What's the Scenario? with PLRB PLRB

The insured bought a house in Oregon and took out insurance under a 2011 ISO HO3. He lived there for a month, but then moved back to California and started renting out the Oregon house to a local couple. Six months later, the couple disappeared with no trace and the house had been trashed. Walls were dirty; carpet was dirty; graffiti in the bathroom, hole in the bedroom wall; bottles and cans everywhere; dog urine. The insured wanted his homeowners insurer to pay for a full Coverage A cleanup and restoration.
Notable Timestamps
[ 00:16 ] - The homeowner rented out his house, then returned to significant damages from absentee renters and is seeking coverage for cleanup and restoration.
[ 01:15 ] - The real question is, what happened to the tenants? Could it be… aliens? No.
[ 02:57 ] - If the homeowner wasn’t renting at the time of the insurance application, there was no misrepresentation.
[ 04:05 ] - If the insured didn’t reside there, is the house the “residence premises?” It’s disputed among the courts, but not an issue in Oregon.
[ 05:20 ] - Landlords should expect normal wear and tear which is not covered, but vandalism is covered.
[ 08:32 ] - Dog urine may be considered a pollutant which is excluded, but if it’s vandalism, that’s a Coverage C Peril and likely covered regardless.
[ 09:39 ] - What about questionable fashion choices, a tenant painting a wall red, or rainbow-colored? If it affects market value and ability to rent it, that could be a direct physical loss.
[ 11:30 ] - Vandalism is a Coverage C Peril, but excluded under Coverage A if the home has been vacant more than 60 days. 
[ 12:15 ] - Which state law applies? In this case, the home was in Oregon, so even if the insured was living in California, it’s likely Oregon law will apply.
[ 13:24 ] - Tim provides a recap of the scenario and the points above.
Your PLRB Resources
Coverage Question - Tenant Damage Can Rise to the Level of Vandalism/Malicious Mischief - https://search.plrb.org/?dn=87158
Q&A - Damage By Tenants - https://search.plrb.org/?dn=38442
Coverage Question - Tenant Hoarders: Vandalism or Wear and Tear? - https://search.plrb.org/?dn=87102&src=gsa
For more on the vandalism exclusion, see: https://www.plrb.org/documents/vandalism-vacancy-ho126/
Employees of member companies also have access to a searchable legal database, hundreds of hours of video trainings, building code materials, weather data, and even the ability to have your coverage questions answered by our team of attorneys (https://www.plrb.org/container.cfm?conlink=sec/cq/default.cfm) at no additional charge to you or your company.
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Send us your Scenario!
Please reach out to us with your scenario! This could be your “adjuster story” sharing a situation from your claims experience, or a burning question you would like the team to answer. In any case, please omit any personal information as we will anonymize your story before we share. Just reach out to scenario@plrb.org.
Legal Information
The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.
Music: “Piece of Future” by Keyframe_Audio. Pixabay. Pixabay License.
Font: Metropolis by Chris Simpson. SIL OFL 1.1.
Icons: FontAwesome (SIL OFL 1.1) and Noun Project (royalty-free licenses purchased via subscription).
Sound Effec

The insured’s house in Rhode Island was destroyed in hurricane winds. The insured is a natural handyman (although his day job is an accountant), and he decided to rebuild the house himself from scratch, working diligently nights and weekends. Since he has a talent for this, materials & labor only ended up costing him less than the replacement cost estimate but more than ACV. Is he owed ACV, RC, actual cost, or policy limits?
Notable Timestamps
[ 00:15 ] - The insured’s home undergoes a total loss covered under the standard ISO HO3 with standard replacement cost and Coverage A limits of $450K. ACV was determined to be $200K, and the replacement cost estimate was $400K.
[ 01:00 ] - The insured, a handyman, rebuilt the house from scratch for $300K, including materials and his own labor.
