A bank robber in a high speed chase from the police and smashed into a tree on the insured's premises. A large limb fell on power lines, and the insured's home sustained a power surge. The insured claims electrical damage to his refrigerator, toaster, and TV.
Notable Timestamps
[ 00:20 ] - The adjuster sees the insured had a standard ISO HO 00 03 05 11. Is there coverage for these household items under that form?
[ 01:35 ] - Trivia time! This 1967 American film starring Warren Beatty and Faye Dunaway follows the exploits of bank robbers in the Depression-Era South.
[ 03:00 ] - Coverage A generally applies, in part, to electronics permanently attached to the realty-- if you turned the house upside-down and shook it, what would NOT fall out?
[ 04:36 ] - Coverage A or Coverage C factors: 1. actual physical annexation to the property, 2. application or adaptation to the use or purpose to which the realty is devoted, and 3. intention (or lack thereof) to make it a permanent installation.
[ 05:11 ] - If the insured was moving to a new home, what would they leave behind? Not the toaster or, with any likelihood, the television. Even wall-mounted televisions are easily removed.
[ 07:00 ] - This refrigerator has an ice maker, so it's linked to the plumbing. It's often not taken upon moving.
[ 07:35 ] - Coverage B only comes into play if you're storing your lawnmower in a refrigerator.
[ 08:36 ] - Sometimes refrigerators are built in to match the surrounding cabinets.
[ 09:30 ] - We'll assume these fall under Coverage C, and that the insured isn't living in that backyard fridge to get Coverage D to apply.
[ 10:30 ] - Proximate cause analysis would apply to this complex chain of causation, but most adjusters would likely give the insured the benefit of the doubt if any named peril played a meaningful role in bringing about the loss.
[ 11:00 ] - Malicious mischief? It's a consideration, but sorry Mike, there are other intervening causes here.
[ 12:05 ] - Going through the options, several named perils might apply: Artificially Generated Electrical Current, Falling Objects, or Vehicles.
[ 13:00 ] - Sudden and Accidental Damage from Artificially Generated Electrical Current sounds like it should apply, but the text says it does not apply to objects with electronic components.
[ 14:18 ] - The Vehicles peril just says "vehicles."
[ 15:00 ] - If the insured is driving, you might run into an intentional loss exclusion issue, and innocent co-insured concerns.
[ 16:00 ] - The insured can get paid for the tree, even though the list of perils is shorter for that particular coverage, because the loss was caused by a vehicle not owned or operated by a resident.
[ 17:35 ] - Tim provides a recap of the scenario and the points above.
Your PLRB Resources
Power Surge Damages Appliances- PCQ.2006.06.01a - https://www.plrb.org/documents/power-surge-damages-appliances-pcq-2006-06-01a/
Artificially Generated Electrical Current (HO77) - https://www.plrb.org/documents/artificially-generated-electrical-current-ho77/
Does Additional Coverage Apply To Tree Struck By Insured Vehicle After Collision?- PCQ.2012.04.17a - https://www.plrb.org/documents/does-additional-coverage-apply-to-tree-struck-by-insured-vehicle-after-collision-pcq-2012-04-17a/
Employees of member companies also have access to a searchable legal database, hundreds of hours of video trainings, building code materials, weather data, and even the ability to have your coverage questions answered by our team of attorneys (https://www.plrb.org/ask-plrb/) at no additional charge to you or your company.
Subscribe to this Podcast
Your Podcast App - Please subscribe and rate us on your favorite podcast app
YouTube - Please like and subscribe at @plrb
LinkedIN - Please follow at "Property and Liability Resource Bureau"
Send us your Scenario!
Please reach out to us at 630-509-8704 with your scenario! This could be your "adjuster story" sharing a situation from your claims experience, or a burning question you would like the team to answer. In any case, please omit any personal information as we will anonymize your story before we share. Just reach out to scenario@plrb.org.
Legal Information
The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.
Music: "Piece of Future" by Keyframe_Audio. Pixabay. Pixabay License.
Font: Metropolis by Chris Simpson. SIL OFL 1.1.
Icons: FontAwesome (SIL OFL 1.1) and Noun Project (royalty-free licenses purchased via subscription).
Sound Effects: Pixabay (Pixabay License) and Freesound.org (CC0).
