The question of the month pertains to the water exclusion. A standard feature of property insurance forms is the exclusion of various categories of loss associated with water. The water exclusion clause in the commercial property program and the homeowners policy of ISO excludes loss caused by flood, surface water, water that backs up from a sewer or drain, and water under the ground surface.

The language of the water exclusion clauses has raised many questions and has been the source of many coverage disputes between the insured and the insurer. For answers to coverage questions about the water exclusion and for information on several court decisions on the subject, see the designated article in the Bulletins.

The court cases discussed in the Dec Page deal with the following issues: injuries arising out of the use of an insured motor vehicle; surface water as a cause of loss; the peculiar risk doctrine; and the recovery rights of a mortgagee. In the motor vehicle case, the

Virginia Supreme Court had to decide which, if any, of three auto insurance policies afforded coverage to a deputy sheriff injured while trying to subdue an offender being taken into custody; the key point was whether the injuries arose out of the use of a motor vehicle. In the water loss case, the Washington Appeals Court discussed the meaning of “surface water” and whether such water was the efficient proximate cause of the loss suffered by the insured. The peculiar risk doctrine was reviewed by the California Supreme

Court in relation to a claim of vicarious liability against a general contractor by an independent contractor who was injured on the job site. And, the mortgagee case involved a claim by the mortgagee that the standard mortgage clause in a businessowners policy conferred coverage upon a mortgagee not only for physical damage to the insured premises, but also for loss of rents occasioned by fire at the premises; this is a case from an appeals court in Massachusetts.

Questions and Answers

How many proofs of loss can a carrier require? See Multiple Proofs of Loss Requested. Is there liability coverage available when the insured rents his condominium? See Rented Condominium Liability Coverage. Where in the policy do expenses for additional electricity usage fall? See Repair Costs versus Additional Living Costs.

What is the settlement value of a stolen ring appraised at $13,000? See Settlement Value of Scheduled Jewelry. An insured rents to a relative and the relative pays the mortgage instead of rent. Does this constitute loss of rents when the property is damaged and uninhabitable? See Loss of Rents when Renting to Relative.

Current Motor Carrier Coverage Review

The most recent version of the motor carrier coverage form, CA 00 20 03 10, is reviewed and analyzed in this month's Bulletin. The introductory article in the Auto D.1 pages centers on the symbols used in the form for designating which autos qualify as “covered autos”. See Motor Carrier Coverage Form. Other parts of the motor carrier coverage form are discussed in accompanying articles.

Duty to Defend

This article examines common policy language and the legal implications and findings associated with the insurer's duty to defend an insured. See Duty to Defend. This article is in the General Dut- pages.

State FAIR Plans

This article reviews the various state FAIR plan coverages, supplies contact information, and maximum limits of coverage. See State FAIR Plans. This article is in the Specialty Lines Fai- pages.