Cold and snowy weather during the winter of 2013-2014 set numerous records in many parts of our country. Before the cold and snowy arctic weather could fade out as a distant memory, Mother Nature was back at it—treating some regions to extreme cold and snowy conditions since early fall/ late summer.

With all of the cold weather, we have tracked a rise in claims and see adjusters being tasked with larger caseloads and sometimes handling claims that are not the norm during a mild winter. Property damage during winter storms caused one insurance agent to pose two interesting questions to the FC&S gurus. FC&S is a great resource for public adjusters and agents on insurance issues. This resource is very helpful in giving updates on all types of insurance coverage and offers a question and answer portion on its website.

Take a look at the interesting dialogue from FC&S:

The agent writes:

We have two insureds for whom we need your opinion on separate commercial property losses. Both are covered on the ISO commercial property form, CP 00 10, with special perils, CP 10 30. In the first case, the insured’s building (both exterior and interior) and business personal property sustained loss from "ice damming." The company adjuster is trying to deny all coverage for external damages based on the exclusion for damage from the "weight of ice and snow." What’s your opinion?

Our second insured is a medical office. These doctors rent the entire building but occupy only the first floor of a three story building. During the winter, our insureds turned the heat off in the unoccupied portion of the building. As a result, the pipes in the unoccupied portion froze and burst, causing considerable damage.

The insurer is denying all coverage based on the requirement that the insured must "do [his] best to maintain heat in the building." We believe that because the insured maintained heat in the occupied portion, the loss should be covered.

Here is how FC& S responded:

In the first situation, there should be coverage. The current edition of the special perils form does not exclude damage caused by snow, rain, ice, or sleet except for personal property that is out in the open. There is, however, a clause in the form’s Limitations section that excludes coverage for damage to a building’s interior that results from rain, snow, sleet, or ice. There are two exceptions to this limitation:

There is coverage if the building is first damaged by a covered cause of loss and that damage permits the rain, snow, sleet, or ice to enter the building, and there also is coverage if the loss or damage is “caused by or results from thawing of snow, sleet, or ice on the building or structure.” In the case presented, both the building and personal property were damaged, and the damage was caused not by rain, snow, sleet, or ice but, rather, by the thawing of ice that had built up under the eaves. This cause of loss is covered by the special causes of loss form and should be paid.

In the second case, the insurance company is correct. The standard commercial property program excludes coverage for damage caused by freezing of plumbing, heating, air conditioning, or other such equipment unless heat is maintained in the building. In this situation the policyholder controlled the entire building even though part of it was not occupied. Since the policyholder turned off the heat in that part of the building, there is no coverage for the damage.

Now, your claim may be different—and policy forms are always changing—so it is important to carefully read the policy, question the adjusters on basis, and hire help when needed. The insurance company’s representative should not rely on adjusting rules learned when an earlier policy form that would have excluded coverage was widely used. Stay tuned for more posts on how Old Man Winter impacts our industry.