How Trigger Theories Apply to Homeowner’s Insurance

property damage

When you have insurance coverage under any type of policy, from auto to homeowner’s insurance, there are certain events that trigger when your coverage is activated. Our Bonita Springs property damage attorneys explain trigger theories and how they can apply to homeowner’s insurance.

Trigger Theories

Trigger theories apply to a coverage problem that arises when it comes time to determine when exactly an insurance policy kicks in.

Four main trigger theories apply to insurance coverage:

  • Exposure trigger theory: Coverage is triggered at the time the first injury-causing conditions occur.
  • Injury-in-fact trigger theory: Coverage is triggered as soon as the personal injury or property damage underlying the insurance claim actually occurs.
  • Manifestation trigger theory: Coverage is triggered when an injury or property damage becomes known or is discovered by the victim or property owner. Also called “discovery.”
  • Continuous trigger theory: Coverage is triggered by a combination of the above. Also referred to as the multiple trigger or triple trigger.

Allstate Ins. Co. v. Hunter & Progressive Property Damage Claims

One of the most difficult determinations that courts have to make is the trigger theory applicable to continuous or progressive property damage claims. Let’s look at an example.

Allstate Ins. Co. v. Hunter was a 2007 Texas appellate court case that brought into question the complexities of trigger theory. The property damage case resulted in an intense debate between a couple and their insurance company about when the damage to their home actually became apparent and under which insurance policy the claim should be filed under.

The case began when the Hunter family noticed an unusual smell in their home during the summer of 2002. At the time, the Hunters had an HO-B homeowner's insurance policy with Allstate Insurance Company. Their coverage expired on October 6, 2002, however, so the couple replaced it with an HO-A homeowner's policy, which went into effect on October 7, 2002.

The Hunters hired someone to investigate the odor in December 2002, but no explanation was found. In February of the following year, a general contractor inspected the home and found water damage and mold in the crawlspace under the home. This is when the Hunters discovered mold was the cause of the odor, according to their testimony. Two days later, the Hunters notified Allstate of their claim.

Allstate determined the Hunters' claim should be handled under their HO-A policy and hired a plumber to inspect their home. The plumber found an ongoing water leak, but because the HO-A policy only covered "sudden and accidental" leaks, Allstate denied the claim.

The Hunters then requested Allstate treat their claim under their old HO-B policy, which they did. However, the insurance company ultimately denied coverage based on the Hunters' failure to comply with a condition requiring prompt notice of the property damage claim. The reasoning behind this was that if the claim had occurred under the HO-B policy, then the Hunters' February 2003 notice of that claim came too late. So, the Hunters sued Allstate, bringing this trigger issue to the Texas appellate court.

The debate about whether the damage was discovered in 2002, when the Hunters first smelled something odd, or in February 2003, when mold was actually discovered, was a long one. Ultimately, the manifestation trigger theory was applied, and Allstate won the lawsuit. According to the court, merely speculating property damage based on smell or one’s other senses is not necessarily enough to trigger coverage.

The bottom line is, determining how and when insurance coverage kicks in can be a far more complicated issue than it appears on the surface. If you have questions about this matter, or anything else related to property damage and homeowner’s insurance, please don’t hesitate to reach out to an attorney.

Has your home recently suffered property damage? Our Bonita Springs property damage attorneys are available to assist you with your claim. Contact us today to schedule a free case evaluation!