The question of the month pertains to a number of items common to daily living that cause difficulty to insurers and insureds because it is not certain whether damage to such items should be covered by insurance on the building or on the contents. Wall-to-wall carpeting, and to a lesser extent, draperies or curtains, and lighting fixtures continue to be a particularly active subject of discussion and dispute. And, even when there is no question that the loss is covered, other issues can arise.

For answers to questions about proper coverage for wall-to-wall carpeting, drapes, and lighting fixtures, and for reports on court rulings concerning the appropriate coverage, see the designated article in the Bulletins.

The court cases in this month's Dec Page come from Texas, Mississippi, Tennessee, and Kansas .

The Texas case is one from the Texas Supreme Court and deals with the issue of whether a landowner owes a duty to recreational users to warn or protect the users against the danger of a naturally occurring condition. The case offers information on the subject of premises liability and the standard of care owed by the owner to those who come upon his property. The case in Mississippi is a federal court of appeals case decided under Mississippi law. It addresses the issue of an unemancipated minor and under whose insurance policy he is considered to be an insured, the policy of the mother or the policy of the father. The definition of theft is the subject of the Tennessee case. Here, a former employee kept a truck he had leased from the employer when the employer wanted it returned. The employer claimed a theft loss but the insurer said it was a conversion and a conversion is not a theft. The appeals court in Tennessee resolved that issue. The final case comes from Kansas where the United States District Court took notice of five factors that the Kansas Supreme Court had adopted in determining whether a denial of coverage equals a bad faith action by the insurer.

These five factors offer guidelines to help prevent bad faith claims from arising.

Questions and Answers

Should an insured who is upgrading a sprinkler system insure the client's fine arts under a builders risk policy? See Care, Custody, or Control Issue under Builders Risk Policy. Are items used to maintain a golf course considered mobile equipment? See Mobile Equipment or Business Personal Property?

Is a building considered vacant from the current owner's standpoint if it was vacant when purchased? See Vacancy Provision at Center of Coverage Dispute .

Watercraft Policy

The Insurance Services Office (ISO) offers a Watercraft Policy, WT 00 01 01 10, which provides a comprehensive property and liability program for personal lines watercraft, including bodily injury and property damage liability coverage, medical payments coverage, and physical damage coverage. For a discussion of the policy, see Watercraft Policy.