An unknown amount of oil escaped from the hose nozzle of a home heating oil delivery truck during the delivery process at an insured's residence. The oil spilled on the ground, seeped into the basement, and created an offensive odor that caused undisputed damage to personal property in the house. Legal action brought by the insureds resulted in a trial court judgment that their insurance coverage was applicable to the loss. The insurer appealed.

The pertinent section of the policy provided that, with respect to unscheduled personal property coverage, the company insured for "accidental direct physical loss to property described. . . .caused by" 17 specifically enumerated perils, including "Vehicles." The term "Vehicles" was not defined.

The trial court had concluded that the personal property loss was "a direct and immediate result of the unloading of the oil from the delivery truck and the spillage or escape of that oil." On appeal, the insurer said that its policy did not require direct physical contact of a vehicle with damaged property for the peril in question to apply. But it said that coverage would be provided "only when the damage was caused by a vehicle being 'used' as a vehicle."

The appeal court was not persuaded, concluding that "the truck was being used exactly as it was designed and constructed to be used." (It brought the oil to the house and its motor pumped the oil that "infected" the property.) The judgment of the trial court was affirmed in favor of the insureds and against the insurance company.

(STATE FARM FIRE AND CASUALTY INSURANCE COMPANY, Appellant, Cross-Appellee v. AULICK ET UX., Appellees, Cross-Appellants. Kentucky Court of Appeals. No. 88-CA-2293-MR. December 15, 1989. CCH 1989-90 Fire and Casualty Cases, Paragraph 2331.)