Here in Texas, we have been having a cold weather snap and it’s caused many to have concern that they might have a pipe freeze and result in a big mess. What does it mean for you?
The answer is that it depends. It always depends on what coverage you have and if you don’t know, you need to have an agent who does know.
There are many different ways a policy can be written in Texas and some policies may exclude damages like a frozen pipe. This is when it’s good to have an independent insurance agent who reviews your coverage every year and keeps an eye out for problems like this.
Here is some additional information from the IIAT:
Frozen Pipes and Resulting Water Damage
David Surles, IIAT Insurance Agency
The freezing temperatures last week affected the entire state – from Brownsville to Dalhart – but the unusually low temperatures in some areas caused water to freeze in unprotected pipes. The frozen water expanded pipes to the breaking point, resulting in the sudden release of water when the temperatures warmed up. This will be a significant loss event for Texas insurers, with damages in the hundreds of millions of dollars. The losses will include the costs to access and then repair or replace broken plumbing, in addition to damage to buildings and personal property caused by the water. Is it all covered? If the policy covers freezing, the cost to access and repair or replace the plumbing will generally be covered. If the policy covers water damage, the water damage losses will be covered. As usual, however, actual coverage depends on what kind of policy the insured has purchased and how insurers interpret certain causes of loss and exclusions. We’ll take a quick look at covered causes of loss on different policies first, and then look at some exclusions that may be troublesome.
Commercial Property Policies. The ISO commercial property program includes three causes of loss forms – Basic, Broad and Special. The insured may purchase one cause of loss form on building items (such as the special form) and a different form on the personal property (such as the basic or broad form). Basic form: no coverage for water damage or freezing. Broad form: covers water damage but not freezing. Special form: covers open causes of loss (“risks of direct physical loss”), including freezing and water damage.
Residential Property Policies. Texas HO-A: No coverage for water damage or freezing. Texas HO-A with enhancing endorsement (HO-470T or equivalent): covers freezing and water damage (unless the origination point for the break is below the surface of the ground or within or below the slab or foundation). All other Texas and ISO forms: cover freezing and water damage.
Troublesome Exclusions. All of the policies that cover freezing and/or water damage contain exclusions that may be trouble for some policyholders, depending on the insurer’s interpretation of these exclusions. Changes in or extremes of temperature: The exclusion for “changes in temperature” (found in policies providing open causes of loss) was interpreted in one court decision (Aetna vs. Fritz New, 1995, Dallas Court of Appeals) as having “no relationship to what the temperature is at any one time. It only refers to the difference between a temperature at a given moment and the temperature at a subsequent given moment… Hence, the exclusion must refer to damages caused by a difference in temperatures.” When freezing is clearly covered by the policy, the exclusion can’t refer to loss caused by freezing. Likewise, freezing can’t be considered “extremes of temperature” unless perhaps recorded weather data indicates the temperature that caused the loss was not subject to regular recurrence over a number of years (see Blaylock vs. American Guarantee, Texas Supreme Court, 1982). Reasonable precautions: Policies exclude loss caused by freezing (including resulting water damage) if the insured did not take reasonable precautions to (1) maintain heat in the building, or (2) drain the equipment and shut of the supply if the heat is not maintained. “Reasonable precautions” may be interpreted differently, depending on circumstances. If someone left home for a Caribbean cruise on Jan. 30 when the temperature was 81 degrees, was it unreasonable if they forgot to turn on the heat before leaving? Most insurers will not use this exclusion to deny coverage except in the most extreme circumstances evidencing a policyholder’s conscious neglect to prevent a loss.
