The Extra Diligent Homeowner
What's the Scenario? with PLRB
A 90 year old red maple hangs over the insured’s house. One of the branches looks like it might fall, and if it does, it’s going to cause some major damage to the sun room. The insured knows this and is a diligent homeowner. One day the weather forecaster says major storms are coming through later in the week – wind and flooding are likely – so the insured hires a tree company to remove the limb safely in advance and also pays to get sandbags down on the low side of his property facing the river. The weather forecaster was right, a big storm came through, but the insured’s...
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A Friendly Fire?
What's the Scenario? with PLRB
Old brick mansion in New Jersey with a fireplace that the insured uses in the winter. During a routine cleaning, the chimney sweep noticed some cracking in the chimney bricks. He says (1) it’s probably due to age and normal use because over time the heat from the fires takes a toll; he says (2) in his estimation the cracking has existed for 3+ years. Notable Timestamps [ 00:15 ] - He encourages the insured to submit an insurance claim anyway. Policy = ISO HO 00 03 05 11. The adjuster knows there is an exclusion for “cracking” but also knows that fire is a covered peril. Is...
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Even Underwriters Make Mistakes
What's the Scenario? with PLRB
The insured is a charitable organization. Times were tough; fundraising was stagnant. The insured was looking to save money, so they asked if they could lower their premiums by canceling their hurricane coverage. The underwriters agreed, and drafted a 1-page endorsement with an exclusion for named storms. Sure enough, the insured got hit with a hurricane the very next month. They submitted a claim anyways, now stating they don’t see any named storm exclusion in the policy. The adjuster looks but can’t find it either. Notable Timestamps [ 00:15 ] - It turns out the insurer forgot to...
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But That Roof was So Old!
What's the Scenario? with PLRB
Homeowner was an elderly widow in Texas who was not keen on moving into a retirement home, so she continued to live in her house by herself. As she got older, a lot of normal maintenance started to get ignored, including the roof – The shingles were old and looked like they were about to fall off any day. One day a windstorm came through the area, and sure enough, 20-30 shingles blew off. She called her insurance company. The adjuster reviewing the file thinks, wind is a covered cause of loss, but wear and tear and deterioration are not. He is wondering what to do when there are multiple...
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Dressing Room Distress
What's the Scenario? with PLRB
At a store, a female patron wanting to try on clothing secured the dressing area with a curtain. Another patron, the insured, engaged in allegedly assaultive conduct by rummaging, feeling, and grabbing the curtain in an attempt to make physical contact with the female patron. The insured also knelt down and used his phone to take videos or photos of the patron under the curtain. Notable Timestamps [ 00:19 ] - At a store, a female patron wanting to try on clothing secured the dressing area with a curtain. However, another patron, (who happens to be our insured) entered the store with various...
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Don't Click Those Links
What's the Scenario? with PLRB
Your friend clicked on a link in a questionable email. Now her computer is locked with a message saying it will unlock if she makes a bitcoin ransom payment. This is causing two problems for her: (1) Her computer doesn’t work now, and (2) She had 10 years worth of family photo albums stored on the hard drive, with no cloud backup. Notable Timestamps [ 00:15 ] - Today’s scenario involves ransomware. The computer wasn’t cheap, and those photos were priceless, so she wants her insurance company to make the ransom payment for her. The adjuster handling the claim is looking to see...
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There's Blood Everywhere...
What's the Scenario? with PLRB
A young couple lives together in St. Pete, Florida. Their friend was vacationing in Italy for a month and asked them to dog sit for her 3 year old pit bull rescue, who had a checkered past but was doing well lately. The couple took in the dog, and one night they threw a dinner party. Out of nowhere, the dog attacked one of the guests, biting him in the leg. In the resulting chaos, blood got all over the expensive white wool carpet. The man got his leg treated at the hospital, he was fine– not suing! – the dog was returned to the shelter and now the couple is making an insurance claim to...
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Oh No, There’s Asbestos
What's the Scenario? with PLRB
A derecho swept through Iowa damaging the insured’s siding, and it’s going to require a complete removal and replacement of the siding. The contractor informed the adjuster that the siding contains asbestos. It wasn’t disturbed by the windstorm and is safe now, but it will be disturbed when it’s removed, so that’s going to have to be done by specially-licensed professionals with hazmat suits according to procedure. The adjuster handling the claim is willing to pay for the siding replacement. However, she is not sure about all of those extra costs to handle and contain the asbestos....
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My Tenants Trashed My House
What's the Scenario? with PLRB
The insured bought a house in Oregon and took out insurance under a 2011 ISO HO3. He lived there for a month, but then moved back to California and started renting out the Oregon house to a local couple. Six months later, the couple disappeared with no trace and the house had been trashed. Walls were dirty; carpet was dirty; graffiti in the bathroom, hole in the bedroom wall; bottles and cans everywhere; dog urine. The insured wanted his homeowners insurer to pay for a full Coverage A cleanup and restoration. Notable Timestamps [ 00:16 ] - The homeowner rented out his house, then returned to...
