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    « When a Carrier Terminates an Agency: Personal Lines Policies | Main | Employers Liability Coverage is Unlimited in New York, Except When It's Not »

    May 09, 2012


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    Mark Griffith

    We had a carrier deny a claim for freezing of pipes in just such a situation based upon unoccupancy. We successfully argued that the insured did use reasonable care to maintain heat. They had set the thermostat at 65 degrees and ordered the usual delivery of propane. Without their knowledge, the real estate agent, showing the vacation home to potential tenants, turned the heat up to 75 degrees. The furnace ran out of fuel prematurely causing the pipes to freeze. The insurer initially argued that the mere fact that the heat went off was proof that the insured did not take proper steps to maintain heat triggering the exclusion. We pointed to the "reasonable" language and finally prevailed.

    Don Reese

    This restriction only applies to the "freezing" of pipes, etc. in the home. There are numerous other NY case law situations in which the court holds that the insurer does not have the right to deny a claim based on their version of "unoccupancy". In addition, there is no common definition of "reasonable care", unless the insurer inserts such a definition.

    Tim Dodge

    Congratulations on winning that battle. Don, I agree, the term "reasonable care" can be nebulous. I'm not a lawyer, but my understanding is that the standard is what an ordinary, reasonable, prudent person would do in that situation. Certainly Mark's insured appears to have met that standard.

    Some carriers have had success denying claims in New York based on the "where you reside" clause, but that doesn't seem to be at issue in these situations.


    This limitation only relates to the freezing of pipe joints, etc. in the property. There are several other NY situation law circumstances in which the trial maintains that the insurance provider does not have the right to refuse a declare according to their edition of occupancy. Moreover, there is no typical description of reasonable care, unless the insurance provider places such a description. thanks for sharing me...

    Kenneth W. Gibbons

    Tim, how does this affect other coverages, when the homeowner abandons the home and the bank keeps paying the insurance premiums? Fire and owner liability? thanks Ken.

    Tim Dodge

    Regarding the Property coverage, the mortgage holder has coverage if it:

    - Notifies the carrier of the change in occupancy or other substantial change in risk of which the mortgage holder is aware
    - Pays any premium due on demand; and
    - Submits a sworn proof of loss within the timeframe specified in the policy.

    With regard to Liability coverage, since the insured no longer resides in the home, it may no longer fall within the policy's definition of "insured location." The policy excludes liability coverage for losses arising from premises that are not insured locations. This implies that the policy would not provide liability coverage for an abandoned home.

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