With Spring a week away, coming off a mild winter, fewer homeowners experienced the frozen pipe burst losses as did in years past. One of the main questions that dominate a frozen pipe case, especially if the property is left vacant for a period of time, is whether the insured used reasonable efforts to maintain adequate heat. I’ve deposed many corporate representatives of different insurance companies and it is very difficult to get anyone to go on record to give a definitive answer. So, what is the standard?
As you are probably aware, the standard varies from state to state. Thanks to Emily Kaminska at the firm, Sloane & Walsh, we have a state by state summary of the relevant case law for some of the states.
In New York, current precedent (at least in the 3rd Department) is set by Stephenson v. Allstate Indemnity Company, 160 A.D.3d 1274 (3rd Dept. 2018). In Stephenson, homeowner and decedent, Gloria Thornhill, brought a breach of contract action against her insurer, Allstate, who disclaimed coverage for water damage caused after a pipe froze and burst. After discovery, Allstate moved for summary judgment claiming coverage was precluded by an exclusion in the policy for losses caused when a plumbing system freezes while the insured premises are unoccupied (i.e., failure to maintain adequate heat at a vacant property). The court noted that an insurer bears the burden of establishing that the exclusions or exemptions on which it relies apply in the particular case.
Once the insurer does this, the burden shifts back to the insured to rebut the insurer’s allegations. Specifically, in this claim, the insurer deposed the plaintiff who testified that the decedent left the property unoccupied during the winter months without making any arrangement to have it inspected during her absence to ascertain whether the heating system was functioning. The plaintiff argued their lawn and snow maintenance man said the “premises were always heated” and that he “never noticed that the heat was off,” were insufficient to rebut defendant’s evidence that included heating/gas bills showing a lack of usage for the winter months.
The court concluded the plaintiff failed to use reasonable care to maintain heat at the premises because it was undisputed that she did not arrange for inspection of the premises or take any other action to ensure that adequate levels of heat were actually maintained during the time period.
I leave you with a quote from former President Ronald Reagan: “When you can’t make them see the light, make them feel the heat.”