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DIYer Did Their Own Repairs
What's the Scenario? with PLRB
The insured’s house in Rhode Island was destroyed in hurricane winds. The insured is a natural handyman (although his day job is an accountant), and he decided to rebuild the house himself from scratch, working diligently nights and weekends. Since he has a talent for this, materials & labor only ended up costing him less than the replacement cost estimate but more than ACV. Is he owed ACV, RC, actual cost, or policy limits? Notable Timestamps [ 00:15 ] - The insured’s home undergoes a total loss covered under the standard ISO HO3 with standard replacement cost and Coverage A limits of...
info_outlineAt a store, a female patron wanting to try on clothing secured the dressing area with a curtain. Another patron, the insured, engaged in allegedly assaultive conduct by rummaging, feeling, and grabbing the curtain in an attempt to make physical contact with the female patron. The insured also knelt down and used his phone to take videos or photos of the patron under the curtain.
Notable Timestamps
[ 00:19 ] - At a store, a female patron wanting to try on clothing secured the dressing area with a curtain. However, another patron, (who happens to be our insured) entered the store with various family members, selected a shirt and approached the occupied dressing area. Although the insured was made aware by the patron not to come in, he then engaged in allegedly assaultive conduct by rummaging, feeling, and grabbing the curtain in an attempt to make physical contact with the patron.
[ 01:00 ] - At this point, a store associate provided the insured an alternate location to try on the shirt, which the insured did. But afterwards, the insured knelt down and used his phone to take videos or photos of the patron under the curtain.
[ 01:24 ] - The patron sued the insured for allegedly assaultive conduct in a store. Prior to trial, in her discovery deposition, the patron explained that she tried to laugh it off and make a joke out of an uncomfortable situation by saying "you don't want to spoil your breakfast." According to the patron, the insured's family told the insured not to act that way, and "we kind of giggled and I just tried to shut it down very quickly and said, guys, enjoy your day."
[ 02:00 ] - The insured sought coverage under his HO policy, and the insurer sought a declaratory judgment that it owed no duty to defend or indemnify the insured.
[ 02:40 ] - Special guest Michele Hunter, coverage counsel at PLRB, joins us today to discuss this podcast’s first Casualty topic.
[ 03:37 ] - See AIG Property Casualty Co. v. Anenberg, 2020 WL 4607839 (D. Haw. 8/11/20). This behavior does not seem accidental, but this particular policy defines an occurrence not just as an accident, but as an offense as well.
[ 05:50 ] - Among other charges, the patron claimed Negligent Infliction of Emotional Distress. If one claim triggers coverage, there is a duty to defend for the entire claim.
[ 06:46 ] - The insurer relied on the Intentional Acts exclusion to deny coverage. Courts are split on whether to apply a subjective or objective test in applying this exclusion. For the objective test, the court asks if a reasonable person would consider it an intentional act. The subjective test asks what the insured believed, and Hawaii applies this test.
[ 08:24 ] - However, the insured chose to argue that objectively speaking, his behavior was not intentional. The insured claimed that the patron’s joking response proved he had no intent to harm.
[ 09:20 ] - The court agreed that the insured objectively did not intend harm.
[ 11:30 ] - The majority of relevant case law does not allow the “creative pleading” addition of Negligent Infliction of Emotional Distress to establish coverage, in intentional sexual assault cases.
[ 12:40 ] - The court found that the Sexual Molestation exclusion did not apply because the complaint did not allege the pertinent actions.
[ 13:50 ] - The laughter occurred after the behavior, but this court used it to interpret the insured’s intent anyway.
[ 15:30 ] - Under the typical ISO definition of an occurrence, this would likely not be considered an occurrence.
[ 15:33 ] - Michele provides a recap of the scenario and the points above. This case demonstrates the impact that specific policy language, creative pleading, and individual judges can have on a seemingly clear-cut argument.
Your PLRB Resources
Homeowners Policy Annotation Key 611 Expected or Intended Injury Exclusion - https://www.plrb.org/documents/ho611-expected-or-intended-injury-exclusion/
AIG Property Casualty Co. v. Anenberg (Hawaii 2020 federal district case) - https://www.plrb.org/documents/aig-property-casualty-co-v-anenberg/
Coverage Question: Would a Michigan Court Apply a Subjective or Objective Standard When Interpreting the HO Policy’s Intentional Acts Exclusion? - https://www.plrb.org/documents/would-a-michigan-court-apply-a-subjective-or-objective-standard-when-interpreting-the-ho-policys-intentional-acts-exclusion-1997-09-10/
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/container.cfm?conlink=sec/cq/default.cfm) at no additional charge to you or your company.
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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.
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