Homeowners and Personal Auto Policy—Loss Covered by Both?

Our insured borrowed a pickup from his father-in-law, which had a utility trailer attached. He then went to his sister-in-law's home to borrow a riding lawn mower. On the way back to his home, the trailer came loose from the pickup, flipped, and damaged both the mower and the trailer.

Our insured has both his homeowners and auto policy with the same insurer. They paid $200 for damage to the mower, but the damage turned out to be more than that. Now they are stating they should not have paid anything, since there is no coverage for a motor vehicle.

Is that correct? Is the mower covered under the insured's homeowners policy? What about the trailer?

Illinois Subscriber

The homeowners and auto policies mesh to provide coverage for this loss. First, the non-owned trailer. Coverage is under the physical damage section (part D) of the insured's auto policy. The utility trailer meets the definition of a "non-owned auto." If the insured has collision coverage on his personal auto policy, then the collision coverage applies to the trailer. However, the limit of liability for the loss is $500 for a non-owned trailer, and, if the father-in-law has insurance, your insured's coverage is excess.

 

The homeowners policy is the place to seek coverage for the damage done to the riding mower. The coverage C—personal property insuring agreement promises "we cover personal property owned or used by an insured while it is anywhere in the world." The mower is not excluded from coverage because it is a motor vehicle, since vehicles used to service an insured's premises are exempt from this exclusion. The cause of damage to the motor was "vehicles."

It appears the insurer has looked to the $500 "good will" payment for damage to property of others in section II liability; but note the lead-in language: "We will not pay for 'property damage' to the extent of any amount recoverable under Section I of this policy." This loss properly falls under section I, not section II of the homeowners policy.

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