Windstorm Policy and Fire Following Power Failure

Our insured has a windstorm policy only. When Hurricane Wilma hit in October, 2005, it took down a large tree in the insured's yard, as well as the power line. Power was out throughout the area from October until November 9. When the power company restored the power, the house caught fire.

We turned in a claim, but it was denied. We think that the proximate cause was the hurricane that took the tree and wire down; had this not occurred the power would not have had to be restored and the fire would not have occurred. The "power failure" exclusion says that any ensuing loss to property not otherwise excluded is covered, so we think the ensuing loss—the fire—is covered.

Please give us your opinion.

Florida Subscriber

The Florida windstorm only policy promises to pay for "direct physical loss to property" caused by the perils insured against. But the only perils insured against are hurricane (other than flood, related storm surge, etc.), tropical storm, other windstorm (such as tornadoes) and hail.

The exclusion for power failure states that if power failure results in a peril insured against, that ensuing peril will be covered. However, because the policy covers only loss by windstorm, that ensuing peril would have to be windstorm. In any event, it appears the power loss occurred on, not off, premises.

Although not in the contract, the "outline of coverage" page included with the policy clearly states the policy "does not protect you against other perils such as fire or lightning."

The only possible approach the insured might take is to convince the windstorm property insurance corporation, which issued the policy, that he reasonably expected that all losses flowing from the hurricane—such as falling tree, power loss, restoration, and resulting fire—would be covered.

 

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