Windstorm, Explosion, Riot, Aircraft-Vehicle, Smoke, and Vandalism

Introduction

The coverages of windstorm or hail, explosion, riot, civil commotion, damage by aircraft or vehicles, and smoke were the first coverages to expand the standard fire policy. Vandalism was then added. Although these coverages have a long tradition, many of the terms are left undefined in the policies and questions still arise over their meaning. This discussion highlights important issues raised by these coverages. We will focus primarily on the current ISO homeowners forms.

Windstorm or Hail

Most property forms provide coverage for direct physical damage by windstorm or hail. The forms generally do not define windstorm, so the courts are often asked to interpret the policy in light of the particular circumstances of a case. Generally, a windstorm does not mean that winds must be extremely severe, as in a hurricane, or sustained for a certain length of time. It may be enough that the wind gusts in short bursts. Merriam Webster Online defines windstorm as “a storm marked by high wind with little or no precipitation”. Courts often turn to dictionaries when a term is undefined as that is what an insured has access to and will generally use to look up a term. NOAA does not define windstorm; it is not used in meteorology. Appleman's (5-42 New Appleman on Insurance Law Library Edition § 42.01A (2017)) states that courts assess whether or not something is a windstorm by looking at actual conditions instead of types of storms. Several courts have defined windstorm as a wind of sufficient violence to be capable of damaging property by its own action or projecting an object against it. For example strong winds throw a patio umbrella against the side of a neighbors'' house causing damage. There is no standard wind speed used to designate a windstorm.

Both windstorm and hail are usually mentioned together as covered causes of loss, but they are not synonyms for each other. A windstorm may occur at any time of the year in North America, but hail is a by-product of severe thunderstorms, which typically occur when the air is the most unstable; that is, in the spring and summer. Hail, which may fall in pieces as large as baseballs, often occurs in conjunction with tornadic activity.

The homeowners forms differ in the way the windstorm or hail perils provide coverage. Homeowners form HO 00 02 05 11 does not give coverage for damage, either to the interior of a building or to personal property contained in a building, caused by rain, snow, sleet, sand or dust unless the direct force of the wind or hail damages the building. The wind or hail must cause an opening through which the rain, snow, sleet, sand or dust enters. Form HO 00 03 05 11 provides coverage for damage to the interior of a building, but not for property contained in the building unless the wind or hail has created an opening allowing the snow, sleet, rain, sand or dust to enter. The broadest form of all, the HO 00 05 05 11, does not require the evidence of the wind or hail having breached the building for coverage to apply to both the interior of the building and property contained in the building. However, loss to personal property caused by dampness of atmosphere or extremes of temperature is not covered unless the direct cause is rain, snow, sleet or hail.

A case from 1978 points out an interesting paradox between the current HO 00 05 and the earlier homeowners forms, and addresses the meaning of direct. In Riche v. State Farm Fire and Casualty Co., 356 So. 2d 101 (La. App. Ct. 1978), the insured lost fishing equipment when his friend's boat capsized because of wind-driven waves. The HO-2 insurer argued that there was no direct loss caused by wind; the sinking of the boat caused the loss. The court held that “direct loss has been construed to mean the dominant and efficient cause of the loss, as distinguished from a remote cause. It is sufficient to show that the particular peril was the efficient cause of the loss notwithstanding that another cause or causes contributed to the loss.”

The current HO 00 05, which provides open perils coverage for personal property, contains an exclusion for loss under coverage C caused by “collision, other than collision with a land vehicle, sinking, swamping or stranding of watercraft, including their trailers, furnishings, equipment and out board engines or motors.” It may be left for a court to determine whether the exclusion refers solely to the watercraft (and equipment) itself, or whether other personal property is included. It is hard to envision there not being coverage for personal property lost if a cruise ship sank, since there would be coverage if this property were lost in a train wreck or plane crash.

A Nebraska case turned on the meaning of direct, but the verdict was for the insurer, not the insured. The insureds sustained damage to property in their walkout basement when a severe rainstorm (some 4-1/2 inches within an hour) caused water to run down the slope and enter the basement. The insureds argued that wind blew a two-by-four into the basement picture window, and the rain entered through the resulting break. The court said that there was an exclusion for water damage caused by such things as flood and surface water, which had been defined in Nebraska law. In addition, although rain had not been so defined, the common ordinary meaning would not allow the interpretation that what had flowed through the window was still rain. Clearly, what entered the basement was surface water, which was excluded. 

