Please explain the faulty construction exclusion and when this can be used to deny a claim. I have one company that lists this for every claim denial. I recall there being specific reasons when this can be used. Can you help?

New York Subscriber

It depends on the exact situation—it is impossible to provide an answer that fits everything. However, Couch on Insurance,3rd edition, 153:79 states, “Most jurisdictions hold that these exclusions unambiguously prevent recovery for any damages caused by defects in the building materials themselves or by defective work by builders during the construction process.: This is quite a broad exclusion.

While some jurisdictions find the exclusion ambiguous, we could find no cases in New York that support such a premise. In Luttenberger v. Allstate Ins., 470 N.Y.S.2d 988 (1984) the court found that damage caused by eaves that were improperly installed was not covered. The eaves pulled away when snow on the eaves pulled them away from the house. In Derenzo v. State Farm Mut. Ins. Co., 533 N.Y.S.2d 195 (1988), the insured hired a contractor to pour the foundation and basement walls of his house. When structural damage to the foundation and basement walls occurred a year later, the insured filed claim with State Farm for the damages. State Farm disclaimed coverage upon the ground that the defects and damage complained of were excluded from coverage and the court upheld State Farm's decision.