WIN Magazine - Fall 2013 - (Page 22)
WHEN IS AN
CURRENT LEGAL ISSUES IN HOMEOWNER’S INSURANCE
BY RICHARD S. PITTS, ESQ.
OME IS WHERE the heart
is…” is a lovely old adage.
It doesn’t solve homeowner’s insurance coverage
problems, however, especially when the issue is
whether a residential structure is “vacant” or “unoccupied.” A pair of decisions, one quite recent, illustrates
some of the difficulties sporadically occupied homes
create for coverage.
Chow v. Merrimack Mutual Fire Insurance Co.
was decided by the Massachusetts Appeals Court of
Massachusetts in May of this year. For nearly twenty
years, Mr. Chow had owned a home in Northampton that
he used as a place for his restaurant employees to live.
Mr. Chow lived in New York, but had the residence’s care
and maintenance handled by the restaurant manager,
who also lived in the residence.
Eventually, the manager moved away, and so, too,
did the employees. In December, 2006, while apparently
planning to close the restaurant, Mr. Chow met with
the restaurant’s manager and told him to set the home’s
electric baseboard heater thermostats to sixty degrees.
January of 2007 apparently brought three things: cold
weather to the northeast, frozen and burst pipes to the
Chow residence, and complaints about the house to the
local building inspector. Furniture, fixtures and carpet
2 2 | v i e w t h i s i s s u e a t | www.aamgawin.org
CAUTION AND CARE ARE WARRANTED
IN ANY FACTUAL SITUATION INVOLVING
UNUSUAL USES OF RESIDENTIAL PROPERTY AND THE PROSPECT OF A “VACANT”
OR “UNOCCUPIED” INSURED LOCATION.
were waterlogged; the ceiling collapsed. Icicles formed
off the home’s exterior. The thermostats were turned to
“off.” The inspector had the house condemned.
Merrimack declined to pay the loss, citing exclusionary in the policy. Merrimack’s policy excluded loss:
2. Caused by
a. freezing of a plumbing, heating, air conditioning
or automatic fire protective sprinkler system or
of a household appliance, or by discharge, leakage or overflow from within the system or appliance caused by freezing. This exclusion applies
only while the dwelling is vacant, unoccupied or
being constructed unless you have used reasonable
(1) Maintain heat in the building; or
(2) Shut off the water supply and drain the system
and appliances of water…
The overall structure of this language from the
Insurance Services Office (ISO) HO 03 and HO 05 forms.
Table of Contents for the Digital Edition of WIN Magazine - Fall 2013
Mind the “Talent” Gap: Attracting Students and Young Professionals to the Wholesale Insurance Industry
How We are Educating the Wholesale Insurance Industry Leaders of Tomorrow
Writing Commercial Property Insurance Profitably
When is an “Unoccupied” Home Really “Vacant?”
Successful Negotiating Skills for Wholesale Insurance Professionals
Writing the General Liability Line of Business
5 Metrics to Manage Underwriting Operations
ORSA: The Clock is Ticking
In the WIN-ner’s Circle
INDEX TO ADVERTISERS/ ADVERTISERS.COM
WIN Magazine - Fall 2013