Insurer turns nose up at owner's skunk claim

February 24th, 2011 3:00am
Rent it Right

Janet Portman
Inman News™

Q: We're having a real fight with our insurance company over whether they'll cover a claim. Here's what happened: Our tenants told us that animals had apparently gotten under the house. The tenants heard scratching and other telltale noise.

Sure enough, we sent out an exterminator, who removed a skunk's nest. We also had to do some repairs, because the skunks had helped themselves to insulation and other material to make their nest. It was pretty expensive -- but the insurance company, pointing to the part of our policy that excludes coverage for damage due to "vermin," won't honor the claim. --Mike M.

A: Whether your insurance company's position is correct will depend on whether skunks are properly considered "vermin." To find out, we need to do a bit of research. And, wouldn't you know it, the answer isn't really clear.

Most definitions of the term describe vermin as various small animals, like rats or cockroaches, which are destructive, annoying or injurious to human health. In particular, vermin are animals that compete with humans for food.

The word's origin is the Latin word vermis, meaning worm; and the term may have been associated with the worm-like larvae of certain insects that contaminate food. Vermin are also objectionable critters, and difficult to control.

The challenge of this definition is that it depends on the animal's relationship to human food, not on any specific characteristics that an animal must have in order to qualify as vermin. This means that the critters that can be classified as vermin will vary depending on locale, and also on human habits.

For instance, pigeons that subsist on pretzel scraps and hot dog buns in Central Park may be considered vermin, but a wild pigeon in its native habitat would not.

So, are your unwelcome skunk guests vermin or not? Though they did help themselves to construction materials, they certainly weren't eating your food.

And, although they were destructive and annoying, your tenants don't assert that they posed a threat to their health. Before venturing further, we'd need to know whether the skunk population in the area was normal or inflated due to, say, the suppression of predators or other factors (the more the skunks appear to be part of a skunk population explosion, the more they begin to look like vermin).

It's interesting to note that future homeowners insurance policies will not include the term "vermin" when specifying the kinds of infestations that will not be covered.

Recognizing that the term is too difficult to pin down, the Insurance Services Industry (the association that writes insurance forms and clauses) will begin replacing the term "vermin" with "nesting animals." When those policies are used, it will at least be clear that damage due to animals that form a nest will not be covered. But methinks I spy the next challenge: What, exactly, is a "nest"?

Q: After I lost my job and my husband had his hours cut, we had trouble paying the rent. Our son's illness put us into deep financial trouble, and we had to declare bankruptcy. Now the landlord is trying to collect the back rent and evict us. What should we do? --Ester and Paul P.

A: Because you filed for bankruptcy before the landlord got a judgment for possession (in other words, before the landlord filed and won an eviction case), you've bought yourselves a little time.

According to federal bankruptcy law, your bankruptcy filing put a stop to all new lawsuits that might be filed against you, at least initially. If your landlord files an eviction in state court, all you need do is state (in your initial response to the complaint) that you are protected by your bankruptcy filing. The landlord won't be allowed to proceed, but it's just a temporary setback. He'll go to bankruptcy court and ask the judge to lift that ban on new filings (called the "automatic stay"), and chances are, the judge will allow him to go through with the eviction despite your bankruptcy case.

If the landlord knows that you've already filed for bankruptcy, he may even go to the bankruptcy court before filing his eviction case, to save some time and money.

The process is a bit different for folks who have filed for bankruptcy after the landlord has gone to court to seek possession of the rental. For years, there was some confusion as to how far along the landlord's eviction case had to be in order for it to continue despite an intervening tenant bankruptcy. Did the landlord have to merely file for eviction, or must he have won the case, in order to proceed without asking the bankruptcy court for permission?

In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act clarified the rule as follows: If the landlord has already obtained a judgment for possession, a last-ditch effort by tenants to avoid eviction by filing for bankruptcy won't work. If the landlord got his judgment first, then he can proceed with the ouster.

Knowing that the landlord can eventually get the bankruptcy court to lift the stay, and that he can eventually evict you, consider whether you want to fight this case. From the sounds of things, you don't have a defense to not paying the rent, and would not win an eviction case. Why go through it, in light of the damage that will do to your future ability to get a rental?

If you move out before the landlord files, the landlord will simply be added to the list of creditors to be paid, if possible, from your bankruptcy estate. Whether he ultimately gets paid will depend on what you own, how much of that property the bankruptcy court is entitled to take to pay your creditors, and the number and size of the claims of creditors ahead of him.

Once your bankruptcy case is over, the debt to your landlord will be wiped out, even if your estate was too broke to pay any of what you owed. And, you won't have an eviction filing on your record.

Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of "Every Landlord's Legal Guide" and "Every Tenant's Legal Guide." She can be reached at janet@inman.com.

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