Question – I am working a large loss fire at a residential home in St Simon Island, GA.Heritage is the carrier.
Heritage has a $5,000 limitation on “tools”.The term tools is not defined in the policy.I find that to be extremely vague and ambiguous.
My question is - what is a tool? How do I go about identifying what is limited and what is not? I attach the policy. Please reference the Special Provisions – Georgia endorsement starting on page 26 of 47 of the PDF or 1 of 6 of the Endorsement – Section I, C. Personal Property letter (r.) - $5,000 for loss to tools.
That’s all I get.
The fire ravaged the garage where there was about $75,000 worth of items, some being potential tools. I attach a photo here so you understand.
How do I go about determining what is limited and what is not?
Florida Subscriber
That's a really good question. Before we get to the definition of tool, did the insured have any business equipment in the garage, what was most of the contents? Is there an inventory, did he work on cars as a hobby, was he a woodworker, what was the nature of the property in the garage? When a term is not defined in a policy, courts turn to a standard desk reference, since that's what insureds have access to. Merriam-Webster Online defines tool as follows:
1.a: a handheld device that aids in accomplishing a task
b(1): the cutting or shaping part in a machine or machine tool
(2): a machine for shaping metal : machine tool
2.a: something (such as an instrument or apparatus) used in performing an operation or necessary in the practice of a vocation or profession
Using this definition, any hand tool or other equipment would be considered a tool and limited to $5,000. Items such as garden tools including rakes, hoes, shovels, pruners, chain saws; woodworking tools such as saws, drills, planes, etc.; standard tools such as hammers, screwdrivers, wrenches, and any other hand tools; farming equipment, and pretty much anything else that would fit the definition of tool is limited to that $5,000. The insured needs to give you his best estimate as to what he had in the garage, and you'll have to go from there. If most of it was tools, then he's going to be limited to $5,000. But the limitation has no exceptions or definitions, and special limits are designed to restrict coverage. The endorsement expands the special limits from page 5 and includes other property such as collectibles, bicycles, computers, and tools.