Insurance coverage Q&A: The wind, a tree and efficient proximate cause
When wind causes a tree to fall, is resultant water damage covered as a result of the wind damage?
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What follows is a reader’s letter and analysis of the situation brought to you by our FC&S experts:
Windstorm caused a tree to fall onto the dwelling resulting in covered damages. The tree also impacted the foundation resulting in covered damage (cracks). During heavy rains, water was able to enter through the cracked foundation and cause damage to the interior of the building. Our policy does not provide coverage for interior water damage unless there is an opening in a roof or wall created by direct force of wind.
Would the limitation coverage for water damage available for the windstorm peril be applicable in this scenario (no direct force of wind damaged the building causing an opening in a roof or wall)? Or would coverage be mandatory for the interior water damage as the efficient proximate cause is a covered peril (windstorm) as (California insurance) Code § 530 states: “[a]n insurer is liable for a loss of which a peril insured against was the proximate cause, although a peril not contemplated by the contract may have been a remote cause of the loss; but he is not liable for a loss of which the peril insured against was only a remote cause”?
— California subscriber
Is the foundation wall part of the basement or is it completely underground? If it’s part of the basement, I can make the argument that the foundation wall is a wall, and that there should be coverage. Courts turn to a dictionary when terms are undefined in a policy. Merriam-Webster defines wall in part as: Something resembling a wall (as in appearance, function, or effect) especially: something that acts as a barrier or defense; or one of the sides of a room or building connecting floor and ceiling or foundation and roof; or a material layer enclosing space.
The direct force of wind caused the tree to fall, damaging the dwelling and the foundation. The foundation sustained cracks, which let water enter the dwelling. The cracks are therefore openings that let water enter the premises. But for the wind, the tree would not have fallen, there would be no cracks in the foundation and water would not have entered the dwelling. Therefore, the wind is the efficient proximate cause of the damage as it caused the tree to damage the property which led to the water damage, so there should be coverage.
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