Auto fire results in incidental expenses. Is there coverage?

Coverage Q&A: The New York State Thruway Authority submitted a bill to the insurer for expenses related to the insured's auto loss.

This week’s Q&A concerns expenses incurred by the NYS Thruway Authority related to a covered auto loss (Photo: Daniel Avram/Adobe Stock)

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Editor’s Note: This week’s question concerns the costs associated with an accident, including who is responsible for paying those expenses and if there is coverage under a business auto policy.

Question: We have a claim on a business automobile policy (BAP). The loss was a result of an incidental mechanical fire when the insured’s equipment (the brakes) overheated and caught the trailer and excavator on fire. The insured was up-to-date with maintenance, inspections and registration. The insured advised there were no recent repairs done to the trailer within the past year. Additionally, there were no recent issues with the trailer at all. In effect, the fire was completely incidental and unpreventable.

Fire loss is covered under the insured’s comprehensive coverage and would be considered a no-fault, comprehensive loss.

The New York State Thruway Authority submitted a bill to the insurance carrier for lane and shoulder closure and to provide protection for fire and EMS personnel.

Per the adjuster, the policy pays for property damage or bodily injury that the insured legally owes as a result of an accident. Unfortunately, the charges do not constitute either property damage or bodily injury as they are defined in the policy; thus, we cannot provide payment for this bill. What is your opinion on this claim?

— New York Subscriber 

Analysis: When there are incidental expenses that arise in connection with property damage and bodily injury following an auto accident, it isn’t always clear whether they should be considered as part of the damages.

Answer: To learn the answer to this week’s coverage Q&A, please log into your FC&S Expert Coverage Interpretation account.

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