Coverage A in H.O. Policy Does Not Cover Irrigation System

Adamo v. Fire Insurance Exchange
(Cal. Ct. of App., 4th Dist.), filed September 24, 2013, published September 24, 2013

Vincent Adamo filed a claim under his homeowner’s policy after a wildfire damaged his 1,000-tree avocado grove, 10,000-gallon water tank, irrigation system, culverts, two woodsheds, and landscaping on his property. His homeowner’s insurance policy, which was issued by Fire Insurance Exchange, provided two separate categories of coverage for: (1) the “Dwelling” (Coverage A); and (2) “Other Structures” (Coverage B).

Coverage A applied to four sub-categories, all related to or including the dwelling: (a) “the dwelling on the Described Location, used principally for dwelling purposes;” (b) “structures attached to the dwelling;” (c) “materials and supplies on or adjacent to the Described Location for use in the construction, alteration or repair of the dwelling or other structures on this location;” and (d) “if not otherwise covered in this policy, building equipment and outdoor equipment used for the service of and located on the Described Location.” Coverage A had a $531,000 total liability limit.

Coverage B applied to “other structures on the Described Location, separated from the dwelling by clear space.” Coverage B had a $53,100 limit.

Fire Insurance Exchange paid Adamo $116,000 for various damages, including the policy’s $53,100 policy limit under Coverage B for “other structures.”

Adamo sued, claiming he was entitled to additional benefits for damages to the water tank, irrigation system, and culverts associated with his avocado growing operation under: (1) Coverage A for structures that are “attached” to his dwelling; (2) subsection 1 of “Other Coverages” which included “other structures;” or (3) under Coverage A for “building equipment and outdoor equipment used for the service of and located on the Described Location.”

The trial court ruled: (1) the water tank, piping and other property were not “attached” for Coverage A to apply; (2) none of the property was covered under Coverage A for “building equipment and outdoor equipment;” and (3) subsection 1 of “Other Coverages” did not establish a separate line of coverage but only established the Coverage B policy limits.

The Court of Appeal affirmed. It found that the policy was not ambiguous and plainly and clearly specified what was or was not covered.