Minnesota Subscriber

A

This exclusion, in the 1991 edition of the HO 00 03, and its application to losses, has led to much confusion. The 1984 HO-1, HO-2, and HO-3 contained the exclusion of coverage for “constant or repeated seepage or leakage of water or steam over a period of weeks, months or years from within a plumbing…system.” This exclusion was deleted from the 1991 editions, but the exclusion for wet rot remained in the HO 00 03. This sets up the possibility that the homeowner with “open perils” coverage is worse off than the homeowner with “named perils.”

Explanatory material from ISO indicated that, with the deletion of the 1984 exclusion from the 1991 edition, coverage would apply unless the insured took no action to protect the property once the water damage became visible. Webster's International Dictionary defines “wet rot” as “a decay of timber by fungi that attack wood having high moisture content.” Since “decay” is a process occurring over time, this provides the insured with the window of opportunity to rectify the damage. Further, the wet wood must be “decayed” and not just “wet” for denial of coverage.

Unfortunately, in your insured's case, when the damage first became visible, he should have had the wet patch checked. Had he done so, the loss would have been covered. As it stands, the company is correct in denying coverage.