Ensuing Losses Caused by Water Damage In Texas
"Ensuing losses" mean losses which follow or come afterward as a consequence. See McKool v. Reliance Ins. Co., 386 S.W.2d 344, 345 (Tex. Civ. App.-Dallas 1965, writ dism'd).
To be an ensuing loss caused by water damage, the mold and fungi would necessarily have to follow or come afterward as a consequence of the water damage. See Merrimack Mut. Fire Ins. Co. v. McCaffree, 486 S.W.2d 616, 620 (Tex. Civ. App.-Dallas 1972, writ ref'd n.r.e.).
In McCaffree, this Court held the fungi and mold damage was excluded because the facts did not support the conclusion that the fungi was caused by water damage. See id.
The facts showed the damage was caused by fungi and termites. See id.
Although this Court held the fungi damage was not covered, this Court did not hold that an ensuing loss of fungi and mold damage would never be covered. See id.
This Court recognized that a set of facts could produce the conclusion that an ensuing loss of an excluded damage was caused by water damage resulting in coverage. See id.
In addition, this Court discussed Employers Casualty Co. v. Holm, 393 S.W.2d 363 (Tex. Civ. App.-Houston 1965, no writ). See McCaffree, 486 S.W.2d at 620.
In Holm, the parties stipulated that the water passing into and under the wood flooring of the insured's house caused it to rot and deteriorate. See Holm, 393 S.W.2d at 366.
The Holm court concluded that, as a matter of common knowledge, the more or less continual application of water to and against a house's wood flooring would cause warping, cracks, and water damage, which finally would result in rot and deterioration. See id.
The court held "the loss which ensued or followed the water damage grew out of and was caused by water damage." Id.