The Homeowners' Property Bounced Out of Their Truck! Does the Vehicles Peril Apply? – Claims Magazine

ISSUE

The insured homeowners bought a new table and four chairs from a nearby furniture store. Rather than having the furniture delivered to their home, the insureds opted to haul the chairs home in their pickup truck. After carefully loading the chairs onto the bed of the truck, the insureds drove away and headed for the highway. This is when their troubles started.

As the truck gained speed, air moving around the truck blew two of the chairs out of the truck. One chair landed on the highway and was struck by another vehicle. The other chair bounced on the highway and then rolled onto the side of the road. Just then, the insureds' truck hit a bump in the road. This caused a third chair to bounce out of the truck. The insured panicked and slammed on the brakes. This caused the remaining chair and table to fly forward and smash into the cab portion of the truck.

All of the furniture was damaged. The insureds sought coverage under their homeowners policy under the named peril entitled "vehicles." The policy did not define the vehicles peril or the terms "vehicle" or "vehicles." The issue is whether or not the vehicles peril applies to damage suffered when contents of a moving vehicle are blown out of, jostled out of, or jostled within the moving vehicle.

ANALYSIS

The vehicles peril could apply to the described loss. The vehicles peril, when undefined, has been interpreted to apply where (1) the vehicle was functioning in its capacity as a vehicle and (2) the vehicle created the forces or circumstances that ultimately caused the damage. Direct contact or collision between the vehicle and damaged property has not been a required element. Consider the following cases wherein courts found that losses were caused by a vehicle or vehicles.

Case Law

In Vetrano v. Aetna Life & Cas. Co., 612 S.W.2d 689 (Tex. App. 1981), an insured homeowner suffered loss to personal property in a boating accident. While on a fishing trip, "the boat sprang a leak, took on more water than the bilge pumps could handle and ultimately capsized." Id. at 693. The court held that "this would support a finding that the loss of the unscheduled personal property was a loss caused by the boat." Id. Note that the court also concluded that a boat could be a vehicle within the meaning a homeowners policy.

The Vetrano decision illustrates that the vehicle peril may apply where loss did not involve a collision between a vehicle and the damaged property. The presence of the boat acting as a vehicle and creating the circumstances causing the loss was sufficient.

Next, in State Farm Fire & Cas. Ins. v. Aulick, 781 S.W.2d 531 (Ky. Ct. App. 1989), the court held that a vehicle caused a contamination loss under a homeowners policy. In Aulick, a delivery truck leaked fuel oil into a house while pumping oil into the home's oil tank. The court found that "a vehicle brought the offending material to the . . . home and the vehicle's motor was used to pump the material in such a way as to cause damage." Id. at 533. In finding coverage under the vehicles peril, the court concluded that "the truck was being used exactly as designed and constructed to be used." Id. (But see Robert E. Lee & Assocs., Inc. v. Peters, 557 N.W.2d 457 (Wis. App. 1996)(overfilling of an underground gasoline tank was deemed to be caused due to negligence by the operator rather than vehicle damage by the delivery truck).

In Aulick, like Vetrano, collision between the vehicles and the damaged property was not required. The insured needed only to show that the damage was caused by the vehicle acting in its capacity as designed.

In Bly v. Auto Owners Ins. Co., 437 So. 2d 495 (Ala. 1983) and Rightley v. Lebanon Mut. Ins. Co., 1993 Fire & Casualty Cas. (CCH) 12,864 (Pa. Ct. Comm. Pleas. 1992), both courts held that damage caused by vibrations from trucks was damage by vehicles. In Bly, heavily loaded logging trucks traveled on a road near the insured's home and created vibrations which damaged the house. Similarly, in Rightley, paving trucks traveled on grounds adjacent to the insured commercial building and caused vibrations that damaged the property.

Bly and Rightley establish that a vehicle can be a direct cause of loss where it creates the energy or force that causes the damage even though it does not directly impact the damaged property. Again, direct physical contact or collision between the vehicles and the damaged property was not required.

The Furniture Loss as Vehicle Damage

If we apply the reasoning of the above holdings to the facts surroundings the insureds' furniture loss, the damage to the table and chairs could be deemed to have been caused by a vehicle. The facts demonstrate that at the time of the loss (1) the pickup truck was functioning in its capacity as a vehicle and (2) the pickup truck created the forces or circumstances that ultimately caused the damage.

First, the loss occurred as the insureds operated their vehicle as designed and in its normal capacity. The insureds simply hauled the furniture in the back of their pickup truck for purposes of transportation. Additionally, the insured drove their truck on a roadway designed for such travel.

Second, the pickup truck created the forces and circumstances that ultimately caused the loss. Initially, the vehicle set the furniture in motion as the pickup gained speed. Much of the damage to the furniture ultimately was caused by this energy. Specifically, damage to the furniture from impact with the ground, another vehicle, and the back of the truck bed was either caused entirely or greatly from the momentum created by the truck.

Furthermore, the truck's operation exposed the furniture to the force of the surrounding air, which blew two pieces of furniture out of the moving truck. Operation of the truck also caused the furniture to collide with the back of the truck bed due to the sudden stop. In addition, the truck's collision with a bump provided an upward force that propelled another piece of furniture out of the truck.

Therefore, under the fact pattern here, the damage to all four chairs and the table could be deemed to have been caused by a vehicle. The loss appears to fall within the broad definition of the vehicles peril established by the courts.

Other Forms and Physical Contact Requirement

As illustrated in the opinions discussed above, when undefined in the policy, the "vehicles" peril may apply even in the absence of collision or physical contact with a vehicle. At present, standard homeowners forms and many manuscript homeowners forms do not define or limit the vehicles peril. However, some manuscript homeowners forms and basic commercial forms expressly limit the "vehicles" peril so that damage from impact or physical contact is required. Under these forms, a different result would be reached given the same fact pattern as described. The chair that bounced out and the chair that was blown out and simply rolled to the side of the road might not be covered.

CONCLUSION

The vehicles peril, when undefined or not expressly limited in the policy, likely applies to damage suffered when contents of a moving vehicle are blown out of, jostled out of, or jostled within a moving vehicle. Under a broad interpretation, the undefined vehicles peril applies where (1) the vehicle was functioning in its capacity as a vehicle and (2) the vehicle created the forces or circumstances that ultimately caused the damage. Unless expressly stated in the policy, direct contact or collision between the vehicle and damaged property are not required elements to show loss due to the vehicles peril.