Insurer wins appeal over earthquake-damage claim

An insurance company has won their appeal against a case where the owner of a top-floor unit demanded an insurance payout for water damage from broken pipes caused by the Tohoku earthquake.

The 6-storey apartment was built in 1982 and is located in Suginami-ku, Tokyo. The March 11 Tohoku earthquake resulted in a seismic intensity level of -5 to +5 in Suginami-ku. The shaking had caused the pipes of the rooftop electric water heater to burst, which then leaked into the apartment below. The 69 year old owner of the damaged apartment, who happens to be a lawyer, made an insurance claim of 1,400,000 Yen. However, Tokio Marine & Nichido Fire Insurance rejected his claim as the clause in his insurance policy said they will not pay out on damages caused by earthquakes.

The owner took Tokio Marine to the Tokyo District Court. The district court ruled that the clause was pertaining to a very large and unusual earthquake and the insurer cannot say that they are exempt from payouts from a Shindo 5+ earthquake. Tokio Marine was ordered to pay 1,200,000 Yen to the apartment owner.

The insurer took the case to the Tokyo High Court which ruled in their favor. The court said that the wording in the contract clause did not imply any particular strength or scope of an earthquake. When considering the earthquake-resistance level of the building and the shaking caused by the earthquake, the disclaimer used by the insurer was correct.

Source: The Yomiuri Shimbun, March 19, 2012.

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