Property Damage to Rented Premises

The CGL form allows coverage for property damage to premises rented to the named insured for a period of seven or fewer days. However, the limits of insurance section of the policy dealing with damages to premises rented to the named insured does not repeat this seven day time period. Does this language in the limits of insurance section broaden the coverage to include premises rented for more than seven days?

Georgia Subscriber

The seven day limitation applies to property damage caused by the named insured by means other than fire. In other words, if the insured rents a hotel room on a business trip of three or four days and while there, breaks a lamp or causes the tub to overflow with resulting water damage, the exception to exclusion j. on the CGL form gives the insured coverage for the property damage claim. If the insured were to rent the place for more than the seven day limit, this coverage is not available once that seven day time period has passed.

The damages to premises rented to the named insured language in the limits of insurance section does not impose a time limit, but the coverage is for fire damage only. Using the previous example, if the insured rents the hotel room for fourteen days and while there starts a fire, there is coverage for the fire damage caused by the insured.

Both type losses are subject to the damage to premises limit stated on the declarations page of the policy which in turn is subject to the each occurrence limit. And, any payment under the damage to premises limit reduces the general aggregate limit available to the insured for any future liability claims during the policy period.