The case of New Hampshire Insurance Co. v. Carter, 359 So. 2d 52 (Fla. App. l978) addressed an occurrence in which rain damaged the interior of a building and the contents therein. However, the insureds had removed shingles to repair the roof, and, when a rainstorm threatened, hurriedly applied tarpaper. The rain leaked around the tarpaper. The court said that clearly the wind had not created an opening; the tarpaper simply leaked. The insureds attempted then to find coverage for the damage as having been caused by falling objects; the court said it was absurd to construe rain as a falling object.

The presence of the stipulation that wind or hail first cause direct damage to a building has been a strong selling point for open perils coverage, because the exclusion would eliminate coverage for damage from seepage around window casings or eaves. These areas may be sound enough for ordinary weather but not for hurricanes or similarly violent storms. For example, ISO homeowners forms HO 00 03 and HO 00 05 exclude coverage for seepage below the surface of the ground, but not otherwise.

Explosion Coverage

Explosion is not defined in the homeowners forms. This can work to the insured's advantage in event of a loss. Merriam Webster defines explosion as “a large-scale, rapid, or spectacular expansion or bursting out or forth”. For example, in the case of Weisman Investment v. The Green Tree Insurance Company, 670 A.2d 160 (Sup. Ct. Penn. 1995), a tenant of the insured used a shotgun to commit suicide. A claim for cleanup costs, repairs, and lost rent was submitted to the insurer, who denied the claim. When the insured filed suit, the court turned to a dictionary, and found that it was at least arguable that explosion could refer to a shotgun blast. Since the word was susceptible to more than one meaning, the ambiguity was construed against the insurer.

Generally, when another peril better describes a loss, then courts tend to look askance at an insured's attempt to force an excluded loss into another covered peril to obtain coverage. In the case of Gellerman v. Allstate Insurance Co., 124 Misc. 2d 882 (New York Civ. Ct. 1984), a pipe broke within a wall of the second floor bathroom, and water flowed into the first floor bathroom and into the cellar. The insurer denied the claim, stating that the insured had purchased a less expensive homeowners policy that did not cover loss resulting from pipe breakage.

The insured said the pipe exploded; the court looked at Couch on Insurance 2d § 42:61, which says explosion is a “sudden and rapid combustion, causing a violent expansion of the air and accompanied by a report or sound.” Therefore, the burst pipe did not meet this definition. Moreover, since the insured agreed he could have purchased a more expensive policy to cover this type of loss, it had obviously, said the court, not been the intent of the parties to the insurance contract to cover a burst pipe as an explosion loss.

The homeowners and dwelling fire forms commonly exclude loss resulting from freezing of plumbing unless the insured has taken reasonable care to maintain heat, or drain the system. When pipes have frozen and burst, allowing water to escape and damage covered property, insureds have sometimes turned to the peril of explosion to cover a loss otherwise excluded. The courts generally take a dim view.

In the case of Ormsby et ux v. The Travelers Indemnity Company of Rhode Island, 601 S.W.2d 779 (Tex. App. 1980), the insureds argued that the freezing and bursting of a copper water pipe that connected to a water heater in their attic constituted an explosion. The jury had found that the commonly understood meaning was a “sudden accidental violent bursting, breaking, or expansion caused by an internal force or pressure which may be and usually is accompanied by some noise.” The burst pipe did not fit the definition. (This particular form apparently did not cover loss resulting from frozen pipes.)

A question raised by explosion is whether an explosion set off to accomplish a friendly result—i.e., purposeful blasting—is covered. It has been suggested that such incidents are friendly explosions similar to a friendly fire, and would not be covered. Damage to property on an adjoining premises by purposeful blasting is not friendly explosion, on the theory of the blasting effect being out of bounds.

Certain explosions are excluded in the homeowners forms. The first of these is volcanic eruption. But if direct loss from fire, explosion (such as if a gas line ruptures), or breakage of building glass results, that ensuing loss is covered. Nuclear explosion is not to be construed as explosion, fire, or smoke for coverage purposes. However, if there is direct fire damage caused by the nuclear reaction, that ensuing loss is covered.

Riot or Civil Commotion

Riot and civil commotion are undefined terms in most policies. Riot coverage usually includes coverage for acts of striking employees while occupying the insured premises and looting at the time of a riot or civil commotion. Reference to civil commotion was not dropped as a result of policy simplification, but the term has been given little attention by the courts. It is hard to imagine a situation that would be called a civil commotion but not also a riot.

