Q
Our client is insured on an HO 00 03 04 91. Recently, he had a partial fire loss. The kitchen and adjoining dining room suffered fairly extensive damage.
During the course of repairs, the insured and his family lived in temporary housing nearby. Supplies for the repair were located on the insured's porch. In the course of the work, a hutch from the dining room was moved to the porch to enable the contractor to continue the work. One night some of the building supplies, as well as the hutch, were stolen. The insurer is denying coverage for the supplies, citing “we do not insure for loss caused by theft in or to a dwelling under construction, or to materials and supplies for use in the construction until the dwelling is finished and occupied.” Coverage is also being denied for the hutch, using the exclusion found under the “theft” peril for personal property—”in or to a dwelling under construction, or of materials and supplies for use in the construction until the dwelling is finished and occupied.”
We have never experienced these exclusions being applied under these circumstances. Is the insurer correct?
Pennsylvania Subscriber
A
A complete reading of the policy shows that coverage is to be provided under the circumstances you describe. The insuring agreement under coverage A—Dwelling states “we cover materials and supplies located on or next to the “residence premises” used to construct, alter or repair the dwelling or other structures on the “residence premises.” In other words, three possibilities for coverage of materials and supplies are mentioned: construction, repair, or alteration. That each of these is different from the others is clear, as consultation with any desktop dictionary indicates. Quoting from Webster's Collegiate Dictionary, Tenth Edition, to construct is “to make or form by combining or arranging parts of elements: build.” To alter is to “make different without changing into something else.” To repair is to “restore by replacing a part or putting together what is torn or broken: fix.”
The exclusions for theft “in or to a dwelling under construction” therefore do not apply. The dwelling is being repaired, not built. Further, the insured's being unable to reside in the dwelling during the course of repairs does not constitute a state of unoccupancy. The insured intended to return to the dwelling. It was his normal place of abode, containing his household goods and personal effects.
Since the dwelling is not under construction, there is coverage for the theft of the supplies and the hutch.
This premium content is locked for FC&S Coverage Interpretation Subscribers
Enjoy unlimited access to the trusted solution for successful interpretation and analyses of complex insurance policies.
- Quality content from industry experts with over 60 years insurance experience, combined
- Customizable alerts of changes in relevant policies and trends
- Search and navigate Q&As to find answers to your specific questions
- Filter by article, discussion, analysis and more to find the exact information you’re looking for
- Continually updated to bring you the latest reports, trending topics, and coverage analysis
Already have an account? Sign In Now
For enterprise-wide or corporate access, please contact our Sales Department at 1-800-543-0874 or email [email protected]