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‘Ambiguous’ policy haunts property insurer

Must insurer pay homeowner's claim?

Mary Ann's 70-year-old home was insured with Allstate Insurance Co.'s "all-risk" homeowner's policy. After a window fell out of her home, Mary Ann hired a licensed pest control inspector to determine the cause of the unexpected window accident. The inspector thoroughly checked the house. He determined the fallen window and weak floorboards in the living room–which were "giving way"–were caused by the fungus Meruliporia Incrassata (Poria). Purchase Bob Bruss reports online. Mary Ann then filed a claim with Allstate under her policy for repair of the damaged areas. But Allstate denied the claim. Allstate's adjuster refused to pay the claim under the policy exclusion for any loss due to "...rust or other corrosion, mold, wet or dry rot." Because Allstate refused to pay for repairs, Mary Ann sued her insurer. She argued insured coverage exists under a conflicting "additional coverage" policy provision for collapse caused by "hidden decay." She emphasized that Allstate wrote...

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