Last login: Friday, December 10, 2010
I disagree with your opinion that the homeowners insurance will not cover this.
The "Governmental Action" followed a decision that the home was inhabitable because it was contaminated. The direct loss that contributed to setting the house on fire was contamination.
Coverage is under the "Pollution" exclusion, what I like to call an "exclusion to the exclusion". Since the hazardous materials on the premises did not belong to the owner, & were not known to exist by the owner, the "Pollution" exclusion does not apply.
When there is ambiguity in insurance coverage, the decision is in favor of the insured. When there are no previous cases to set a precedent, the decision rests in favor of the insured.
The owner is an innocent victim of the acts of her tenant. My guess is the insurance company will look toward resolving this in the best interest of their customer, who has suffered immense emotional distress. Denying coverage would likely end up in a lawsuit by the mortgagee, with the risk of punitive damages likely, not to mention bad publicity & fines by the Insurance Department.
The fact that the owner has not gone public on this, or attempted to stop the burn, tells me she is being compensated, as she should. That's my opinion.
December 10, 2010 at 5 p.m.
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