Homeowners Coverage for a Business Property

Our insured is an employee of a rural water association. Someone stole a water line detecting device from the back of his pickup while it was parked at his home. The association carries a high deductible under its policy.

The insured is covered under an AAIS form 3. Under coverage C, it states “we cover personal property owned by or in the care of an insured.” Personal property used in business is limited to $2500 while on the premises.

Initially we did not think the loss was covered under the homeowners, but now think it is not excluded.

Your thoughts?

Arkansas Subscriber

Your initial reaction was correct. The key is in the use of “personal,” which, according to Webster's Collegiate Dictionary, means “of, relating to, or affecting a person.” Coverage C affords coverage for the insured's personal property, and for property of other individuals that the insured may have borrowed. The association is not a person, and so there is no coverage for the water line device.