Triggering Exception to Exclusion for Purposes of Property Insurance Coverage

Here is an example of the (attempted) application of an exception to an exclusion.

Rainwater Exclusion: A property insurance policy has a rainwater exclusion that says the insurer will not pay for damage to the interiors of any building, or personal property in the building, caused by rain.  

Exception to rainwater exclusion: But, the insurer will pay for damage to the interiors cased by rain if the building first sustains damage by a covered (insured) loss to its roof or walls through which the rain enters the building.

In a case where a tropical storm caused extensive rainwater damage to the interiors, the insured wanted to trigger the exception to the rainwater exclusion. Otherwise, the rainwater damage would not be covered under the property insurance policy. The insured argued that the tropical storm first caused damage to the building’s roof and walls and this damage (a covered loss) allowed rain to enter the building in order to show the exception applied.

The problem was that the insured did not have sufficient evidence, from an expert opinion or otherwise, to support that the tropical storm first caused damage to the building’s roof or walls and it was this damage that allowed rainwater to enter. Without this evidence, the insured had nothing to trigger the application of the exception to the rainwater exclusion. Thus, insurance coverage was denied based on the rainwater exclusion.

Exclusions in insurance policies and exceptions to exclusions can be confusing and complicated. Engage an attorney to help you present your theme that best enhances your ability to recover insurance proceeds.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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