We are getting a number of inquiries from policyholders following the passing of Hurricanes Hermine and Hurricane Matthew about damages to docks, piers, and other man-made structures built over or close to the water.  As both of this year’s hurricanes remained offshore for most of their passing, the tropical storm forced winds nonetheless caused quite a bit of damage to coastal area structures, which included damage from wind, water and in some cases, collapse land subsidence which were holding up seawalls and bulkheads.

So what is the deal?  Are the docks, piers, seawalls, etc., covered by property insurance policies?  The short answer is that it depends. It depends on the type of policy you have and if coverage had been purchased for these items.  If you are not sure you have insurance coverage, then a little homework may be required on your part. The pursuit of finding property insurance coverage always begins by reading (or having an expert review) your property insurance policy.  The best place to start is by looking on the declaration page. This page is usually attached to the front of the policy and has terms such as building and contents property descriptions, as well as the dollar amounts the items are insured for. Look to see if you can find a line item that lists docks, piers, wharfs, seawalls, etc.  If there is a dollar amount listed as the limit by the item, you may be in luck. But that’s half the battle.  Next you need to see what perils apply or exclusions that may take away coverage for one or more of these items.

As an example, is dock damage limited to fire, lightning, or other named perils or are they covered for all risks not otherwise excluded? From our experience most dock losses result from storms from the action of both wind and water. Other causes are floating as well as wind born flying debris and boats broken free from their moorings from neighboring properties.  So if a dock is covered as an insurable item, the cause or peril that caused the damage needs to be listed (a named peril policy) or better yet an all risk policy with no exclusions. The latter is the best-case scenario, as your own insurance company will have to pay for your loss.

But if a dock is not listed on the declaration page, start by reading the first party property section of the policy to see if the policy language may in some way provide coverage.  Typically insurance policies will have a somewhat generic description of the insured property or building that is being insured and thus there is always the ambiguity possibility, that is to say, if there is an ambiguity in the policy, we have seen the courts give the benefit of the doubt to the policyholder. This may have been what an insured attempted to do when they made a case for coverage of a dock as a building out in the northwest recently.   While I have only read a summary of the case, I assume the dock in question was a dock with some type of roof covering or perhaps a boathouse, as the argument was that the structure in question was a building, something that would likely fall within the definitions for a covered property.

But in any event the court that heard this case ruled a dock was not a building and this policyholder did not prevail. I assume the ambiguity argument was used as this court turned to the definition in a dictionary for a building and clearly the dock in question did not square up with the ordinary meaning of a building as described in the dictionary that was consulted.

Finally if you think an ambiguity exist in the policy that would allow you to make a credible argument that the policy may indeed cover a dock, you need to check the exclusion section of the policy to see if any of the items listed as exclusions or perils are specifically excluded based on the facts of your loss.

Having offered this short coverage analysis road map to look for dock damage coverage, I can tell you from our experience, most homeowner’s policies do not cover docks, piers, etc., regardless of the peril that may have caused the damages.  The same thing occurs with the National Flood Insurance Program (NFIP)--no coverage under flood insurance policies. 

But remember there are a number of property policies written by many different insurance companies, some which may be in manuscript forms (specially written for a unique policyholder’s needs) that may have added coverage for a dock, etc. This is especially true for commercial marine operations such as marinas or other large maritime ports. So it always pays to read your policy after a loss, but it is equally important to know before a loss what is and is not a covered property and if covered, the limit of liability or dollar amount that is available as well as the perils that may apply.  As we had written some time ago in one of our blogs, a commercial client with a very large marine operation proves that things are not always as the insurance company adjuster may want you to believe. As you will read in our blog post picked up and posted on a lawyer’s website, the devil or in this case, the angels are always in the details! This is one rare example where we turned exclusion in the policy, to win big for our client in terms of a much higher settlement amount. This was all about the docks, their value, and if they were covered for the peril that caused damages.