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Pioneer State Mutual avoids paying for water damage

Pioneer State Mutual, a recent entrant in the "cheapest insurer" competition with long-standing champion Allstate and aggressive newcomer Farm Bureau, gained "cheapness standing" when it won a recent battle with one of its insureds.  It avoided paying for water damage to the insured's home by citing fine-print exceptions to its coverage.

Thomas Holliday claimed that he suffered water damage when high winds opened access through the roof to the interior walls of his house.  The parties agreed that a roof covering was defectively installed, allowing it to be separated from the shell of the home, and allowing a long-term infiltration of water.  Unfortunately, Holliday did not sufficiently allege that some of the damage happened within a matter of days.  Pioneer State cited language in the exclusion section of the policy that eliminated its duty to pay for damage resulting "over a period of weeks or longer" and the Court enforced this exclusionary language to deny recovery for Holliday.

When Holliday pointed to language that appeared to provide coverage for property damaged by "rain, snow or sleet...entering...." through an "opening in a roof or wall", the Court held that this language applied only to personal property within the home and did not imply that structural damage would be covered.  The Court upheld Pioneer State's interpretation of the policy, even though under Michigan law "exclusions from coverage are to be strictly interpreted in favor of the insured."

Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
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