Monthly Archives: September 2015

Florida to Decide What Test Applies When Concurrent Multiple Perils Cause a Loss

For years, Florida courts have been seesawing between two different doctrines to determine whether there is coverage under a property policy when two perils – one excluded and one included — combine to cause a loss.  Two districts of the state’s intermediate level appellate court have applied one test and a third has applied another, with the most recent decision being American Home Assur. Co. v. Sebo, 141 So.3d 195 (Fla.Ct.App., Sep. 18, 2013).  On October 7th of last year, the state’s highest court accepted review in the Sebo matter, and oral argument was conducted on September 2, 2015.  Some clarity will finally emerge in the Sunshine State with respect to this issue. When multiple perils combine to cause a

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Posted in Anti-Concurrent Causation, Efficient Proximate Cause, Faulty Workmanship or Design, Homeowners Coverage, Hurricane Wilma, Water

Under Illinois Law, Mine Subsidence Held to Be a Type of Excluded Earth Movement

Ever since Mattis v. State Farm Fire & Cas. Co., 118 Ill.App.3d 612, 73 Ill.Dec. 907, 454 N.E.2d 1156 (1983), Illinois courts have held that an earth movement exclusion contained in a first-party policy applies only to earth movement due to natural causes.  At the beginning of this month, however, a federal court in Missouri construing Illinois Law found otherwise with respect to mine subsidence.  In Hutchinson v. Pacific Indem. Co., 2015 WL 5139183, 2015 U.S. Dist. LEXIS 112239 (E.D.Mo., Sep. 1, 2015), the court held that an earth movement exclusion was unambiguous and clearly barred coverage for such a loss. The policyholders owned a home in Alton, Illinois that was totally destroyed by “a mine subsidence event” on May

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Posted in Ambiguity, Earth Movement, Exclusions, Subsidence

Tennessee Court: Requirement that Insurers “Make Available” Sinkhole Coverage Does Not Require Policyholders Be Notified

Since 2007, Tennessee statutes have required that homeowners carriers “make available” insurance coverage for sinkhole losses.  Last Friday in  Patterson v. Shelter Mut. Ins. Co., 2015 Tenn. App. LEXIS 734, 2015 WL 5320231 (Tenn.Ct.App., Sep. 11, 2015), a unanimous panel of the state’s intermediate level appellate court rejected arguments that this required that policyholders be notified of that fact, however, finding that the term meant only that such coverage must be “accessible or obtainable” upon request. The insureds alleged that their home was damaged by sinkhole activity in March of 2011.  The insurer denied, contending, inter alia, that while the contract of insurance did not expressly include or exclude sinkhole loss, it did bar coverage for damage caused by “the

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Posted in Earth Movement, Homeowners Coverage, Regulation, Sinkhole

Colorado Court Conducts a Clinic on Explosions

Earlier this month in Paros Properties v. Colorado Cas. Ins. Co., 2015 WL 5139293, U.S. Dist. LEXIS 116939 (D.Colo., Sep. 2, 2015), a federal court in Colorado addressed what constitutes an explosion.  After a mudslide knocked down part of its building, the insured contended that the structure had sustained a “violent breaking apart” and therefore an explosion, but the judge held otherwise.  In her opinion, the term “explosion” required that a force from within the object cause it to expand violently and burst apart in all directions. The insured owned a commercial building in Boulder, a city which experienced unprecedented rainfall in September of 2013.  On September 12th, “a violent flow of water, mud, rocks, trees, and other debris traveled

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Posted in Collapse, Exclusions, Explosion, Mudslide, Water

Eleventh Circuit: Inventory Computation Exclusion Bars Alabama Employee Theft Claim

In February, we reported on an Alabama federal court decision that barred an insured from recovering for employee theft where the only evidence of shortage was a comparison between computer records and a physical inventory conducted after the malefactor had been discharged.  On August 6th, a unanimous panel of the Eleventh Circuit affirmed in W.L. Petrey Wholesale Co. v. Great Amer. Ins. Co., 2015 U.S. App. LEXIS 13738, 2015 WL 4646599 (11th Cir., Aug. 6, 2015).  The judges held that the policy’s inventory computation exclusion was unambiguous and that inventory computation evidence was only admissible to prove the amount of loss after the existence of loss had been shown by other means. As we noted earlier this year, the insured

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Posted in Conditions, Exclusions, Theft or Dishonesty
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.
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