Appleman's states that riot and civil commotion refers to temporary outbreaks of unlawful violence which are temporarily destructive, but do not rise to the level of organized rebellion, insurrection or similar actions. Consider spontaneous outbreaks after a court makes a decision in a highly charged case where the people disagree with the ruling.

Many states have a definition of riot in their criminal statutes. Where there is a state riot statute, most courts will apply the common law meaning to insurance cases (not the statutory definition) unless the statute clearly states or implies that the common law meaning has been changed. The common law definition may vary somewhat from state to state, but usually includes the following elements: (1) A tumultuous disturbance of the public peace; (2) by three or more people; (3) who are acting for a common purpose; (4) by the unlawful use of force and violence; (5) resulting in property damage of some kind. Merriam Webster defines riot as “public violence, tumult or disorder, a tumultuous disturbance of public peace by three or more persons assembled together and acting with a common intent”.

If an act of violence against property is done secretly or stealthily, it is not riot (although it might qualify for vandalism coverage). A Mississippi case addressed this point. The insured purchased dwelling fire coverage for a dwelling she rented to tenants, but did not purchase vandalism and malicious mischief coverage. When the insured visited the dwelling to collect unpaid rent, she found substantial damage had been done to the dwelling—doors and front porch torn off, hot water heater removed, carpeting ripped, windows broken out, etc. Although the damage was done by persons who, according to the neighbors' accounts, were dealing in drugs and were generally extremely noisy, the court held that an element of public terror must be present. The fact that the neighbors continued to reside in their homes took the occurrence outside the meaning of riot. Thus, there was no coverage for the loss. (It should be noted, though, that a dissenting judge said there was enough evidence of the events having qualified as riots for the case to be handed over to a jury to determine.) The case is Blackledge v. Omega Insurance Company, 740 So. 2d 295 (Miss. 1999).

Aircraft or Vehicles as Cause of Loss

Coverage for damage by aircraft or vehicles usually encompasses damage to covered property by the physical contact of an aircraft, spacecraft, a self-propelled missile, a vehicle or an object thrown up by a vehicle, or damage by objects falling from aircraft. However, the current ISO named perils homeowners forms do not include a physical contact requirement, so coverage is much broader than under the commercial property program, which makes physical contact a requirement. For instance, glass breakage from sonic boom is covered under the homeowners forms. Further, at least one court has held that there was direct physical loss by vehicles when a home suffered damage from the vibrations on a nearby road (Bly v. Auto Owners Insurance Co., 437 So. 2d 495 [Ala. 1983]).

ISO form HO 00 02 does not cover damage to a fence, driveway or walk caused by a vehicle owned or operated by a resident of the residence premises. Form HO 00 08 05 11 does not cover any damage caused by a vehicle owned or operated by a resident of the residence premises. Note that the vehicle need not be driven at the time of the loss. A parked car belonging to a resident that accidentally rolls into a fence because the brakes have failed still meets the qualification.

The word vehicle is not defined in the homeowners forms. Webster's Collegiate Dictionary defines a vehicle as “a means or carrying or transporting something: conveyance as a: motor vehicle b: piece of mechanized equipment.” Note that a motor vehicle is included within the definition, and includes amphibious as well as land vehicles.

Smoke Damage Coverage

At one time, smoke damage referred only to sudden and accidental smoke from the faulty operation of a heating or cooking unit at the insured premises. In current property forms, sudden and accidental smoke damage from almost any source is covered, except for agricultural smudging (i.e., the use of smudge pots to produce a smoky fire for protecting certain crops from frost, insects, etc.) and industrial operations. However, at least one court has held that the term “industrial operations” does not apply to operations such as a small neighborhood bakery.

Aside from the exclusions for agricultural smudging or industrial operations, smoke damage from any other source is covered if it is sudden and accidental. So, even when smoke comes from off the insured premises, it is covered.

The current homeowners forms include within the peril of smoke “the emission or puffback of smoke, soot, fumes or vapors from a boiler, furnace or related equipment.” The addition of this language clarifies that such damage is to be covered, rather than excluded through use of the mechanical breakdown exclusion or, in the case of the HO 00 03 and HO 00 05, the pollution exclusion. The HO 00 08 contains an exclusion within the smoke peril, though, and that is for smoke from fireplaces. The reason may be that the HO 00 08 is frequently used to insure older homes, where fireplaces may perform regular heating functions rather than serving for decoration or to create atmosphere.

