Admissibility of claim due to rainwater under IAR policy



Loss or damage to insured property due to  rainwater is not specifically excluded under IAR policy and any damage to property by direct action of rainwater shall be payable but if it leads to only loss in weight of insured  property due to solubility of substance, it would not be paid because loss caused by  "loss in weight" of  substance is not admissible even if it is caused by 'rainwater' which is not excluded under the policy.

Please understand that if non excluded perill (rain water)  is followed by an exlcuded peril (loss of weight), claim will not be admissible under the policy.


Comments

  1. Gurdeep Singh BatraJuly 19, 2020 at 9:49 AM

    Well explained in short and lucid way

    ReplyDelete
  2. UnknownJuly 19, 2020 at 10:35 AM

    Very nicely explained Sir.

    ReplyDelete
  3. rbJuly 19, 2020 at 10:40 AM

    Is ‘ loss of weight’ a peril? Is it not an outcome of operation of a peril? Loss of weight is the result of a peril viz. rainwater. Am I missing something?

    ReplyDelete
    Replies
    1. V.P SharmaJuly 19, 2020 at 11:03 AM

      Yes you are right. This is the effect of rainwater which is unfortunately appearing as one of the excluded causes under IAR policy.

      Delete
  4. sekarsampathAugust 8, 2020 at 6:30 PM

    Dear Mr. Sharma. You have addressed an important point. The issue could become complex if there is considerable loss in weight, which could be attributed to rainwater having washed away the stock, rather than the solubility of the substance. Especially we should note that the exclusion also has an exception which states:
    "unless such loss is caused directly by Damage to the property insured or to premises containing such property by a cause not excluded in the policy". Since rainwater is not an excluded peril, the exception to the exclusion would peril and the claim could be payable if if the substance were soluble. Perhaps the policy designers would have relied on the higher deductible which was considerable at the time the policy was framed, but not adequate at present.
    Another matter that should worry the insurers is the Judgement of the Hon. Supreme Court in the case of Oriental Insurance Vs. J.K. Cements. The Judgement was made on 28.01.2020. I would urge you to read it, as it has huge implications for our industry, as it could even cover rainwater damage even in a Fire Policy with flood cover. I look forward to your views.

    ReplyDelete
    Replies
    1. sekarsampathAugust 8, 2020 at 6:37 PM

      One minor error: The sentence should read as "Since rainwater is not an excluded peril, the exception to the exclusion would prevail, and the claim could be payable if if the substance were soluble.

      Delete
    2. V.P SharmaAugust 9, 2020 at 1:07 PM

      I agree to your views but I was talking about a loss situation where rainwater has caused loss of weight of insured property due to its solubility in water and since 'loss of weight' is an excluded peril, such loss would not be payable under the policy

      Delete
  5. V.P SharmaAugust 9, 2020 at 1:08 PM

    Futher as suggested by you, I will go through the High Court judgement and will give my opinion on same

    ReplyDelete
  6. UnknownOctober 14, 2020 at 8:51 PM

    Dear Sir ,

    I think if rainwater damage is the Peril behind the loss of weight then the claim should be payable .

    Because loss of weight also have any exceptions ...

    Thanks
    Mehul Nahar

    ReplyDelete

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