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California Court Holds Pre-Loss Preventative Measures To Avert A Collapse Are Not Covered as Mitigation.

Last week in Grebow v. Mercury Ins. Co., 2015 Cal. App. LEXIS 948, 2015 WL 6166610 (Cal.App., Oct. 26, 2015), a unanimous panel of California’s intermediate level appellate court rejected arguments that expenses incurred to prevent the collapse of a portion of the policyholders’ house were covered as mitigation.  The court held that the policy provision requiring an insured to protect the property from further damage was not analogous to a sue and labor provision and did not apply until after a loss that already occurred because to hold otherwise would effectively convert the contract of insurance into a maintenance agreement. The insureds owned a house in Tarzana.  In early 2013, concerned over recurring watermarks, they had a general contractor

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Posted in Ambiguity, Collapse, Corrosion, Hidden Decay, Homeowners Coverage, Preservation and Protection, Sue and Labor

Florida, Georgia and Texas Appraisal Update: Is Causation A Coverage Question For The Court or A Damages Question for The Panel?

In most jurisdictions, underlying coverage issues must be resolved prior to invoking appraisal in a first-party property claim.  The question of what constitutes a coverage issue (typically reserved for a court’s judicial determination) and what constitutes a damage issue (appropriate for an appraisal panel’s consideration), however, is not always readily apparent. A routine subject of this particular appraisal debate is whether causation is a coverage or a damages inquiry, and recent decisions under Florida, Georgia and Texas law are evident of two things: (1) the determination of the issue is, in large part, factually dependent; but (2) the debate is far from over. In a recent appellate decision, Citizens Prop. Ins. Corp. v. Denetrescu, 2014 WL 1225124, — So.3d —

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Posted in Arbitration and Appraisal, Causation, Preservation and Protection, Wear and Tear
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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