a $250 deductible.

A recent fire damaged some telephone equipment and some EDP equipment. The insurer wants to apply two deductibles to this loss. We believe that because there was only one fire — and there is only one policy — only one deductible should apply.

What are your thoughts?

— Pennsylvania Subscriber

Related: It's business, it's not personal (property)

Answer: In the case you describe, the insurer is correct in applying two deductibles. The package policy does not cover property that is specifically insured. In this case, the computer equipment is specifically insured under an EDP floater attached to the package policy.

The terms of the EDP floater govern all claims on that property. The floater says that any property loss under it is subject to a $250 deductible. That is what the insured purchased; that is how the rate for that coverage was calculated.

The other property damaged — the telephone equipment — is subject to the terms of the building and contents form. That form also carries a $250 deductible, applicable to the phone equipment.

The more specific form always applies in lieu of the general form. The settlement would be the same if your insured had a separate EDP policy, instead of a floater attached to the package. It is really separate coverage, with its own conditions.

See also:

The trouble with estimating additional living expenses (ALE)

Commercial parking lots and valet: Who pays for auto damage?