In a recent post, I mentioned a court ruling that did not apply the water damage sublimit on a property policy to the cost of tearing out corroded pipes and concrete slab that were a necessary expense to a repair, but were not the direct result of the covered peril – water damage. I suggested that ideally no sublimit for water damage should be accepted on a property policy and care should be taken to ensure carriers do not start addressing these expenses by specifically excluding coverage for it.
While reviewing multiple BOP quotes this morning from a single carrier, I came across a coverage description entitled “water or other substance loss tear out and replacement expenses” that was included in the policy limit without any sublimits. Without seeing the actual policy forms, this appears to be addressing the issue of my recent post on costs related to repairs that are not the direct result of a covered peril, but are necessary expenses as part of the repair. If a policy is going to address it as the BOP policies I saw seemingly are, it should be providing full limits of coverage and not subject it to a sublimit of coverage.
Given that carriers are now addressing this issue and offering affirmative grants of coverage without any sublimits, it should be requested in coverage negotiations.