My client experienced a loss due to a freeze-up of pipes at a property she owns. The single family house was rented to an individual for several years, with the tenant paying for all utilities, including electricity and heating oil. Apparently, the tenant stopped paying for oil delivery; this resulted in an empty oil tank and subsequent freeze-up and bursting of pipes in the plumbing system and ensuing water damage. My client was completely unaware of these events and only discovered the problem when she had the tenant evicted for nonpayment of rent several months later.

The policy in effect is DP 00 03 (o7 88). It excludes freeze-up claims unless ″you have used reasonable care to maintain heat in the building, or shut off the water supply″. Presuming these circumstances are accurate, if a tenant is responsible for supplying oil and fails to do so and a loss occurs, would the exclusion apply?

Massachusetts Subscriber

The exclusion is for freezing only while the premises is vacant, unoccupied, or being constructed, unless the insured has used reasonable care to maintain heat. The property was not vacant; it was occupied, albeit by a negligent renter. Therefore, the freezing exclusion does not apply. The insured reasonably believed that the tenant was paying for and having heat supplied to the house, the way most tenants do. The loss should be covered.

This premium content is locked for FC&S Coverage Interpretation Subscribers

Enjoy unlimited access to the trusted solution for successful interpretation and analyses of complex insurance policies.

  • Quality content from industry experts with over 60 years insurance experience, combined
  • Customizable alerts of changes in relevant policies and trends
  • Search and navigate Q&As to find answers to your specific questions
  • Filter by article, discussion, analysis and more to find the exact information you’re looking for
  • Continually updated to bring you the latest reports, trending topics, and coverage analysis