Critter-related property damage requires an eagle eye

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Question: This question is related to an HO-3 homeowners’ policy…

A mother raccoon stowed her six babies and one kitten under the bathroom floor of our insured’s home.  The entry point was discovered and closed off so the mother raccoon could not return; the kits subsequently die.

The insured eventually smelled an odor and ripped out the bathroom floor, discovering the decaying carcasses. The area has to be cleaned out and the insulation replaced, due to the contamination.

Is the raccoon’s decaying body a covered cause of loss, and does the policy afford coverage to repair the access damage done to the bathroom?      

— Michigan Subscriber

Answer: The key here is which policy this is on. The HO 00 03 05 11 excludes nesting or infestation by animals, and the kits were certainly the result of nesting.

However under the HO 00 03 10 00, the exclusion is for birds, vermin, rodents or insects.

Rodent is a scientific classification, and is the Order of an animal. The Order of raccoons is Carnivora; if a raccoon were a rodent, the order would be Rodentia, which it isn’t, so a raccoon is not a rodent. Nor is it an insect, a bird, or a vermin. Vermin are defined Merriam Webster online as:

1. Small, common, harmful, or objectionable animals (as lice or fleas) that are difficult to control;
2. Birds and mammals that prey on game;
3. Animals that at a particular time and place compete (as for food) with humans or domestic animals.

Raccoons aren’t similar to lice or fleas, and don’t truly prey on game or compete with humans for food as they are omnivores and will scavenge and eat fruit, grass, frogs, fish, mice, carrion or other edibles. Under this form, the damage would be covered.

Now, since you have a dead body, the issue of pollutant comes up. Pollutants are defined as excluded, but the list of excluded items is geared towards industrial byproducts.  Also, Nicholson v. Allstate Ins. Co., 979 F. Supp. 2d 1054 (E.D. Cal. 2013) speaks to this directly. In this case, the court stated that the carrier failed to show that the standard pollution exclusion in the homeowners’ policy would be understood by a reasonable policyholder to apply to bat guano and decaying bat carcasses. So the pollution exclusion does not apply.

If the animal exclusion likewise does not apply, there is coverage; if the animal exclusion does apply, there is no coverage.

Take a good look at the policy language involved; that’s going to determine coverage.

Raccoons in the attic

Question: I have a client who has sustained raccoon damage to his home, including the soffit area. This is a seasonal home, so the insured is often not there. The insured has on several occasions hired a pest removal company, and has removed raccoons and attempted to board up their access points. There is some damage to the drywall in one of the ceiling areas and also the smell of animal urine.

The insurance carrier has cited this coverage exclusion: “We do not insure loss: Caused by: ‘Nesting, infestation, or discharge or release of waste products or secretions, by any animal.’ They further cite a Merriam-Webster definition that defines nesting as being, ‘a place where an animal or insect lives and usually lays eggs or takes care of its young.’ They go on to say that nesting is when an animal makes your home their home. To make their home, they have an entrance and egress to their home which is considered part of the nesting process. Therefore, the damage to your home caused by the nesting raccoons is not a covered loss under your insurance policy. “

Is the insurance company’s interpretation correct or it there coverage? I have seen many articles and had many other insurers pay for damage by raccoons as they are not considered vermin, but have not previously seen the exclusion of nesting cited for raccoons. What are your thoughts? 

— Ohio Subscriber

Answer: ISO modified the exclusion for animals in the 2011 homeowners form. Instead of excluding just birds, vermin, rodents, and insects, as in the 2000 form, the form now excludes birds, rodents or insects, as well as nesting or infestation, or discharge or release or waste or secretions by any animals. This eliminates the need to define vermin or rodent, and clearly excludes raccoons, bats, squirrels, or any other animal that may move into the attic. Animal is a much broader category than birds, vermin, rodents and insects, and was used in order to eliminate the confusion and attempts to categorize different animals. The loss is not covered.

This was no Pepe Le Pew

Question: Our insureds let the dog out to go to the bathroom. They have a doggie door. When the dog returned, the insureds smelled a skunk. They tried to catch the dog but he kept running around, jumping on the bed, and rolling around on the carpet before they caught him.

Is there coverage for subsequent odor removal?

— Michigan Subscriber

Answer: The bedclothes aren’t covered, since they’re named peril items and a stinky dog rolling on them is not a named peril. Same for the carpet, if it’s a removable rug. If it’s wall to wall, then there is coverage.

What follows is the formula to deodorize the dog and the bed clothes. You will need:

• 1 quart of 3 % hydrogen peroxide (from drug store)
• ¼ cup of baking soda (sodium bicarbonate)
• A teaspoon of liquid detergent.

Mix all of the ingredients right before you’re ready to use; the mixture is unstable and creates oxygen and may break a container if you try to contain it.

This is enough to wash a small dog, say Jack Russell terrier size. They might want to test a small section of the bedclothes; depending on the color the peroxide might bleach the color.

Hope it helps!

Some skunks don’t funk around

Question: This insured has an HO-3 homeowners’ insurance policy.

A skunk sprayed the house under the screen porch, and the smell wafted throughout the home. The carrier has committed to pay to clean and deodorize the entire house. But now, tear-out is necessary to get to the area that sustained the direct spray, as the odor has not completely dissipated.

The carrier is now telling the insured that the policy pays for only direct physical damage, and that the smell in the area other than that which received the direct hit is not considered direct physical damage.

The family has been in a hotel since the loss occurred.

— New York Subscriber

Answer: Skunk odor must be chemically altered in order to be removed; it generally does not just “air out.” The odor consists of various chemical molecules, and the deposit of those molecules counts as direct physical damage. The carrier should pay for the clean up of the odor.

Animals make the worst decorators

Question: We  have a commercial property claim in which the property management company for a housing subdivision discovered damage to the inside of their clubhouse. The damages inside looked like an animal had chewed up portions of the carpet, window sills and doors inside the clubhouse. The insured called an exterminator, who said that it appeared a squirrel or similar animal got inside, causing the damage.

The exterminator advised that the animal may have come in through one of the vents or a hole in the attic. The property management company had a function in the clubhouse two days prior. Everything was fine and the staff reported no prior problems with animals or rodents in the building. The insured advised they had no prior problems with rats or other rodents/animals in the building.

Does the nesting/infestation exclusion in the CP1030 apply to this loss? There is no evidence to suggest prior problems with animals in the building. Damage is in the common area of the clubhouse and would be clear and noticeable. This is not a case of hidden damage that was just noticed per insured. There is no way to know if this one done by one or multiple animals or what “type” of animal caused the damage.

— South Carolina Subscriber

Answer: It is our opinion that the damage was not the result of an infestation. It sounds like an animal or animals entered the clubhouse, chewed up the items you listed, and left. It does not sound like there is any evidence of nesting or infestation, and thus, the exclusion would not apply.

See also:

Insurance questions grow alongside mold, fungi and algae

Understanding debris removal coverage, costs and settlements