A recent homeowners case addressed the sudden and accidental requirement. The insureds burned decorative scented candles over the course of a holiday season, with the result that the walls and ceiling became darkened with soot. When they submitted a claim, the insurer denied, citing the pollution exclusion, which required that the pollution be sudden and accidental. The court held that “sudden,” even if it includes the concept of unexpectedness, also encompasses a temporal element, because unexpectedness is already expressed by the word “accidental.” Since the candles had intentionally been lit, the resulting damage was not covered. (The court did not address whether the loss could have been covered under the peril of smoke, since the question was not raised. However, if the form required that the smoke damage be sudden and accidental, then presumably the finding would have been the same.) This case is Sokoloski v. American West Insurance Company, 980 P.2d 1043 (Mont. 1999).

Vandalism or Malicious Mischief

Vandalism is commonly defined as “willful or malicious destruction or defacement of public or private property” (Webster's Collegiate Dictionary, Tenth Edition). Although generally there must be some intent to cause destruction of property, this is not always the case. At least one court has held that the vandalism per se need not have been intentional; the “reckless and wanton disregard of the rights of others [is] the equivalent of intent” (Livaditis v. American Casualty Company of Reading, PA., 160 S.E.2d 449 [Ga. App. 1968]). The court cited another case in which an unknown party turned on a water hose that damaged construction work. In Lanza Enterprises, Inc. v. Continental Ins. Co., 142 So. 2d 580 (La. App. 1962), the court stated “It took a deliberate act to turn on the faucet, and under such circumstances the deliberately turning and leaving the water on full force (which would obviously cause damage) evidenced the deliberate intention to damage the building.”

The courts agree that animals are not capable of forming the intent to cause damage. When a deer entered her apartment, causing considerable damage, the insured turned in a claim for vandalism. The court found that animals are incapable of forming the intent to cause damage, and so the claim denial was upheld. (See Roselli v. Royal Insurance Company, 142 Misc. 2d 857 (New York 1989.)   

The current homeowners forms preclude coverage for “vandalism and malicious mischief and any ensuing loss caused by any intentional and wrongful act committed in the course of the vandalism or malicious mischief, if the dwelling has been vacant for more than 60 consecutive days immediately before the loss. A dwelling being constructed is not considered vacant.” (A generally accepted meaning of vacant is devoid of contents and people.) The difference between a property that is vacant and one that is unoccupied is significant and causes much confusion. If the property has all the furniture and appliances for an individual to be able to inhabit the property, it is just unoccupied, and not vacant. A vacant property lacks sufficient contents in order to make the dwelling habitable. Although the current form allows for a longer period of vacancy before the exclusion applies, note that any ensuing loss committed in the course of the vandalism is likely to be excluded as well. For example, if vandals entered a dwelling vacant for some sixty-one days and spray-painted graffiti on all the interior walls, and then proceeded to remove the plumbing fixtures, the insured cannot argue that, while the graffiti is excluded as vandalism, the removed fixtures should be covered as a theft loss.

What happens when an act of vandalism results in an excluded act? The courts are divided in their thinking. In the case of Glover v. Wieder, 6 Pa. D. & C.4th 284 (1990) the policy insuring the insured's mobile home covered vandalism, “meaning only the willful and malicious damage to or destruction of the property covered.” This did not encompass resulting damage to the mobile home when vandals blocked clean-out lines leading from the mobile home park where the home was situated to the main sewer line, and sewage flooded the insured's mobile home. The exclusion for water damage, including water that backs up through sewers and drains, was used to eliminate coverage for this loss. The court held that the vandalism must be intentionally directed at the insured's property and, in this case, it was not.

However, in the case of Bowers v. Farmers Insurance Exchange, 991 P.2d 734 (Wash. App. 2000), the tenants of the insured dwelling diverted all the heat to the basement and sealed the windows. The resulting buildup of moisture caused mold to grow. The insured turned in the claim for warped paneling and cleanup of the mold damage. The warped paneling was replaced, but the insurer denied coverage for the mold cleanup, citing the mold exclusion. The court looked to Livaditis (above), and said it was enough that the perpetrator was guilty of “wanton or intentional disregard of the rights of others.” The efficient proximate cause of the mold damage was vandalism, a covered cause of loss, and so the cleanup was covered.