[ 02:15 ] - Tim and Alissha prefer to hire help, but Mike shares a story about how he once attempted a sump pump repair with limited success…
[ 05:43 ] - Twenty states are “valued policy states” where the insurer must pay the policy limits on a total loss to discourage policy limits consistently higher than replacement cost and the resulting higher premiums. This doesn’t apply here.
[ 07:03 ] - Mike suggests paying $200K until the work is confirmed, then the remaining $100K for the balance of the actual work done, even though the replacement cost estimate was higher.
[ 09:10 ] - Tim confirms that according to the policy, the insured is to receive the lowest of: the replacement cost estimate, actual cash value, or actual cost incurred. The philosophy to make the insured whole.
[ 10:26 ] - The insured’s own labor could be paid. It’s hard to figure out what “overhead & profit” would be in this scenario.
[ 12:00 ] - If the insured didn’t keep good records to substantiate the self-repair, some courts would rule against them.
[ 14:00 ] - If the actual cost to repair falls under ACV, however, the insured can always simply make the ACV claim.
[ 15:30 ] - If the insured rebuilds somewhere else, he is still only entitled to the replacement cost estimate for the original location.
[ 17:30 ] - Tim provides a recap of the scenario and the points above.
Your PLRB Resources
Coverage Question - Are DIYers entitled to the cost of their labor? - https://search.plrb.org/?dn=54422&src=gsa
Q&A: “The Do-It-Yourselfer: ACV (Defined as Replacement Cost Less Depreciation) and RC” - https://search.plrb.org/?DN=39042
PLRB Homeowners Policy Annotations - Replacement Cost Loss Settlement - 80% Insured (HO96) - https://search.plrb.org/?DN=26
Employees of member companies also have access to a searchable legal database, hundreds of hours of video trainings, building code materials, weather data, and even the ability to have your coverage questions answered by our team of attorneys (https://www.plrb.org/container.cfm?conlink=sec/cq/default.cfm) at no additional charge to you or your company.
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Send us your Scenario!
Please reach out to us with your scenario! This could be your “adjuster story” sharing a situation from your claims experience, or a burning question you would like the team to answer. In any case, please omit any personal information as we will anonymize your story before we share. Just reach out to scenario@plrb.org.
Legal Information
The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from

The insured is a homeowner in Oregon. There were wildfires in the forests around his neighborhood, but the fire never got closer than 3 miles from his house, so he never had to evacuate. Nevertheless, the smoke was thick in his area, and enough of it penetrated into the inside of the house to leave a faint but noticeable smoky odor that does not seem to be going away. The insured is requesting smoke remediation to be performed in his house and on some of his contents.
Notable Timestamps
[ 00:18 ] - The interior and exterior of the insured’s home was left with a smoky odor after a local wildfire, and the insured is seeking remediation under the standard ISO form.
[ 01:10 ] - The team discusses the prevalence of wildfires in recent years.
[ 03:25 ] - In most jurisdictions, odor is considered a physical loss because it is caused by particulate matter, and it’s a named peril.
[ 04:27 ] - COVID particles die off quickly, whereas smoke particles tend to adhere for much longer.
[ 05:50 ] - Is the insured being “overly sensitive”? How to decide whose nose knows? Objective criteria like smoke particles can be objectively measured, and a medical opinion is another form of evidence.
[ 07:57 ] - In the pollution exclusion, “smoke” is specifically listed… but the pollutant was released by a coverage C named peril… namely smoke!
[ 10:50 ] - ALE could even apply if the odor made the home not fit to live in. Furniture could need repair or replacement.
[ 13:37 ] - The fire’s Canadian origin likely doesn’t affect coverage.
[ 15:00 ] - Tim provides a recap of the scenario and the points above.
