It is probably safe to say that most commercial property coverage forms include a coverage extension that will automatically cover an insured's newly acquired or constructed property for a certain period of time and for a limited amount. The problem is that while a commercial property coverage extension may appear to be activated, closer scrutiny may reveal certain strings attached. The article of the month discusses newly acquired or constructed property and offers more information on that subject. The court cases for this month's issue deal with various subjects.

Underinsured motorists coverage is discussed by the Supreme Court of New Mexico. That court had to decide whether a lawsuit filed by the insured was barred by a limitations provision in the auto policy that required any arbitration or lawsuit to be commenced no later than six years after the date of the policy. The problem was that the policy was written in California and the accident occurred in New Mexico. Since the insured wanted the insurance contract to be retroactively reformed to allow UIM coverage, which state law should prevail?

The question of whether an itemized estimate of flood damage is a definite proof of loss was the issue before the U.S. District Court for the Eastern District of Louisiana. Did the insured comply with the statutory requirements for filing a supplemental proof of loss listed by the National Flood Insurance Program? The insured argued that an itemized estimate of its supplemental claim was sufficient; the insurer countered that such a document cannot substitute for the submission of a sworn, complete proof of loss.

The Fourth District Court of Appeal, California, dealt with other structures coverage. A wildfire damaged the property of the insured and he wanted coverage under both coverage A and coverage B of the dwelling policy. The coverage B limits of insurance were exhausted so the insured wanted the coverage A limits to apply to other structures that were damaged, even though these other structures were separated from the dwelling by a clear space. Is coverage under coverage A separate and distinct from coverage under coverage B?

The last case comes from the U.S. District Court, Idaho. This court examined the vandalism and vacancy exclusion wording in a commercial property insurance policy. The insured was a seasonal water park and damage occurred while the property was closed for two straight summers. Was the building vacant for more than sixty consecutive days before the vandalism damage occurred?

Questions and Answers

How is a protective safeguards endorsement applied to ISO companies? See Protective Services or Devices Issues. Does the 10 91 edition of the ISO Building and Personal Property Coverage Form allow an insured to collect replacement cost when replacing the building at a different location? See ACV versus Replacement Cost.

Should depreciation be applied to demolition, cleaning, and odor control costs following a fire loss? See Depreciation of Labor.

Pollution Liability Coverage

There are two forms available to provide coverage for pollution liability: CG 00 39 and CG 00 40. CG 00 39 provides pollution liability for designated sites; CG 00 40 also provides pollution liability for designated sites but offers limited coverage as opposed to CG 00 39. These forms were revised by ISO in 2013 and the revised forms are discussed and analyzed in this month's issue. See Pollution Liability Coverage Forms.

Home Sharing

Home sharing is another new sharing venture that, similar to ride and car sharing, is becoming increasingly popular. As with other sharing economies, there are insurance issues and implications, as well as state regulations to deal with. See Home Sharing.

Jewelers Block Coverage Form

The jewelers block coverage form is an inland marine specialty form; it provides coverage for a specific type of business. ISO updated this coverage in 2013, and this article reviews those changes. See Jewelers Block Coverage Form.