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Utah Court: Seepage Over A Months-Long Period Is Excluded As Moral Hazard

Two weeks ago in Wheeler v. Allstate Ins. Co., 2015 WL 5714392, 2015 U.S. Dist. LEXIS 131736 (C.D.Utah, Sep. 29, 2015), a Utah court barred coverage for a mold loss caused when a vacant log cabin suffered a long-term water leak.  The policy excluded “seepage or leakage over a period of weeks, months or years,” and the judge held that that language embodied the concept that such a loss was a moral hazard – a preventable risk best assumed by the policyholder rather than by his or her homeowners insurer. The insured owned a seasonal cabin in Duck Creek that was not used during the winter months, and his practice was to leave both the water and the heat turned

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Posted in Ambiguity, Exclusions, Inherent Vice and Latent Defect, Mold, Moral Hazard, Seepage or Leakage, Water, Wear and Tear

Vermont: There is No Cause of Action for Negligence in Adjusting a Property Loss

Last week, the Vermont Supreme Court firmly rejected the notion that an insured can bring a cognizable claim for negligence against his or her carrier in connection with the inspection and handling of a first-party property insurance claim.  In Helena G. Murphy v. Patriot Ins. Co., 2014 VT 96, 2014 WL 3965639, 2014 Vt. LEXIS 101 (Vt., Aug. 14, 2014), the court recognized that the relationship was “fundamentally contractual” in nature and that a policyholder’s rights flowed solely from the insurance policy and the covenant of good faith and fair dealing implied in that instrument. In July of 2007, the insured, Helena Murphy, reported damage to the roof of her house and interior water damage to her homeowner’s carrier, Patriot

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Posted in Homeowners Coverage, Investigation, Loss Adjustment, Mold, Water
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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