Your PLRB Resources
HO Policy on Smoke Peril (HO55) - https://search.plrb.org/?dn=148&src=gsa
TYCK on Smoke Damage to Homes from Neighboring Wildfires - https://search.plrb.org/?dn=57796&src=gsa
Coverage Question “Home Suffers Odor From Wildfire Smoke” - https://search.plrb.org/?dn=26481&src=gsa
CE Course on “Investigating and Resolving Different Types of Wildfire Losses“ - https://www.plrb.org/public2/dislearn/description.cfm?mod=p0093
Employees of member companies also have access to a searchable legal database, hundreds of hours of video trainings, building code materials, weather data, and even the ability to have your coverage questions answered by our team of attorneys (https://www.plrb.org/container.cfm?conlink=sec/cq/default.cfm) at no additional charge to you or your company.
Subscribe to this Podcast
Your Podcast App - Please subscribe and rate us on your favorite podcast app
YouTube - Please like and subscribe at @plrb
LinkedIN - Please follow at “Property and Liability Resource Bureau”
Send us your Scenario!
Please reach out to us with your scenario! This could be your “adjuster story” sharing a situation from your claims experience, or a burning question you would like the team to answer. In any case, please omit any personal information as we will anonymize your story before we share. Just reach out to scenario@plrb.org.
Legal Information
The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.
Music: “Piece of Future” by Keyframe_Audio. Pixabay. Pixabay License.
Font: Metropolis by Chris Simpson. SIL OFL 1.1.
Icons: FontAwesome (SIL OFL 1.1) and Noun Project (royalty-free licenses purchased via subscription).
Sound Effects: Pixabay (Pixabay License) and Freesound.org (CC0).
 

The insured, a father of 4, was out buying Christmas gifts for his children. This year he decided to splurge and buy each of them a drone and an Apple Watch. On his way back home, he stopped to get gas, and when he went into the minimart for coffee, a thief stole everything out of the back seat. The insured notified the police and submitted a claim under his ISO 1991-edition HO3. The adjuster considers this to be a covered Theft loss, but she knows there are specific provisions in the policy for watches and aircraft.
Notable Timestamps
[ 00:17 ] - A theft claim is submitted for four drones and four smartwatches under the 1991 HO3. The question arises whether special provisions for aircraft and watches applies.
[ 01:27 ] - The team debates the merits of drones and smartwatches, their capabilities for wall damage and dog-scaring, and the wisdom of being notified emails the instant they are received.
[ 03:09 ] - A $1,000 special limit of liability applies to theft of “watches.” Is an Apple Watch a watch?
[ 03:42 ] - Alissha argues that smartwatches are too different from a basic time-telling watch, and is more like a phone. Smartwatches were likely not part of the original policy intent.
[ 04:55 ] - Mike argues that it’s called an “Apple Watch” -- its makers and users consider it a watch, even if it’s more complex.
[ 06:05 ] - The group quotes Shakespeare and Merriam-Webster; it tells the time and it’s on your wrist, so…
[ 06:30 ] - Grassie v. Merrimack Mut. Fire Ins. Co., 291 A.2d 254 (N.H. 1972) (watches that were inoperable and kept in display case were still subject to special limit of liability for theft of watches).
[ 07:00 ] - Ambiguities are construed in favor of the insured. So both sides need to hire a good lawyer.
[ 07:52 ] - How would the policy treat an iPhone strapped to your arm? Coverage C would likely provide full coverage for a smartphone.
[ 09:51 ] -  “Property Not Covered” includes “aircraft”… but “model or hobby aircraft not used or designed to carry people or cargo” are covered. 
[ 10:20 ] - Toy drones likely fall under hobby aircraft.
[ 11:15 ] - This scenario looked at what’s covered property, but a drone could also be a covered cause of loss, even if it destroys itself.
[ 12:40 ] - Unlike BP and CP forms, there’s no concern about the loss happening off-premises; homeowners get worldwide coverage for Coverage C.
[ 14:19 ] - In the 2022 ISO form, a $2,000 special limit of liability applies to model or hobby aircraft.
[ 15:51 ] - Under the recovered property provision, if the thief is caught after the amount is paid, the insured can choose to return the payment or have the insurer salvage the goods.
