Back in November 2012, in the wake of Super-storm Sandy, I wrote about how questions will arise about who pays for the removal of debris that is not owned by them but it is located on their property following the storm. In my post, So I Have A Boat In My Front Yard Following Super Storm Sandy; Will My Flood Insurer Cover The Removal Of It And Other Non-Owned Debris?, I discussed how the Standard Flood Insurance Policy (SFIP) generally excludes land from coverage. I also discussed how questions may arise whether the terminology of the SFIP is ambiguous regarding coverage for removal of non-owned debris that is not on or in the dwelling, but is otherwise on the insured property. This was one of the issues recently decided by a federal trial court in New Jersey related to Super-storm Sandy damaged property.1
In the case, the policyholder’s property suffered damage from Super-storm Sandy, and part of the claim involved removal of non-owned debris that was deposited by Sandy outside the exterior perimeter walls of the building/structure. Article III (C) of the SFIP stated:
We will pay the expense to remove non-owned debris on or in insured property and owned debris anywhere
The trial court ruled a standard flood policy did not cover the cost of removing non-owned debris that was left by Super-storm Sandy outside the insured building/structure. The court granted Liberty Mutual’s motion for summary judgment and held that the policy did not cover the removal of non-owned debris that was not on or in the insured structure. The court reasoned that when the language of Article III (c) is read in the context of the whole SFIP, “debris removal is covered only if the debris is on or in the building.”
According to the court, the SFIP did not cover the expense of removing non-owned debris in the policyholder’s lot or any land outside the perimeter walls of the structure.
This appears to be the first ruling by a court following Super-storm Sandy on the issue of expenses for removal of non-owned debris from property. There may be other rulings on this issue, and we will continue to update on this topic. One question I would pose is why does the SFIP have the words “on or in insured property,” but does not define the term “insured property” and does define building and other key terms. The claim involved non-owned debris on the “insured property,” but not necessarily on or in the “building.” Why would the SFIP say it covers removal of non-owned debris from “on” “insured property” if it were meant to say it covers removal of non-owned debris from “on” the “building”? Is there not an ambiguity when the term “insured property” is not defined in the policy?
1 Torre v. Liberty Mutual Fire Ins. Co., No. 13-6665 (D.N.J. April 24, 2014).
