An Oregonian article reported that city officials said that new sprinkler equipment and high water use at the  house in Portland's  Southwest hills probably contributed to a landslide that sent it crashing into homes below it.

I am not a claims adjuster but the loss brings questions to light in regards to how the home insurance policy will respond to damages that are caused to property of others.

The part of a home insurance contract that provides coverage for bodily injury and property damage is personal liability. Personal liability is going to provide protection against a suit brought against any insured because of bodily injury or property damage caused by an occurence. The Oregonian article stated that Farmers Insurance, the insurer for both the home owners house that slid and one of the houses that was knocked off the foundation had denied the initial claim that was filed for repair of both houses.

For the homeowner whose house that slid off of the foundation there is not going to be any insurance coverage. As I stated in my October 9th blog post  the home insurance policy is going to exclude a loss to property due to 'Earth Movement'.  One of the companies I work with provides this as the definition of 'Earth Movement':

"the sinking, rising, shifting, expanding, or contracting of earth, all whether combined with water or not. Earth movement includes but is not limited to earthquake, landslide, mudflow, mudslide, sinkhole, subsidence, erosion, or movement resulting from improper compaction, site selection or any other external forces. Earth movement also includes volcanic explosion or lava flow."

Based on the policy language we have determined that there is no coverage to rebuild the home that was in the landslide. Why isn't that home insurance policy of the home that slid going to pay for the property damage that was caused to the other homes damaged due to the landslide?

The question that needs to be asked is "Who is liable for the damage?" Hopefully we are not going to see insurance companies dragging their feet in determining if the homeowner is liable or maybe the contractor who did the irrigation and excavation work on the property is liable for this event. We will find out over time.

In conclusion the unfortunate situation of this event is that even if Farmers Insurance decides to provide a liability payout on this claim there might be $500,000 worth of coverage to cover all the homes that were damaged. If the contractor's insurance policy provides a payout maybe there might be another $1,000,000. I am still uncertain if the possible amounts available would cover not just the rebuilding of the homes but also cover the cost for stabilizing the land around the homes.

Please contact me to have me provide you with a comprehensive review of your insurance program to make certain you have adequate insurance coverage in place. I will also provide you with recommendations to limit your liability.