An insurance policy is a contract. In disputes involving contracts, it is nearly always the terms and conditions of the contract that will govern. Contracts set out the rights and obligations of the parties involved. Therefore, it is essential to read all the provisions of the contract in their entirety.

Recently, I had a client receive a denial letter for water damage to their home. The family dog chewed through a water pipe attached to an appliance causing major water damage.

After the initial field adjuster’s inspection, a denial letter was sent quoting the following exclusion:


We insure against risk of direct loss to property described in Coverages A and B only if that loss is a physical loss to property. We do not insure, however, for loss:


2. Caused by:


(8) Animals owned or kept by an ‘insured.’

At first glance it appears that this insurance policy specifically excludes the type of loss my client suffered. “We don’t insure, however, for loss: Caused by: Animals owned or kept by an ‘insured.’” Reading the full endorsement, however, revealed the following language:

If any of these cause water damage not otherwise excluded, from a plumbing, heating, air conditioning or automatic fire protective sprinkler system or household appliance, we cover loss caused by the water including the cost of tearing out and replacing any part of a building necessary to repair the system or appliance. We do not cover loss to the system or appliance from which this water escaped.

This denial was likely due to a mere mistake by the adjuster who failed to read the full endorsement. To the insurer’s credit, this claim was quickly paid when the language providing coverage was brought to their attention. This situation does serve as an important reminder to read contracts as a whole. If you receive a denial letter and want your insurance policy reviewed, please contact Merlin Law Group for attorney review.