Bulging Due to Power Outage and Humidity

Due to the massive ice storm 1/27/09, we have many policyholders who have been without power, some going on four weeks. We are getting some claims for damage that appears related to the general changes in temperature and humidity levels. Examples include floors buckling, and cracks in drywall and trim. Since these damages are not a direct result of a covered peril, we believe there is no coverage in the case of the named peril policies (HO2, FO2, etc). In the case of the HO3, some also believe the damage is excluded under the exclusion for settling, shrinking, bulging, or expansion…of…walls, floors, roofs, or ceilings. I would appreciate if you could provide an opinion. If you could expedite, it would also be greatly appreciated considering the urgency created by the Cat situation.

Kentucky Subscriber

Under the HO 02 there would be no coverage for buckling and such since indeed there is no named peril that fits the situation. However, under the HO 03 you need to look at the exclusion in context with the other exclusions. If the floor is buckling because of wear or the insured's fondness for growing orchids (thereby overly humidifying the home) then the loss is excluded. However, if the cause of the buckling is a covered power failure, then there is coverage for the loss.