Glass Loss Deductible Application

Q

How is the deductible applied to a glass loss that is covered under a special causes of loss form in the ISO commercial property program? I am an adjuster and had not been applying a deductible to glass losses that fell solely within this area of coverage. However, my new claims manager has indicated that the policy deductible should be applied to these losses just as they are applied to other types of losses.

If I have three panes of glass broken by vandals, the loss payment would be limited to $300 because of the $100 per pane limitation. However, if there is a $250 policy deductible, the payment would be reduced to only $50. Somehow that doesn't seem quite right. What are your thoughts?

Illinois Subscriber

A

The special causes of loss form—CP 10 30 04 02—provides no more than $500 in any one occurrence for loss of or damage to building glass. The coverage also is limited to $100 per pane, plate, or other unit of glass. The limitation does not apply to loss or damage by the “specified causes of loss” except for vandalism, or to business income or extra expense coverage.

Initially, it may seem that the policy deductible should not be applied, especially given the situation you describe. However, the glass coverage is a limitation of coverage, not an extension of coverage, and there is no provision to negate application of the deductible. Therefore, the normal policy deductible should be applied to glass losses that fall solely within this coverage section.

Keep in mind that the glass limitation does not apply if the damage is caused by a specified cause of loss other than vandalism. Thus, there is no per pane and per occurrence limitation to glass losses resulting from a cause of loss such as fire. Insureds that carry separate glass insurance also would not be affected by this limitation, at least to the extent that their separate glass insurance applied to the glass that was damaged.

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