Water Damage Covered due to Insured's Mistake?

A customer of an insured car dealership received a recall notice from the manufacturer and took the notice to the dealership. A mechanic at the dealership told the customer that his vehicle was not included in the recall. Subsequently, heavy rains caused the car to take on water. The customer made a claim for water damage because the recall repairs theoretically would have corrected the problem and prevented the damage. The dealer's insurer has denied the claim. Should the loss be covered? If not, where could we go to find coverage for a situation like this?

Puerto Rico Subscriber

Because there was no occurrence or accident, there is no coverage. The mechanic made a mistake in not including repairs for the car in question within the recall. However, that did not actually cause the damage—the problem with the vehicle caused the damage. This is similar to termite inspectors. If they fail to identify termites and damage ensues, it is not the inspector who caused the damage, but rather the termites.

As far as finding coverage for this type of claim, it is not insurable and is the cost of doing business. The carrier evidently likened this to a professional liability exposure. While the mechanic did make a mistake, he is not a professional, and therefore, would not qualify for professional liability coverage.