Last weekend I attended my college reunion at the University of Notre Dame in South Bend, Indiana. I won’t share how many years it has been since I graduated! During a walk around campus and reminiscing about old times with my friends, I walked into our old dormitory, Welsh Family Hall:
Back home in Florida, my family was preparing for possible Tropical Storm Colin. Standing outside my old dorm, I wondered if there have been any property insurance claims for damages to a college dormitory. In my legal research I found an interesting case out of New York, Viznitz v. Church Mutual Insurance Company,1 where:
[A] fire significantly damaged two dormitories that were used to house students on the plaintiff’s property. The plaintiff, a religious school, had to lease off-site living space for the students for 3 1/2 months. The total rent for that time period was $236,500. At the time of the fire, the plaintiff was covered by a multi-peril insurance policy issued by the defendant. The defendant paid the plaintiff in full for the property damage claim, but only paid $10,000 for the temporary relocation costs to house the students while the dormitories were being restored, based upon a limitation of liability applicable to section 5 of the policy covering “Institutional Income and Extra Expense.”
The Plaintiff argued there was an ambiguity in the additional coverage. However, the court disagreed because the limitation stated that the most the insurance company “will pay under this Additional Coverage for Institutional Income and Extra Expense is $10,000, unless a higher limit is shown on the Declarations Page.” Since there was not a higher limit stated on the declarations page, the $10,000 limit applied and there was no ambiguity.
This case is a good lesson for universities nationwide to review their policies covering dormitories and student housing. In the event of a catastrophe, if the policy contains an extra expense limitation such as that in Viznitz, the university may not be able to recover all costs for temporary relocation of students.