Blog Archives

Insurers From Coast to Coast Notch Suit Limitation Victories

Over the last several months, courts in Washington, Kansas, and Virginia have awarded victories to carriers asserting a suit limitation defense, and there are three valuable takeaways from the decisions.  First, the insurer need not demonstrate that it was prejudiced by the failure to file suit within the limitations period; suit limitation provisions are not like notice of loss or proof of loss clauses.  Second, the clock starts running on the suit limitation period when the policyholder has knowledge of the occurrence which ultimately gives rise to his or her loss, not when he or she has knowledge of the cause of that occurrence.  Third, the provision is a contractual limitations period and, as such, not subject to state laws

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Posted in Collapse, Earthquake, Prejudice, Suit Limitation, Water

Massachusetts Court Refuses to Apply Discovery Rule to Commencement of the Suit Limitations Period

Yesterday in Nurse v. Omega U.S.  Insurance., Inc., 2015 Mass. App. LEXIS 158, 2015 WL 5774390 (Mass.App., Oct. 5, 2015), a unanimous panel of Massachusetts’ intermediate level appellate court held that the two-year suit limitation provision in a first-party contract of insurance was not subject to a discovery rule.  The decision was a case of first impression in the Bay State’s courts (although two federal cases in the Commonwealth had split on the issue). The insured owned a three-unit residence in Boston which was vacant in December of 2009.  The heat was turned off at the time.  On December 19th, records from the city’s Water and Sewer Commission showed that the rate of water usage at the property “increased dramatically”

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Posted in Ambiguity, Freezing, Homeowners Coverage, Suit Limitation, Water

New Jersey Judge Writes a Primer on How Not to Draft a Denial Letter

Last month, a federal trial court in New Jersey shot down an insurer’s arguments that it had unambiguously denied coverage for Superstorm Sandy damage in a letter to the insured.  In Liguori v. Certain Underwriters at Lloyds, 2015WL 4402851. 2015 U.S. Dist. LEXIS 93090 (D.N.J., Jul. 17, 2015),  the judge found that correspondence announcing that the carrier was “pleased to inform you” that wind damage was covered while flood was “expressly excluded” and concluding with what he called an “open-ended statement that the letter could be amended should new information become available” simply did not pass muster as a formal denial. The insureds owned a home in Seaside Heights that was demolished by the storm on October 29, 2012, and

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Posted in Homeowners Coverage, Hurricane, Loss Adjustment, Suit Limitation, Superstorm Sandy

New York’s Highest Court Holds a Two-Year Suit Limitation Provision Can Be Unenforceable

In answer to a question certified by the Second Circuit, New York Court of Appeals has held that a two-year suit limitation provision in a property insurance policy – which the court acknowledged was not an “inherently unreasonable” provision – was unenforceable under the factual circumstances of the case before it.  Executive Plaza, LLC v. Peerless Ins. Co., — N.Y.3d –, 2014 WL 551251, 2014 N.Y. LEXIS 165 (N.Y. Feb. 13, 2014).  In doing so, the court held for the first time that such a limitation period may be rendered unreasonable by what it called an inappropriate accrual date. Peerless Insurance Company issued a $1 million fire insurance policy to Executive Plaza.  This gave Executive the choice to select payment

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Posted in Replacement Cost, Suit Limitation
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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