Blog Archives

Coverage to Rebuild a Foundation to Comply with Changed Building Codes Following a Fire are Subject to Code-Upgrade Endorsement’s Sublimit

Does the efficient proximate cause rule serve to afford coverage for the additional costs to rebuild the foundation of a home in compliance with changed building code requirements beyond the sublimit of liability of an optional building ordinance or law endorsement?  In an opinion ordered published on December 21, 2016, the Washington Court of Appeals said no, denying a homeowner the full cost of a new foundation as part of the repair of fire damage. Lesure v. Farmers Ins. Co. of Washington, Wash. App. No. 48045-0-II, 9/20/16 (ordered published 12/21/16). Loretta Lesure insured her home under a policy issued by Farmers Insurance Company of Washington. Coverage A of the policy covered the cost to repair or replace the dwelling up

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Posted in Efficient Proximate Cause

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

Ninth Circuit: Under Arizona Law Mudslide Can Be Covered as the Direct Result of Fire

Last Friday, a unanimous panel of the Ninth Circuit held that loss from the excluded peril of mudslide occurring one month after a wildfire could be covered as the “direct” result of the blaze.  In Stankova v. Metropolitan Prop. & Cas. Ins. Co., 2015 WL 3429395, 2015 U.S. App. LEXIS 8935 (9th Cir., May 29, 2015),  it reached that result even though Arizona has not adopted the efficient proximate cause rule, saying that it did not need to apply that doctrine to determine that the mudslide “could have been directly and proximately caused by the wildfire.” It also blithely ignored anti-concurrent causation (ACC) language, which is given effect in Arizona, as “inconsistent with Arizona’s standard fire insurance policy, which insures

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Posted in Anti-Concurrent Causation, Causation, Direct Physical Loss or Damage, Efficient Proximate Cause, Exclusions, Flood, Mudslide, Wildfire

New Jersey Trial Court Holds Storm Surge Not Subject to Flood Sublimit Where Policy Expressly Includes “Ensuing Storm Surge” in Named Windstorm Coverage

In recent years, many courts have held that storm surge is a species of excluded flood loss; we reported on a New York example in July.  This week, in Public Serv. Enter. Group, v. ACE Amer. Ins. Co., 2015 WL 1428370, Unpub. LEXIS 620 (N.J.Super., Mar. 23, 2015), a New Jersey trial court granted summary judgment to Public Service Electric & Gas (PSEG) and held that the flood sublimit did not apply to a claim for Superstorm Sandy loss from storm surge where the contracts of insurance specifically recited that coverage for a “named windstorm” – which was not subject to any sublimit  –  included “ensuing storm surge.” Eight large PSEG generating stations and a number of smaller distribution facilities

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Posted in Causation, Efficient Proximate Cause, Ensuing Loss, Flood, Superstorm Sandy, Windstorm

Wisconsin Adds “Septage” To The List Of Substances Deemed To Be Pollutants

In Preisler v. Kuettel’s Septic Service, LLC, et al., 2014 WL 114325 (Wisc.App., Jan. 14, 2014), the intermediate level of appellate court in Wisconsin recently held that “septage” – a combination of water, urine, feces, and chemicals that is used as a fertilizer – was “unambiguously a pollutant.”  The case involved the scope of comprehensive general liability (“CGL”) coverage, but the CGL policy exclusions at issue were virtually identical to pollution exclusions commonly found in first-party contracts of insurance.  The decision is important to property carriers as a result, and it also rejects a number of arguments that first-party insureds frequently make in an effort to limit or avoid the application of such language. The Preislers owned a dairy farm

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Posted in Efficient Proximate Cause, Exclusions, Pollution, Reasonable Expectations
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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