Pool Collapse Damage Not Covered

Homeowners	Swimming Pool
Water Damage	Policy Terms and Conditions

Brian and Glenda Armstrong purchased a homeowners insurance policy through their agent, David Nipp, a Farmers Insurance Company of Idaho. The Armstrongs claimed they asked Nipp before purchasing the insurance if they would be covered for their swimming pool and that Nipp told them they would be covered. Nipp denied that this conversation took place.

In July 2003, the Armstrongs’ above-ground swimming pool collapsed, and water, mud, and debris flooded their finished basement. No piping or plumbing connected the pool to the house. The Armstrongs filed a claim under their homeowners policy. Farmers denied the claim, stating that the policy excluded losses to property caused by “water damage.” The Armstrongs filed a lawsuit against Farmers alleging various causes of action. The lower court found in favor of Farmers; the Armstrongs appealed.

The policy defined “water damage,” in part, as “overflow or escape of a body of water.” An exception to the water damage exclusion provided: “We insure for accidental direct physical loss to property . . . but only if caused by . . . [s]udden and accidental discharge or overflow of water . . . from within a household appliance.” The policy did not define the term “household appliance.” The lower court had found that the term “household appliance” was neither ambiguous nor commonly understood to include within its meaning the Armstrongs’ above-ground swimming pool. It, therefore, was found that the exclusion exception did not apply.

On appeal, the Armstrongs argued that the term “household appliance” unambiguously included within its meaning an above-ground swimming pool and that even if the term “household appliance” was found to be ambiguous, a reasonable person would understand it to include within its meaning an above-ground swimming pool.

The Supreme Court of Idaho disagreed. In reaching its decision, the court analyzed various dictionary definitions of “household appliance.” It noted that “household appliance”…“as used in everyday life refers to devices such as toasters, electric can openers, food processors, et cetera.” The court noted that all of these items are used to perform a “specific active function” such as “toasting, cutting, and chopping.”

The Armstrongs argued that the pool had a “specific function” of aquatic exercise and recreation and therefore fit within the dictionary definition of “appliance.” The court commended them for their creative argument but did not find it convincing.

The court concluded that a pool is unambiguously not within the meaning of the term “household appliance” because it does not perform a “specific active function” like the other items it listed. Because the swimming pool was not considered a “household appliance,” the exception to the water damage exclusion did not apply. Therefore, there was no coverage under the policy.

The decision of the lower court in favor of the insurer was affirmed.

Armstrong vs. Farmers Insurance Company of Idaho-No. 34250-Supreme Court of Idaho-April 2, 2009-205 Pacific Reporter 3d 1203