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Michael and Carole Brown v. Patriot Insurance Company

Held February 25, 2009 – Docket No. INS-09-2001
Decision Issued:  March 10, 2009

The insureds requested a hearing to contest the nonrenewal of their homeowners policy due to improper design of chimney and roof pitches which has resulted in ongoing interior water damage and which has not been corrected. Both parties provided independent engineering reports which indicate the chimney has not been sufficiently flashed to prevent leakage.

Held: For the company. The insurer has paid for water damage resulting from this roof leak, and has also paid $9700 of the $10,000 mold limit. The insurer had also referenced improper construction allowing water infiltration into the crawl space as another reason for nonrenewal. Additional water damage and mold remediation related to this cause of loss was denied. The insured maintained that the issues have not been corrrected because the insurer has failed to pay for them to be corrected. The company maintained that the homeowners policy excludes coverage for inherent vice and latent defect. The contract also excludes coverage for faulty construction or design. As the evidence supports the company’s contention that water damage will continue to ensue while these conditions are uncorrected, the reason is in good faith and related to the insurability of the property.