An insured owns mobile home parks in Oregon and Arizona. Our agency currently insures the park in Arizona. The insured owns the property and leases the spaces to tenants, who own the mobile homes.

One of the parks in Oregon burned in a wildfire and the owners have walked away from their burnt mobile homes. The cost to remove the burnt mobiles from the insured's property is $3,000 each.

Q: Would the cost to remove the burnt mobile homes fall under extra expense coverage?

Response 1: I hate to be a waffler, but I see arguments on each side of the situation. Did owned and scheduled property burn in the described fire? I would assume so, but looking at the declarations page would settle that.

Where and how a fire started and spread might influence coverage decisions. Perhaps coverage could have been found if the mobile home park had been named as an additional insured on each mobile homeowner's property policy. Of course, keep in mind that legal advice could be useful.

Response 2: You're barking up the wrong tree. Extra expense covers operating expenses going forward when those expenses are necessary to continue normal operations. The costs you're describing don't fit that description, so extra expense isn't the answer. 

What you're looking for is some kind of debris removal coverage for property owned by others and located on your insured's property. Your client certainly has an insurable interest to the extent of the potential debris removal expense. Theoretically, they could buy a fire policy to cover that exposure, but it would have to be on a no-coinsurance basis and have sufficient debris removal limits to cover a catastrophic loss like the one you describe. 

Good luck selling that concept to a property underwriter in the standard market. It seems more likely this would be done under a manuscript policy from the excess & surplus market.

Response 3: My first observation is that you state that you are not the agent for the Oregon property, so you should not be involved in the claim.

What you should be doing is ascertaining that their limits and coverages are correct for the Arizona location for which you place the insurance. It would also be wise to recommend that the insured require annual certifications from all his tenants and make that a requirement of the leases.

Response 4: Extra expense is provided at the premises described in the declarations. Is the location a described premises? Extra expense means necessary expenses incurred during the “period of restoration" the insured would not have incurred if there had not been a direct physical loss to property (not covered property) caused by a covered cause of loss. If the location is not described, there is no coverage.

Response 5: They need a lawyer before touching someone else's property.

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