Chomp, Chomp!

Insurance Policies are designed to cover sudden and accidental loss and damage. Mary Wischusen, 77, believed that she had a suffered a sudden and accidental act of nature and that coverage would be afforded when a gator came crashing into her kitchen. This 11-foot alligator was not her domestic pet or a planned guest, but her insurance company has denied the claim.

The Miami Herald reported about this Florida loss and stated that Florida Peninsula Insurance was denying the claim. While the policy would need to be studied to see if Ms. Wischusen had coverage under her contract, this has spurred some interesting coverage discussions. Most importantly, having a gator come into your house and cause damage is about as sudden and surprising as it gets. Policyholders can anticipate they may have an insurance claim for damage to their home at some point but damage caused by a gator is nothing short of shocking! Ms. Wischusen went on record arguing that the damages should be covered because she considered it an act of nature.

Here is what was reported:

First an alligator came crashing through her window. Now what?

Authorities believe the alligator saw its reflection in the window in May during mating season and rushed over, apparently finding itself rather attracted to itself.

But instead of snagging a mate, the large gator ended up in the woman’s kitchen and began thrashing about, breaking wine bottles and damaging her walls. At 11 feet long, it was almost the entire length of her kitchen counter.

‘He just wanted a good time. … I was stunned but happy no one was hurt,’ Wischuen told the Miami Herald.

The carrier appears to be relying upon a reptile exclusion. But before you think this is a clear-cut loss, analysis is required. If we had the policy, we would need to look at the grant of coverage for her home and then look to see if Florida Peninsula can support applying an exclusion.

Bill Wilson suggests a disciplined structure to such a coverage analysis in When Words Collide: Resolving Insurance Coverage and Claims Disputes. This is Wilson’s basic ten step method of insurance interpretation:

Policy Interpretation Doctrines

1. Insurance is NOT a commodity.

2. RTFP!

3. Don’t accept a claim denial as gospel.

4. The purpose of insurance is to insure.

5. All parties have a duty of utmost good faith.

6. Most insurance policies are contracts of adhesion, so insuring agreements are interpreted broadly, exclusions narrowly, and ambiguities in favor of insureds.

7. The burden of proof in determining coverage rests with both parties in the insurance contract.

8. Exclusions must be clear and conspicuous.

9. The duty to defend is broader than the duty to indemnify.

10. Folklore is not fact.

Chip Merlin did an analysis on coverage for damages caused my other animals in a post last year: A CATastrophe! Is Damage Caused By Pets Covered?

A CATastrophe! Is Damage Caused By Pets Covered?

If you consider Bill Wilson’s 10 steps and have the benefit of reading the policy, analysis would likely consider if there are conflicting policy provisions that create an ambiguity, or whether there is an ensuing loss. The article mentioned broken wine bottles and that liquid may have caused damage of its own if it escaped from the bottles. The article didn’t list whether the alligator caused any other kitchen damages but an attack on a kitchen could all kinds of “tail” issues.

In discussion forums, some have argued that the vandalism provision may provide coverage for the loss. Surely, the same damage would have been covered if the damage was caused by a person busting in. But others have chimed in that alligator losses are point blank considered reptiles and reptile damage is an exclusion under many the standard ISO form for a homeowners policy.

Before any lawyer gives a final answer about their coverage opinion, the full evaluation of the policy and damages in particular would be required but one thing is for sure, this is a shocking cause of loss that no one wants happening at their home.

  • David Thompson, CPCU

    This is a classic case of: 1> Not having all the facts, and 2> media hype disparaging insurance companies.

    Certainly, no one except the claims adjuster most likely has all the facts, mainly the specific policy. That said, based on my 33+ years in the insurance industry, I’m betting a rack of ribs the next time I fire up the smoker that the claim was correctly denied.

    Assuming that the policyholder had a standard ISO type policy that was mentioned in the blog (referred to as a HO-6 policy) the damage to personal property (Coverage C) is defaulted to a “named peril” basis. An option does exist of “open peril” (referred to casually as “all risk”) but not all insurers offer that, and few consumers will pay the 10% more for better coverage. In such policy, for damage to personal property to be covered, one step as was pointed out is to look at the grant of coverage. The HO-6 lists 16 covered perils…such as fire, theft, and windstorm to name a few. There is no peril listed that provides coverage for an alligator, or any other animal for that matter. Arguing “vandalism” is a long shot. A New York court agreed with the insurer when damage done by a deer was denied. The court said that was not vandalism. (Roselli v. Royal Ins. Co. of Am., 142 Misc. 2d 857, 538 N.Y.S.2d 898 (Sup. Ct. 1989)

    Relating to damage to the glass and interior walls, Florida statute 718.111(11) and the ISO CP 00 17 – Condominium Association Form are clear: The association policy provides primary coverage for these buildings. Assuming that policy has the CP 10 30 – Special Causes of Loss Form, there is no exclusion for that damage. If damage was below the association deductible, the same statute states that the damage is a common expense, meaning the treasure writes a check for the repairs.

    Concerning this:

    – – – – – – – – – – –
    But others have chimed in that alligator losses are point blank considered reptiles and reptile damage is an exclusion under many the standard ISO form for a homeowners policy.
    – – – – – – – –

    The word “reptile” does not appear in the ISO form and to my knowledge it never has.

    Again, admitting that I don’t have all the facts, the denial seems to be correct. It’s unfortunate that the media and others didn’t seek to get all the facts so that the story could be accurately reported. But, situations like that (when a claim is correctly denied) seldom make the news.

    • Stephen Sarasohn

      I didn’t see where the article mentioned if this was a condo or a single family home. If insured on named perils basis, establishing coverage would be tough. Vandalism requires intent. The burden of proving the named peril would fall on the insured and proving intent would be tough. In fact, by the insured’s own words, “..He just wanted a good time” (LOL). If this was insured on an all risk basis, I think there could be coverage. I don’t see a “reptile exclusion” in any of the policies I have in my office. The newest Florida Peninsula policy is 4 years old and doesn’t contain such an exclusion but that may have changed.