[ 18:00 ] - Tim provides a recap of the scenario and the points above.
Your PLRB Resources
FAQ, Drones and First Party Property Coverage, http://search.plrb.org/?DN=60514
FAQ, Is a Drone an Aircraft Under the CGL Policy?, http://search.plrb.org/?DN=56440
Coverage Question on “Is An Apple Watch Considered A Watch Or A Computer?” - https://search.plrb.org/?dn=58826&src=gsa
Employees of member companies also have access to a searchable legal database, hundreds of hours of video trainings, building code materials, weather data, and even the ability to have your coverage questions answered by our team of attorneys (https://www.plrb.org/container.cfm?conlink=sec/cq/default.cfm) at no additional charge to you or your company.
Subscribe to this Podcast
Your Podcast App - Please subscribe and rate us on your favorite podcast app
YouTube - Please like and subscribe at @plrb
LinkedIN - Please follow at “Property and Liability Resource Bureau”
Send us your Scenario!
Please reach out to us with your scenario! This could be your “adjuster story” sharing a situation from your claims experience, or a burning question you would like the team to answer. In any case, please omit any personal information as we will anonymize your story before we share. J

Your friend Joan was growing 3 cannabis plants in her home in Hawaii, intended as medical marijuana. Just as the mature plants were almost ready for harvest, the heat lamp malfunctioned and caused the crop to burn in a small fire. Joan submitted a claim under her HO policy, and wants to know if coverage is available.
Notable Timestamps
[ 00:16 ] - Joan’s plants were valued at $2,000 each, and she wants to know if there is any coverage under 2011 ISO HO3.
[ 01:19 ] - Tim, Mike, and Alissha banter about Superbowl squares, “medical” marijuana, and the Ohio legislature.
[ 03:03 ] - The plant may seem permanent, but you would probably take it with you, so it likely wouldn’t be considered part of the “dwelling.”
[ 04:20 ] - The policy may have Additional Coverage for trees, shrubs, and plants limited to $500 per plant, but that would only be triggered under Coverage A and B after the plants were considered to fall under the “Land” exclusion. This claim falls under Coverage C, which would not apply the $500 per plant cap.
[ 05:20 ] - But isn’t marijuana illegal? Section II excludes controlled substances, but Section I does not, and there’s no “illegal property” exclusion there. CP and BP forms also exclude contraband.
[ 06:12 ] - There are a couple of hidden exclusions, namely a social implication that what you’re insuring is lawful property.
[ 07:45 ] - The group discusses the uncertain legality of marijuana.
[ 09:46 ] - Another “hidden exclusion” is fortuity - insurance doesn’t cover “costs.”
[ 10:40 ] - Joan’s cultivation of these plants is legal under Hawaii law.
[ 12:30 ] - Tim discusses the split among courts, including Tracy v. USAA Casualty Insurance Co., Civil No. 11-00487 LEK-KSC., 2012 WL 928186 (D. Hawaii 3/16/12) [reviewed at PLRB, Prop. Ins. L. Rev. 8428 (2012)] and Green Earth Wellness Center, LLC v. Atain Specialty Ins. Co., 163 F.Supp.3d 821 (D. Colo. 2/17/16).
[ 14:15 ] - The 2022 ISO form specifically excludes cannabis under most situations.
[ 16:30 ] - Tim provides a recap of the scenario and the points above.
Your PLRB Resources
Homeowners Policy Annotations - Trees, Shrubs and Other Plants (HO43) - https://search.plrb.org/?dn=76
Webinar on Product Liability Cases Involving Emerging Risks: Vaping/Marijuana/Toxic Torts - https://www.plrb.org/distlearn/webinars/vplayer.cfm?vid=w0172
Coverage Question on “Theft of Marijuana - Covered Under a Homeowners Policy?” - http://search.plrb.org/?DN=47330
Employees of member companies also have access to a searchable legal database, hundreds of hours of video trainings, building code materials, weather data, and even the ability to have your coverage questions answered by our team of attorneys (https://www.plrb.org/container.cfm?conlink=sec/cq/default.cfm) at no additional charge to you or your company.
