The appeals court noted that the auto policy insuring agreement required the insurer to pay damages for bodily injury or property damage for which the named insured is legally responsible because of an auto accident. Using this wording, the court said that the Hose Company is not a party to the contract between Berlin and Safe Auto. Therefore, the Company is not entitled to first party coverage, and is limited to third party benefits but only to the extent that its use of its resources in the emergency rescue constituted damages, loss, or property damage.

The record demonstrated to the appeals court that the Hose Company did not sustain property damage as defined in the policy. Property damage meant physical damage to, destruction of, or loss of use of tangible property, and costs for an emergency rescue do not equate with the definition. The court held that the Hose Company did not offer any interpretation of the policy language that demonstrated ambiguity. As for the argument of the insured about the emergency costs being consequential damage, the appeals court agreed with the trial court that the expenses of the Hose Company were not damages (either property damage or consequential damage); they were costs associated with rendering emergency services, and even though the services provided a valuable public service, that does not permit any court to “torture the policy contract definitions” to allow recovery in this instance.

Editor’s Note: The standard personal auto policy is not usually required by court to pay for emergency rescue costs even though many fire departments (especially volunteer fire department) do levy a charge for the services. However, instead of relying on the policy definitions—especially, the definition of property damage—in order to deny coverage, insurers might want to consider adding a specific exclusion that addresses the subject.