Question from an IIABNY member: I have a good one for you. We have an insured that lives near a small lake in upstate New York. They have a small shed ("Other Structure") on the property. It is there to store their mower 10 months out of the year, but for 6-8 weeks in the winter when the lake is frozen, they put it on the lake as an ice fish house. If it is vandalized or run into by a snowmobile, would they have coverage under their Homeowners insurance policy? My thought was that since it is now off premises, it is no long an “Other Structure”, but does it then become “Personal Property”? The cause of loss is not so much the question as the location of it. I assume if the ice cracked and it fell in, there would not be coverage for it. They have a $500 Deductible and since it is not very big, it is probably not worth much more than that. What are your thoughts on this one?
Answer: This is SO going to be a blog post…
In the ISO HO-3 (HO 00 03 10 00), Section I – Property Coverage, B. Coverage B – Other Structures states:
1. We cover other structures on the "residence premises" set apart from the dwelling by clear space. This includes structures connected to the dwelling by only a fence, utility line, or similar connection.
The Definitions section of the policy states:
11. "Residence premises" means:
a. The one family dwelling where you reside;
b. The two, three or four family dwelling where you reside in at least one of the family units; or
c. That part of any other building where you reside;
and which is shown as the "residence premises" in the Declarations.
"Residence premises" also includes other structures and grounds at that location.
To be honest, I don’t think this definition helps a whole lot. It includes “other structures and grounds at that location.” It doesn’t use the phrase “at that insured location,” which is too bad because the definition of “insured location” includes “any premises used by (the named insured) in connection with (the residence premises) and (other residence premises shown in the declarations or acquired during the policy term.)” The term “location” isn’t defined, so at best you have an ambiguity in the policy.
You said they live near a lake. If they live on the lake shore, you could argue that the lake is a premises that they use in connection with the residence premises. If the carrier views the word “location” as meaning “insured location,” you could find coverage that way. If the insured has to load it onto a truck, drive it a mile or so to the lake, unload it and push it out onto the ice, that would be a much harder case to make.
I think calling it personal property would be a stretch. A shed just doesn’t fit within the ordinary meaning of that term.
If the lake is in fact an insured location, then there should be coverage for a covered cause of loss, but expect an argument from the insurance company. If the insured doesn’t live on the lake shore, then my guess is that coverage ceases once the shed leaves the roads immediately connected the property.
Theoretically, some kind of inland marine insurance would be in order to cover this. Practically speaking, however, no one is going to want to write a policy on a $500 shed that sits on frozen water for two months each winter (well, maybe not this winter.) That being the case, this might be something your client has to self-insure. I admire his ingenuity, even if the idea of sitting around a hole cut in ice with a fishing pole for hours in the winter is not my idea of a fun time.