March 05, 2020

Coronavirus and Your Homeowner’s Insurance

With the Coronavirus dominating the headlines, there is an increased awareness of activities that cause infectious diseases to spread. Hand sanitizer and surgical masks are virtually impossible to find anymore, whether online or on retail shelves. Conventions and other large public gatherings are being canceled or scaled-back, and employers are paying more than lip service to the idea that sick employees should stay home. 

But what happens if you stay home with flu-like symptoms and a visitor gets sick a few days later?  Maybe a neighbor stops by and asks if you will get their mail while they are on vacation, or maybe you run out to the drug store because you’re out of tissue and you infect the cashier. Are you liable for their illness, and if so, does your homeowner’s insurance provide you with any coverage?

Home insurance policies can vary widely from one insurance company to another, so you have to read your policy first. Note that there’s a difference between your policy declarations page(s) and your policy. 

The policy declarations page(s), also known as the “DEC page,” is a summary of your limits of coverage and any endorsements added to your policy. Think of the DEC page as the car you want to buy and the endorsements as the options you want on the car. 

The policy is the actual contract between you and the insurance company. Taking the car analogy, a step further, the policy is the owner’s manual. The policy tells you what is covered and what is not covered, and includes specific definitions to key words in the contract. Much like an owner’s manual tells you what you must do to maintain your car, the policy also tells you what you must do to maintain your coverage.

There are two broad sections of coverage in a home insurance policy. The first section provides coverage for your property – the home and other structures attached to the land and all your “stuff.” The second section provides coverage for liability and medical expenses.

The liability section of a home insurance policy basically says, “If someone else gets injured, and it’s your fault, we’ll pay up to X amount of dollars for their injuries.” 

The medical expenses section of a home insurance policy basically says, “If someone else gets injured on your property, we’ll pay up to X amount of dollars for their injuries, even if it’s not your fault.” Because medical expenses cover not-at-fault injuries, the amount of coverage provided is much less than what is paid by a liability claim – usually $5,000 to $25,000, depending on the company providing the coverage.

So, is there coverage? You’re home sick, someone stops by to see you, and now they’re sick. They call you and say, “I’ve been diagnosed with the Coronavirus and you coughed without covering your mouth when I visited you. How do I file a claim with your insurance company?”

The answer is “it depends.” As noted above, home insurance policies tell you what is covered and what is not covered. The items not covered are in a section entitled “Exclusions.” Let’s use the contract language from Company X as an example:

B. Section II – Exclusions

1. Applicable to Coverage E- Personal Liability

The following exclusions apply to Coverage E – Personal Liability:

This insurance does not apply to:

From here the policy lists 10 exclusions before they reach this one:

k. Communicable Disease

Bodily injury, personal injury, or property damage arising out of the actual, alleged or threatened transmission of a communicable disease by an insured.

So, there’s no liability coverage for communicable disease. In fact, the exclusion takes it a couple of steps further and says there’s no coverage “…arising out of the actual, alleged or threatened transmission….”  This means not even the fear of possibly getting sick is covered. 

What about medical expenses? Is there any coverage under that section? Let’s see…

2. Applicable to Coverage F – Medical Payments to Others

The following exclusions apply to Coverage F – Medical Payments to Others:

This insurance does not apply to bodily injury:

a. Excluded Under Coverage E – Personal Liability

No coverage there, either. Basically, this exclusion says, “If we excluded it from liability coverage, we’re going to exclude it under medical expense, too.”

And here’s the contract language from Company Z:

Exclusions

These exclusions apply to your Personal Liability Coverage, including the Extra Coverages, unless stated otherwise.

Company Z lists 32 different exclusions, but none of them are for communicable disease.  There is one exclusion for “illness,” but it is limited to illness “…resulting from any sexually transmitted illness, sickness or disease….”

So, it appears there may be coverage from Company Z, but as with all claims or possible claims, the coverage determination rests with the company. Every claim is unique, and one that involves something new or unusual like the Coronavirus would likely require an in-depth examination of the facts before confirming or denying coverage.


David Miller is The Plexus Groupe’s Vice President, Client Executive for Private Client Solutions. Miller can be reached by calling 846-307-6141.