In October 2011 SAVEAI and APAI jointly wrote a letter to the Amherst Island Mutual Insurance Company (AIMIC), posing 12 questions regarding homeowners insurance. The 12 questions covered construction, operation and claim adjusting. Overall, the most important question was whether AIMIC would insure the turbines, either from a casualty or a liability perspective.
Of the 12 questions, AIMIC responded pretty well to most of them – or at least as well as they could at this point. The most important part of the response was that AIMIC wasn’t insuring the turbines and had no interest in doing so, and wished to remain concentrated on their servicing the homeowners on the Island. What was left unanswered is the case where a turbine causes a problem (like excessive noise or ice throw) and the AIMIC-insured homeowner gets added to a lawsuit against the project developer. To my knowledge AIMIC has not sent a clarifying letter to the project participants (and likely doesn’t even know who they are). The developer, according to the contracts I have seen, is supposed to keep a $2M liability policy in place to protect the participant. One wonders what happens if the $2M isn’t enough or the policy lapses. Also left unsaid is what might happen to existing rates if losses start to mount.
At the end of AIMIC’s response is the statement that the Insurance Industry is still studying the types of questions that were posed in the letter. I’ll bet they are. Overlaying a residential area with an industrial use creates all sorts of potential issues, issues that ought to have been settled before it ever got to this point. My prediction is that these issues will end up being settled in court after an incident, making this area of the law a lucrative one for the lawyers.