It's the time of year when children are on their best behavior to ensure they make Santa's "nice" list, while parents are busily buying presents, baking, and sending holiday cards. Of course, stores are full of decorations and trimmings. There have been many articles written over the years about what insurance coverage Santa may need for his sleigh, workers, and such, but little consideration has been given to homeowners' policies and what exposures exist.
Cocoa Stains and Holiday Pains
In his haste to collect those milk and cookies before heading to the next house, Santa may spill cocoa on the carpet and not have time to clean it up. Carpet stains may or may not be covered, depending on what type of carpet it is. Wall to wall carpet is considered part of coverage A, the dwelling itself. This coverage is open perils, and there is no exclusion for sloppy elves on the policy. However, if the carpet is an area rug, there is no coverage to remove a cocoa stain, as there is no sloppy elf included in the named perils for personal property. Now, if the insured has an HO 00 05 or the HO 04 90 Personal Property Replacement Cost endorsement, then there would be coverage.
Some families prefer to leave Santa stronger beverages than cocoa, thus making it possible for him to be operating his sleigh a little under the influence. Let's imagine that Santa crashes into the local power transformer, which then causes a power failure on the insured's property. There is no coverage for damage because of the power failure unless a loss results from a Peril Insured Against. If the power failure results in a fire, then that loss is covered. However, if the power failure simply results in loss of refrigerated food because the power is off for several days, then there is no coverage.
We're going to assume that Santa's sleigh magically repairs itself. It is not a normal motor vehicle, so would not fall under a personal auto policy. Being pulled by reindeer and having skids instead of wheels, it is a unique vehicle and does not qualify as a personal auto. The manual states that a private passenger auto "is a four-wheel motor vehicle, other than a truck type, owned or leased under contract for a continuous period of at least six months". Also, Santa is using it for deliveries, so it belongs on a business auto policy as mobile equipment.
Another issue is soot from the chimney. We all know that Santa is overweight—nay even obese—and sliding down the chimney smoothly becomes more difficult as his body mass increases. Therefore, soot residue from where he has been in the house—where he sat, where he walked—may build up. Again, being in a hurry, Santa has no time to magically clean the house.
While it is natural to think that the same rationale applies here as it did in the case of the cocoa stains, soot is considered a pollutant. In order for damage from a pollutant to be covered, it must be caused by a coverage C peril. Under coverage C, the peril of smoke includes sudden and accidental damage from smoke, including the emission or puffback of smoke, soot, fumes or vapors from a boiler, furnace or related equipment. While the soot from Santa's suit is from the chimney, Santa sitting on the sofa eating cookies isn't exactly a puffback either. As mentioned previously, there is no named peril for sloppy elves, so there is no coverage if Santa leaves soot all over the house during his visit.
Outdoor Hazards
An outdoor hazard exists to the insured's bushes and trees if Santa falls off the roof. Unfortunately damage to trees, shrubs, and plants are named perils, but falling elves is not a named peril.
However, if the insured had so many decorations on the roof that they caused Santa to fall, the insured could be held liable. Medical payments would definitely cover injuries to Santa and any helper elves he brought along, unless Santa and the elves are covered under workers compensation. Workers compensation statutes do not address elves to our knowledge, so the cost of injuries could fall to the insured. The insured would also be reimbursed for any first aid expenses incurred should he have to bandage up Santa and his elves.
On the other hand, if the sleigh clips a tree there is coverage, because vehicles not owned or operated by a resident of the "residence premises" are covered. Vehicles are not defined, so Santa's sleigh would still be considered a vehicle, even though it isn't a car or truck. Remember that no more than $500 is paid for any one tree, shrub, or plant, though. This limit changes in March, so next year there would be up to $1,500 per tree available.
The damage to the roof structure is covered because there is no exclusion for damage caused by reindeer on the roof. Subrogating against Santa might put the carrier on Santa's naughty list, but one would assume that Santa, once contacted, would readily acknowledge his responsibility in the damage and handle the situation.
If your outdoor lights are such that the neighbors see Santa land on your roof and come over to investigate, there would be coverage for medical payments for slips and falls on your lawn. If the sound of jingling bells causes a neighbor to have a migraine however, there would be no coverage for the injury.
So, while during the holidays people give even less thought to their insurance coverage than normal, there are plenty of seasonal hazards that exist. We here at FC&S hope everyone is on Santa's nice list and that none of the possible accidents listed here occur at their residence premises. Happy holidays to one and all.