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D’Orsa and Associates, LLC Public Adjusters offers insurance claims help for damages. Ensuing loss damage coverage is often misunderstood. The law in Florida is consistent with the definition. However, the law is sometimes misapplied and misinterpreted. Let’s begin with the basic definition the Webster’s Dictionary provides: “Ensuing” means “to take place afterward or as a result.” How does this definition apply when interpreting coverage under a homeowner’s or commercial policy?
Generally speaking, an ensuing loss provision does not cover damage to the excluded cause of loss itself (for example: the broken pipe). The provision, rather, covers loss caused to other property, separate from the defective property itself. For example: there may be coverage for water damage which occurs “after or as a result” of a faulty or defective broken pipe. In this regard, coverage for water damage (a covered cause of loss) resulting from faulty workmanship or installation (which may be an excluded cause of loss) is a logical interpretation of the ensuing loss provision in the policy. Recent case-law in Florida explains the ensuing loss provision of a homeowner’s policy as follows: “if the [Insureds] suffer consequential loss as a result of the corroded pipe and that consequential or “ensuing” loss is not excluded under another provision of the policy; then the loss is covered. The root of these cases, and reason there are so many incorrect interpretations of coverage in this context, is the policyholder must show damage separate and distinct from the excluded cause of loss. In other words, where there is an improperly installed drain line or roof flashing, the insured should make the carrier aware those items are not included in the claim. Rather, the water damage or rain intrusion, which occurred and damaged structure components is the basis of the claim. The claim is not for the defective roof flashing, instead the claim is for the damage which occurred as a result of those improperly installed items. For instance, damaged drywall, wood framing, plywood, sheathing, flooring, roof decking, beams, and other items that were damaged “afterward or as a result” of the original faulty construction.
A similar clause provides the homeowner with coverage for losses which flow from an excluded loss, as long as the “ensuing” loss is not also specifically excluded. Thus, the exclusion for “deterioration” means that insurance company is not obligated to compensate the insured for their corroded water pipe. However, if the insured suffered consequential loss as a result of the corroded pipe and that consequential or “ensuing” loss is not excluded under another provision of the policy, the loss is covered. It is important to keep in mind that ensuing loss is covered, even when the loss was originally set in motion by an excluded cause of loss. In other words, ensuing loss is usually an exception to an exclusion. The Court explains: “ensuing losses, if they resulted from a covered cause, are covered under the policy regardless of whether the loss was naturally set in motion by an excluded cause of loss.” The Court concludes: where the faulty workmanship results in water intrusion that subsequently results in ensuing losses, the cost to repair the faulty workmanship is excluded but the ensuing losses from the water intrusion are covered.
Therefore, when dealing with claims that initially seem to be excluded, look further, and determine whether there are ensuing losses, or losses that occur “afterward or as a result” of the initial excluded loss. These damages are separate from the work needed to simply fix the faulty workmanship or lack of maintenance. Finally, it is important to determine whether tear out is needed to access the defective or otherwise excluded condition. If tear out is needed to access the damage, then an ensuing loss provision may help you recover the cost of the tear out, as well as the cost to repair the resulting loss.
D’Orsa and Associates, LLC are Public Adjusters representing only property owners to assist them in achieving favorable results against their insurance companies. D’Orsa and Associates, LLC Public Adjusters analyze insurance claims on behalf of the policyholder and represent the policyholder on a contingency basis. If you don’t get paid, we don’t get paid. Contact D’Orsa and Associates, LLC Public Adjusters for insurance claims help for damages at (877) 742-3587 to discuss any insurance coverage issue.
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