Q
One of our policyowners put laundry in a dryer and went to bed. Apparently, the exhaust from the dryer alerted someone to call the fire department. Without confirming a fire, the fire department broke two windows and broke down a door. There was no fire. The insured is covered by a CP 10 10, Causes of Loss--Basic Form. Is his damage covered?
--JONI SCHULTZ, CLAIMS EXAMINER
Mid Continent Insurance Company
Somerset, PA
Diana Kowatch, CPCU, AU, AAM, CPIW, with over 20 years' experience in the insurance industry, is editor in chief, Technical and Educational Products for The Rough Notes Company. She provides the following response.
First, let's look at what is covered in the Causes of Loss--Basic Form. In the past, the basic Cause of Loss Form was called named perils coverage because only those actual perils or causes of loss that are specified by this form are covered. Eleven causes of loss are detailed in the basic form: fire, lightning, explosion, windstorm or hail, smoke, aircraft or vehicles, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse, or volcanic action.
Now let's consider what is considered a covered fire loss:
Standard property policies, whether monoline or package, insure against direct loss or damage caused by the cause of loss or peril of fire. In the past, uncertainty had developed in loss situations whether claims are properly within the scope of the quoted terminology. The answers to the following questions will give us a reasonable yardstick to determine if a loss is a covered "fire" loss:
1) What is direct loss?
2) What is fire?
3) What is the distinction between hostile fire and friendly fire and the significance thereof in handling insurance claims?
Black's Law Dictionary has been used as an authority for pertinent legal definitions that stem from the relevant cases:
* Direct loss is "one resulting immediately and proximately from the occurrence and not remotely from some of the consequences or effects thereof." (Ermentrout v. Insurance Company, 63 Minn. 305, 65 NW 635, 30 L.R.A. 346, 56 Am. St. 481.)
* Direct cause is "the active, efficient cause that sets in motion a train of events which brings about a result without the intervention of any force started and working actively from a new and independent source." (Anderson v. Steinle, 289 Ill. App. 167, 6 NE 2d. 879.)
* Proximate cause is "that which, in a natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred." (Swayne v. Connecticut Co., 86 Conn. 439, 85 A. 634, 635.)
* "The causes that are merely incidental or instruments of a superior or controlling agency are not the proximate causes and the responsible ones, though they may be nearer in time to the result. It is only when the causes are independent of each other that the nearest is, of course, to be charged with the disaster." (Blythe v. Railway Co., 15 Colo. 333, 25 P. 702, 11 L.R. A. 615, 22 Am. St. Rep. 403.)
Webster's Collegiate Dictionary and Webster's New World Dictionary assign the following meanings to "fire": the phenomenon of combustion manifested in light, flame and heat; fuel in combustion; a destructive burning, as of a house or forest.
The World Book Dictionary defines "fire" as "flame, heat and light caused by burning."
Black's Law Dictionary describes "fire" as the effect of combustion. It stresses the point that the legal usage of the word does not differ from the vernacular. (1 Pars. Mar. Law, 231, et seq.) It cites the following as leading cases in establishing a proper meaning for the word:
"The word 'fire' as used in insurance policies does not have the technical meaning developed from analysis of its nature, but more nearly the popular meaning, being an effect rather than an elementary principle, and is the effect of combustion, being equivalent to ignition or burning, but heat is not fire, though fire may proximately cause loss from heat." (Lavitt v. Hartford County Mutual Fire Insurance Company, 105 Conn. 729, 136 A. 572.)
"The ordinary meaning of the word as used in an insurance policy includes the idea of visible heat or light." (Security Insurance Company of New Haven, Conn. v. Choctaw Cotton Oil Company, 149 Okla. 140, 299 P. 882, 884.)
"Damage to wool by spontaneous combustion with smoke and great heat, but without any visible flame or glow, is held not to be fire. Fire is always caused by combustion but combustion does not always cause fire." (Western Woolen Mill Company v. Assurance Co., Kan., 139 F. 637, 72 C.C.A. 1.)
Black's Law Dictionary, emphasizing special legal meanings of standard English words and meanings found in statutes and judicial opinions for the benefit of practitioners, judges and law students, makes this distinction:
* Hostile fire is "one which becomes uncontrollable or breaks out from where it was intended to be and becomes a hostile element." (Swerling v. Connecticut Fire Insurance Company, 55 R.I. 252, 180 A. 343. Reliance Insurance Company v. Naman, 6 SW 2d 743, 744, 118 Tex. 21.)
* Friendly fire is "a fire burning in the place where it was intended to burn, although damages may result." (Progress Laundry & Cleaning Company v. Reciprocal Exchange, Tex. Civ. App., 109 S. W. 2d 226, 227.)
Mowbray and Blanchard, in their authoritative Insurance, have this to say about fire loss under the standard Fire Policy:
"The contract covers only loss by a hostile fire. Hence, destruction of jewelry or other valuables that accidentally fall into a fire in the stove or on the hearth is not covered by the contract.
"If the fire rolls out of the grate across the hearth and onto the rug in front, its character is changed into that of hostile fire and the loss is covered.
"Mere heat is not fire, and damage due to scorching of paint by an overheated stove is not damage by fire within the meaning of the contract. There has been no fire except within the stove, and that is a friendly fire. If a pan of grease on the stove takes fire and, without igniting anything else, creates such a thick greasy smoke as to ruin paint that must be repaired, the resulting loss is caused by a hostile fire and is covered by the contract."
A direct loss by fire is one of which fire is the proximate cause and will be paid under property insurance as a fire claim if the fire was "hostile."
The loss must have been the immediate result of fire, as in the burning of a building, or the result of an unbroken chain of events, with fire as the primary cause of the events. For example, a four-alarm fire might gut a warehouse with the result that billowing smoke, wind-blown debris and chemicals and water from fire-fighting activity damaged the adjoining property of a neighbor without actual burning of the latter property. The loss to the neighboring building would be within the scope of the fire peril covered by the insurance applicable to it.
"A claim for fire loss has merit only if damage has resulted from a 'hostile' fire. A 'hostile' fire is one which becomes uncontrollable or breaks out from where it was intended to be and becomes a hostile element." (Mode, Limited v. Fireman's Fund Insurance Company, 62 Idaho 270, 110 P. 2d 840, 842, 133 A.L.R. 791.)
The courts have consistently agreed with the distinction made by insurance companies between "hostile" and "friendly" fires. There have been a few startling exceptions in the last few years, but their citation would only confuse the almost unanimous agreement.
There is general agreement that the fire in a trash barrel or incinerator is a "friendly" fire, and that the inadvertent burning in such a container of something of value is not covered as a fire loss. In support of this conclusion, we refer you to: Owens v. Milwaukee Insurance Company, 123 NE (2nd) 645; and Youse v. Employers Fire Insurance Company, 238 Pac. (2nd) 472. An "all-risk" policy would cover such a loss, but not as a fire claim.
Unfortunately, after all of the above, it does not appear that your insured's loss would fit the definition of fire (no actual fire or combustion), nor would it fit the definitions of any of the other covered causes of loss in the CP 10 10. Thus, there would not appear to be any coverage.
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