Our insured has commercial property coverage on a special causes of loss form. During Hurricane Ivan, a tree that is located across the street from our client's office fell on the power lines. The power line runs to the insured's property; the wire to the insured's property was pulled loose but not pulled down. None of his electrical appliances would work following the tree falling on the lines. The insurer denied the claim. The insurer found the wire going into the building had been reconnected by the power company, but the masthead on the pole had not been repaired, causing low voltage in the building. The insurer states that the low voltage caused the loss and that the policy excludes loss or damage caused by artificially generated electric current, including electric arcing, that disturbs electrical devices, appliances, or wires. Shouldn't the damage to the electrical appliances be covered?

Alabama Subscriber

A loss caused by low voltage would not be covered by the special causes of loss form. The CP 10 30 04 02, causes of loss—special form, states that the following is excluded from coverage: "The failure of power or other utility service supplied to the described premises, however caused, if the failure occurs away from the described premises. Failure includes lack of sufficient capacity and reduction in supply." It appears that the power failure in this instance occurred away from the premises, and thus, the loss would not be covered.