Manifestation Trigger

What Is a Manifestation Trigger?

In the insurance industry, the term “manifestation trigger” refers to the moment in time in which the policyholder becomes aware of a reason for filing a claim. For example, in the case of home insurance, the manifestation trigger might be when the policyholder discovers that their property was damaged. 

Oftentimes, the manifestation trigger will be later than the date on which the event occurred, since it can take time for policyholders to discover the cause of the damage.

How Manifestation Triggers Work

Although it may seem like a simple concept, determining the exact date that a covered event occurred can be complicated. For instance, a homeowner might discover that their property has been infested with mold only after returning home from a vacation. In that instance, the manifestation trigger would be the date when they discovered the mold, even if the mold started accumulating many days or even weeks beforehand.

These nuances are important to insurance companies because they can determine whether they are responsible for covering the policyholder’s claim. Depending on the nature of the policy, an insurer’s responsibility might not apply if the manifestation trigger occurred after the end of the coverage term. On the other hand, a policyholder who discovers such an event after their insurance has expired might be able to argue that the insurer is still responsible. In that instance, they would need to demonstrate that the problem actually developed while they were still insured.

To help navigate these types of arguments, the insurance industry uses specialized terms such as “manifestation trigger” to refer to some of the different types of dates and discoveries that might occur. An exposure trigger, for instance, is the date when a policyholder first became exposed to harm, whereas an injury-in-fact trigger is the date on which the injury or illness became known. Continuous triggers, on the other hand, are ranges of time that apply when the damages build up gradually.

This kind of language can become especially complicated in situations where the policyholder changed policies several times during the relevant time period. In those situations, it can become very difficult to precisely determine who is responsible for honoring the various claims.

Real-World Example of a Manifestation Trigger

To illustrate, consider the case of Don's Building Supply, a Texas wholesaler of exterior insulation and finish systems that were installed on various homes built between late 1993 and late 1996. While the homes were being constructed, Don's was insured by three consecutive general liability policies issued by OneBeacon. Between 2003 and 2005, various homeowners filed suit against Don's, alleging the insulation was defective and had allowed moisture to seep inside the homes, resulting in rot and other damage.

The homeowners argued that the damage began to occur in six months to a year after installation, while the insurance policies were in effect. However, the damage was hidden from view and became apparent only after the policy period ended. Ultimately, this debate was only settled once it reached the Texas Supreme Court. The question, as paraphrased by the Supreme Court, was whether “an insurer’s duty to defend [is] triggered where damage is alleged to have occurred during the policy period but was inherently undiscoverable until after the policy period expired?”

Ultimately, the Court answered “yes” to this question, ruling that the key date that triggered coverage was when the injury occurred, not when the homeowner discovered it. The manifestation trigger, in other words, was found to be the decisive moment in this case.