“In America the ice-storm is an event. And it is not anevent which one is careless about. When it comes, the news fliesfrom room to room in the house, there are bangings on the doors,and shoutings, 'The ice-storm! the ice-storm!' and even the laziestsleepers throw off the covers and join the rush for the windows.”–Mark Twain, Following the Equator

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Of course, in modern times, the news of an ice storm arrives–long before the first speck of frozen waterappears–via the endless scroll across the bottom of the TV screen.Now if only a scroll explaining the insurance issues resulting fromice damage appeared.

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Enter FC&S. We receive numerous and variedquestions regarding ice, from ice causing things to fall, to thingsfalling through ice. For instance, one subscriber explained that acarrier was coding ice losses resulting from tree branches breakingoff and damaging homes as water losses. They then applied a water loss surcharge. Thesubscriber thought the cause of loss should be falling objects orthe weight of ice and snow, and not water. If ice melted and seepedinto a dwelling then it might make sense, but not this.

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Ice And Water

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Ice is not at all the same as water, a distinction that becomesclear when reading homeowners' forms. For example, one named perilin the ISO HO 00 03 covers “weight of ice, snow, or sleet thatcauses damage to property contained in a building.” In thesituation the subscriber described, the weight of the ice has notonly caused damage to the dwelling exteriors–after all, the ice isthe efficient proximate cause of the branches becoming fallingobjects–but it can also be viewed as the efficient proximate causeof any damage done to property inside the dwelling. In other words,there is a definite chain of events beginning with the ice stormand ending with the property damage.

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Distinguish this named peril from another separate peril thatapplies to “accidental discharge or overflow of water.” The policydrafters differentiate between water and its frozen form; theinsurer has ignored the plain policy language by coding theselosses as water losses since clearly the policy wording indicatesthat ice and snow are separate perils.

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The same is true under commercial forms, as indicated in thisscenario presented to us: a commercial property insured under theCP 00 10 04 02 policy with special causes of loss form CP 10 30 0402 attached experienced a loss when the Vermillion River, which wascovered in ice, started to thaw, causing the ice to break apart.Large chunks of ice damaged the exterior electrical outlets by theriver, which were connected to the main building. The insurerdenied coverage under the water damage exclusion.

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This was an inappropriate use of the water damage exclusion, andthe loss should be covered. The electrical outlet fixtures qualifyas building covered property because they are fixtures. There wasno flood damage here. There was a collision with ice, not damage byflood or water. The fact that the water was in frozen form takes itout of the water damage exclusion.

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Another issue that frequently arises is ice damming. As onequestioner explains, in his area of the country it is common forsnow to lie on roofs for periods of time after a snowfall.Subsequent periods of thawing and freezing cause ice dams to buildup along overhangs and the flashing at pitch breaks. Water from themelting snow backs up from these dams and seeps under the shinglesinto the house. Generally there is no visible damage to theroof.

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However, when the water seeps under the shingles, it can causeinterior damage, which is what happened to the insured's wallpaper,which the subscriber did not think was covered under the HO-3. Thesubscriber stated, “The peril of windstorm or hail contains thelimiting wording that loss to the property contained in a buildingcaused by rain, snow, sleet, sand or dust is not covered unless thedirect force of wind or hail damages the building causing anopening in the roof or wall. We think that the proximate cause issnow, whether or not in its crystalline form, and, without anopening in the roof, there is no coverage.”

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Rain And Snow

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There is a necessary distinction between rain, snow, and theaccumulation of water that results from either of these events. Theexclusion of loss caused by “rain, snow, sleet, sand, or dust” isnot synonymous with loss caused by “water, sand, or dust.” That is,water may emanate from a number of sources and an accumulation ofwater is an event totally distinct from either rain or snow. Yet,the exclusion refers only to rain or snow. Other water-relateddamage that occurs after the rain or snow has fallen may beexcluded as flood or surface water, but no exclusion addresses theloss in question.

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Further, the cause of loss to which the subscriber refers isfound in the personal property coverages. Wallpaper, since it ispermanently affixed to the wall, is real property and thus coveredunder dwelling coverage. Therefore, coverage exists as it would ifthe roof were leaking.

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Ice does not only affect dwellings and buildings, though. Onesubscriber admitted that an insured drove his car onto a frozenlake and the vehicle fell through the ice. He wanted to know ifsuch an event was considered a collision loss or a comprehensiveloss.

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It has been held that damage by water can be a collision loss,but these cases usually involve a car running into water or beingswept away by water. Again, the fact that the water is in a frozenstate results in a different outcome. In this scenario, the car wason the ice, fell through, and was submerged. This is not the sameas an auto impacting or colliding with water and would not beconsidered a collision but would be an other than collisionloss.

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While the Farmers Almanac is predicting an overallkinder and gentler winter for 2011, there will certainly still beice to contend with. Insurance professionals should understand thatice is its own entity and cannot be treated as water.

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Susan Massmann, CPCU, is an assistant editor forFC&S. She may be reached at [email protected].

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