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Insurance company must pay water damage claim

Vacant building under renovation adds twist to coverage

TRB Investments owns an empty former bank building that it leased to Goodwill Industries. Before the tenant could move in, however, TRB had to extensively renovate the building. From June 29 to July 14, TRB's electrical subcontractor performed electrical work, and the heating, ventilation and air-conditioning (HVAC) subcontractor tested the units. Purchase Bob Bruss reports online. On the morning of July 16, workers discovered a water heater or waterline on the third floor had burst, causing significant water damage. The burst occurred sometime between July 14 and July 16. TRB filed a water damage claim with Fireman's Fund Insurance Co., which held a property insurance policy on the premises. But Fireman's Fund denied coverage, arguing the 60-day vacancy clause in the policy applied. Due to the higher risk of loss from vandalism, theft and water damage for a vacant property, the insurer explained, most insurance policies contain similar coverage exclusions for vacant properties....

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