Legal Question in Insurance Law in California
Underground pipe gas leak
The tenant who rents my townhouse noticed a gas smell outside the patio door. My plumbing contractor determined that the leak came from an underground elbow fitting. My two insurance companies denied the claim. HO Policy: The adjuster indicated the leak is not covered because it was due to rust or deterioration, which is excluded under �Perils Excluded Against� Para 9. I contended that the same paragraph mentions that the cost of tearing out and replacing any part of a building necessary to repair the leak is covered, although the cost of repairing the pipe leak may not be. He argues that this applies specifically only to water damage resulting from a water leak, not a gas leak. I also carry a �Home Warranty Policy� A gas leak due to normal wear and tear is specifically indicated as a covered item. However the ��systems covered must be located within the main foundation of the home or garage�. This pipe runs underground through a small open patio area that separates the TH from the detached garage. This was indicated to be the reason for denial. The policy does state that they will cover all systems and appliance that affect the operation of the heating system. Could this argument be used?
1 Answer from Attorneys
Re: Underground pipe gas leak
This is typical insurance company finger pointing. They always try to find an "exclusion" to deny coverage so they don't have to pay. Unfortunately, we have to read the insurance policies in order to provide a clear answer. The insurance policy is a contract. They only have to pay for "covered" losses. If not covered, then, they don't have to pay. Please consult a local attorney to review the policies and provide a coverage opinion. Then, if there appears to be coverage you can sue them for breach of contract and seek a declaratory judgment from the court requiring them to pay. Good luck and thanks for inquiring.
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