Scope of "Vehicles" Peril Explored – Claims Magazine

ISSUE

Which of these are "vehicles" losses? An insured's new stove is damaged when it falls out of the insured's pick-up truck while he is bringing the stove home from the store. The insured loses control of the wave runner she is riding and hits the dock causing her video camera, which had been on the dock, to fall into the water. The insured shuts a car door on her hand while alighting and, in a reflex action, brings the other hand around slamming it on the side of the car and dislodging the diamond from her ring.

The valet at an airport opens the taxi door and the insured's laptop computer falls off his lap and out onto the ground. Personal property being moved in a moving van is damaged while being transported. Personal property in a car is water-damaged when the insured drives the car off a bridge into the water. A deer runs into the side of a pontoon boat being hauled by a trailer behind the insured's car.

ANALYSIS

All of these are losses involving vehicles. "Vehicles" is a named peril for personal property in most homeowners property insurance policies, but the policies commonly do not define it. Common dictionary definitions and reported cases defining "vehicles" apply that term to a wide range of devices on land or on water or in the air and do not limit it to motor vehicles or land vehicles or to devices which run on land or tracks, though some policies may qualify their vehicles perils by use of language that would so limit the meaning of the term "vehicles."

Just because a vehicle is present in the scenario, though, does not necessarily mean that the vehicles peril applies to the loss. We attempt to draw a line between damage caused by a vehicle's force, weight, motion, or momentum in its use as a conveyance, which is covered under this peril, as opposed to damage caused by the mere physical presence of an object the size and shape of a vehicle, which would not be covered under the vehicles peril.

Further, not even every loss which occurs while a vehicle is in motion falls within the scope of the vehicles peril. For example, suppose an insured is riding in a vehicle at a constant rate of speed over a straight, smooth road. The insured moves his arm, catching his suit jacket on a sharp projection in the vehicle and ripping the fabric. Since the loss would have occurred in exactly the same manner had the vehicle been standing still, the loss did not directly result from the weight, force, power, or movement of the vehicle so as to be a direct loss by vehicles. However, if the insured's clothing is ripped because he is thrown around or jostled in the vehicle due to the vehicle's speed or motion, the damage would be an insured direct loss by vehicles. Applying the distinction to the events described at the beginning of this discussion, several losses clearly fit within the vehicles peril.

The vehicles peril applies to the stove that is damaged when it falls out of the insured's pick-up truck while being transported because the loss is caused by the vehicle's force, weight, motion, or momentum.

The insured's wave runner is a vehicle, and it is the force, weight, motion, or momentum of that vehicle hitting the dock that causes the video camera to fall into the water so that the vehicles peril applies.

Personal property that is damaged while being moved in a moving van is a vehicles loss if it is caused by the jostling around of the items due to the force, weight, motion, or momentum of the moving van.

Even the personal property in a car that is water damaged when the car is driven off the bridge into the water is a loss due to vehicles, since the motion or momentum of the car carried the items to the water.

The remainder of the losses described at the beginning of this discussion probably are not within the vehicles peril.

The loss of the insured's diamond that becomes dislodged from her ring when she shuts a car door on her hand while alighting and slams her other hand with the ring against the side of the car in a reflex action is not within the vehicles peril. The loss of the diamond would have occurred regardless of what the insured would have slammed her hand against, and the fact that she slams it against a vehicle is merely coincidental.

Similarly, the loss to the insured's laptop computer that falls off the insured's lap onto the ground when the valet opens the taxi door is not a vehicles loss, since it would have occurred regardless of whether the insured was sitting in a vehicle or not. However, some insureds may argue, citing State Farm Fire & Casualty Ins. v. Aulick, 781 S.W.2d 531 (Ky. App. 1989), that these are both vehicles losses because they were in scenarios where the vehicle was being used as a conveyance.

Actually, such a reading of the holding in the Aulick case is overbroad. In that case, the insured's property was damaged when heating oil escaped from the oil delivery truck's hose nozzle that was connected to the residence's oil tank. The court held that this was a vehicles loss because "a vehicle brought the offending material to the appellees' home and the vehicle's motor was used to pump the material in such a way as to cause damage to appellees' property. The truck was being used exactly as it was designed and constructed to be used." 781 S.W.2d 531, 533. That case can be distinguished from the two non-vehicles peril losses described above because, in the Aulick case, there was an active operation of the vehicle that caused the oil leak and damaged the home and not just the presence of the truck.

A loss caused when a deer runs into the side of a pontoon boat being hauled by a trailer behind the insured's car is also not a vehicle's loss. While the car, the trailer, and the boat are all vehicles and all moving at the time of the loss, it is the force, weight, motion, or momentum of the deer rather than any of the vehicles that causes the loss.