Monthly Archives: May 2015

Georgia Court: Policy Does Not Require Insured to Produce Recordings of Her Conversations With the Carrier

On May 20th, a federal court in Georgia held that the standard “requirements in case of loss” language compelling the insured to turn over her books and records during the adjustment process did not require the production of recordings that she had secretly made of her telephone calls with the insurer’s representatives.  In Armstead v. Allstate Prop. & Cas. Ins. Co., 2015 WL 2408049, 2015 U.S. Dist. LEXIS 66030 (N.D. Ga., May 20, 2015), the court rejected arguments that the policyholder’s refusal to disgorge the tapes was a violation of the “no action” clause that precluded her breach of contract and bad faith action because it held that the carrier had not shown that they were material to the adjustment

Tagged with: , ,
Posted in Cooperation, Discovery, Examinations Under Oath, Fire, Homeowners Coverage, Investigation, Loss Adjustment

Indiana Court Nixes Requests for Reinsurance and Reserves

Early last month a federal court in Indianapolis barred a policyholder from seeking the claims and underwriting files of the defendant carrier’s reinsurer in Indianapolis Airport Auth. v. Travelers Property Cas. Co. of Amer., 2015 WL 1548959, 2015 U.S. Dist. LEXIS 45123 (S.D. Ind., Apr. 7 2015).  Several months ago, the same court also shot down the policyholder’s requests for the insurer’s reserves. The insured operated the Indianapolis International Airport, and it began construction on the $1 billion Midfield Terminal Project in 2005 and secured a builder’s risk policy from Travelers to cover the work.  On January 24, 2007, temporary shoring towers collapsed, damaging the building, disrupting the original construction schedule, and generating claims by consultants and contractors.  The policyholder

Tagged with:
Posted in Builders' Risk, Collapse, Discovery, Reinsurance, Reserves

Oklahoma Court Holds the Policyholder Can Also Be the Vandal

Earlier this week an Oklahoma federal court addressed a mortgagee’s claim for vandalism loss – a topic we also discussed in Wednesday’s post.  In American Modern Home Ins. Co. v. Tulsa Fed. Credit Union, 2015 WL 2372549, 2015 U.S. Dist. LEXIS 64491 (E.D.Okla., May 18, 2015), the court rejected an insurer’s argument that because the vandalism was done by the insured, it could not constitute the covered peril of “vandalism” in a situation in which the policy neglected to define that term. The insured owned a house and secured a homeowners policy that also extended coverage to his mortgagee.  The mortgage company instituted foreclosure proceedings and the policyholder vacated the dwelling, but only after removing fixtures and damaging property to

Tagged with: ,
Posted in Ambiguity, Homeowners Coverage, Loss Payees, Mortgagees, Theft or Dishonesty, Vandalism

Pennsylvania Joins Oklahoma, Bans Homeowners Insurers From Attributing Earthquakes to Fracking

Last month we reported that the Oklahoma Insurance Commissioner had issued a bulletin cautioning earthquake insurers against denying claims on the basis that the quake was attributable to a man-made cause, which is to say oil and gas production, rather than to a purely natural one.  Recently, Pennsylvania’s Acting Insurance Commissioner Teresa Miller followed suit, “instructing” homeowners carriers that earthquake endorsements “should cover all earthquakes, whether believed to be ‘naturally occurring’ or caused by ‘human activity.’ ” The Keystone State has not seen the dramatic uptick in earthquake activity that has shattered both nerves and property in Oklahoma in recent years.  Because of the hydrocarbon-rich Marcellus Shale formation, however, it remains a jurisdiction with more oil and gas drilling than

Tagged with: , ,
Posted in Causation, Earthquake, Homeowners Coverage, Regulation

Illinois Court Holds Vacancy Clause Does Not Bar Vandalism and Theft Claim by Mortgagee

In a case of first impression in Illinois, a unanimous panel of the state’s Appellate Court recently addressed the interplay between a vacancy clause and a mortgagee provision and held that the insured’s failure to comply with the former did not preclude recovery by the mortgage company after vandals did over $2 million in damage.  In Old Second Nat’l Bank v. Indiana Ins. Co., 2015 IL App. (1st) 140265, — N.E.3d –, 2015 WL 1283867, 2015 Ill. App. LEXIS 185 (Mar. 20, 2015), it held that the vacancy clause was a condition subsequent to coverage and that its violation therefore only operated to bar the policyholder’s claim even though the structure – unbeknownst to the insurer — had been vacant

Tagged with: , ,
Posted in Conditions, Loss Payees, Mortgagees, Theft or Dishonesty, Vacant or Unoccupied, Vandalism

Iowa Court: Anti-Concurrent Causation Language Mandates That the Jury Determine Whether an Excluded Peril Was One Cause of the Loss

Last month, we discussed a recent Texas Supreme Court decision that enforced an anti-concurrent causation (ACC) clause.  The month of April also saw a unanimous panel on Iowa’s intermediate level appellate court do the same thing.  In Salem United Methodist Church v. Church Mut. Ins. Co., 2015 WL 1546431, 2015 Iowa App. LEXIS 308 (Iowa Ct. App., Apr. 8, 2015), the judges held that ACC provisions unambiguously exclude loss caused by a concurrent combination of excluded perils and included perils and that the question of whether an excluded peril played any causative role must therefore be put to the finder of fact. The policyholder had a church in Cedar Rapids.  On June 11-12, 2008, the Cedar River overflowed its banks,

Tagged with:
Posted in Anti-Concurrent Causation, Flood, Water

Arizona Court: Argument that All Business Income Loss Caused by a Wildfire is Covered is “Off Base”

Several weeks ago in White Mt. Communities Hosp., Inc. v. Hartford Cas. Ins. Co., 2015 WL 1755372, 2015 U.S. Dist. LEXIS 50900 (D. Ariz., Apr. 17, 2015), an Arizona federal court underscored that business interruption losses flowing from a wildfire are only covered to the extent that they stem directly from physical loss or damage to the policyholder’s property.  In other words, loss of income due to the fire in general is beyond the scope of such coverage absent a causal nexus with repairs necessitated by the blaze. The policyholder White Mountain owned a hospital in Springerville, Arizona.  On May 29, 2011, a blaze was started by an abandoned campfire in the nearby Bear Wallow Wilderness Area.  The wildfire ultimately

Tagged with:
Posted in Business Interuption, Causation, Contamination, Direct Physical Loss or Damage, Fire, Smoke and Soot, Wildfire
About The Property Insurance Law Observer
For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
Stay Connected

Email:

Topics
Cozen O’Connor Blogs