Building Damage Caused by Copper Theft Is Not Excluded

Theft of copper wiring or piping is a loss that impacts many in urban areas, but whether there is coverage for the loss is usually dependent upon the specific language of the insurance policy. This issue was recently addressed by the Tennessee Court of Appeals in Dillon v. Tennessee Farmers Mutual Insurance Company.¹

The insured had purchased a home previously damaged by fire. The insured was not going to occupy the premises during renovations and purchased personal fire and extended coverage insurance policy from Tennessee Farmers. The policy specifically covered “Vandalism or Malicious Mischief” as one of the nine enumerated covered perils. The terms “Vandalism” and “Malicious Mischief” were undefined, but the provision did specifically state it did not apply to loss “by theft, burglary or larceny. But it does apply to damage to the covered building which is caused by burglars.”

During renovations, the insured discovered that the home had been broken into and the intruders cut through the sheet rock and pulled out the wiring of all levels of the home. A claim was submitted to Tennessee Farmers who concluded there was coverage under the vandalism provision and tendered a small check to the insured—although how Tennessee Farmers classified certain damage as “vandalism” was unknown. Following suit, the trial court held that the insured was only entitled to the amounts already paid for “vandalism” because the loss was caused by theft.

On appeal, the appellate court looked closely at the language of the Vandalism or Malicious Mischief provision. Giving the provision “reasonable meaning” in light of all provisions, the appeals court concluded that the cost of the copper wire itself was not recoverable, but the damage to the building caused by the burglars was.
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¹ Dillon v. Tennessee Farmers Mut. Ins. Co., No. E2016-01080, 2017 WL 1536484 (Tenn. App. April 27, 2017).