Subscribe to this Podcast
Your Podcast App - Please subscribe and rate us on your favorite podcast app
YouTube - Please like and subscribe at @plrb
LinkedIN - Please follow at “Property and Liability Resource Bureau”
Send us your Scenario!
Please reach out to us with your scenario! This could be your “adjuster story” sharing a situation from your claims experience, or a burning question you would like the team to answer. In any case, please omit any personal information as we will anonymize your story before we share. Just reach out to scenario@plrb.org.
Legal Information
The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.
Music: “Piece of Futur

[Recorded LIVE at the 2024 Claims Conference in Boston, MA!] The two head pastors of a megachurch had a falling out. One pastor left to start his own ministry, but just before he did, he changed the megachurch's Facebook password. He now has exclusive control of the account and sole access to the 100k+ followers, so the church filed a theft claim with its first-party insurer. Is this a direct physical loss to the church's property? Are Facebook followers even "property" with any means of valuation?
Notable Timestamps
[ 00:23 ] - Two pastors had a falling out, and one left to start his own ministry. The exiting pastor changed the Facebook passwork and took over the account, which has over 100,000 likes. The church filed a theft claim.
[ 01:17 ] - Tim, Mike, and Alissha discuss the fact that this episode was recorded live at the 2023 Claims Conference in Boston, MA.
[ 02:09 ] - The group banters about the continued relevance of Facebook groups like the one at issue in this scenario.
[ 03:00 ] - A gut feeling is not a basis for a denial. We have to go through the policy and articulate the basis for the decision.
[ 03:45 ] - A “facebook follower” doesn’t sound like property, but “my account” or “my password” or “my client list” sounds like it could be.
[ 05:19 ] - It took centuries for courts to develop and refine the meaning of land and property ownership, and “ownership” of digital assets is still a new field.
[ 05:43 ] - Is this a direct physical loss? The data is stored somewhere on a physical medium…
[ 06:30 ] - There is a special exclusion in Electronic Data for Manipulation By Employees. As for Employee Theft, Tim’s pocket policy comes in handy: “tangible property does not include electronic data.”
[ 07:40 ] - Practically speaking, can an insurer encourage an insured to “just work it out” with the thief?
[ 09:40 ] - Mike proposes “the Solomon approach.”
[ 10:50 ] - Tim provides a recap of the scenario and the points above.
Your PLRB Resources
Coverage Question on “Theft of Customer List Not Covered Under Employee Dishonesty” - http://search.plrb.org/?DN=26465
Businessowners Annotation on Electronic Data - http://search.plrb.org/?DN=45721
Businessowners Annotation on Employee Dishonesty - http://search.plrb.org/?DN=46222
[External] Moss & Barnett newsletter article “Whose Followers Are They? Establishing Ownership of Company Social Media Accounts by Aylix K. Jensen” - https://www.lawmoss.com/media/publication/1817_0437-00-Moss-and-Barnett%20Fall-2019-Newsletter_v8B-Final.pdf
Employees of member companies also have access to a searchable legal database, hundreds of hours of video trainings, building code materials, weather data, and even the ability to have your coverage questions answered by our team of attorneys (https://www.plrb.org/container.cfm?conlink=sec/cq/default.cfm) at no additional charge to you or your company.
Subscribe to this Podcast
Your Podcast App - Please subscribe and rate us on your favorite podcast app
YouTube - Please like and subscribe at @plrb
LinkedIN - Please follow at “Property and Liability Resource Bureau”
Send us your Scenario!
Please reach out to us with your scenario! This could be your “adjuster story” sharing a situation from your claims experience, or a burning question you would like the team to answer. In any case, please omit any personal information as we will anonymize your story before we share. Just reach out to scenario@plrb.org.
Legal Information
The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidan