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Minnesota Harmonizes the Mortgage Clause and the Vacancy Clause

Two days ago, Minnesota’s highest court unanimously held that a mortgagee’s recovery for vandalism damage to a vacant building is only barred by the vacancy clause if the insured’s acts caused the vacancy.  The decision is  Commerce Bank v. West Bend Mut. Ins. Co., 2015 WL 6498468, 2015 Minn. App. LEXIS 85 (Minn., Oct. 28, 2015)   If breached, the vacancy clause still automatically operates to void coverage for the insured, but it does not necessarily do the same for the mortgagee, and the determination entails addressing a question of fact. The policyholder had a building in Burnsville that had been vacant for four months when the mortgagee/bank was added to the contract of insurance.  Seven months later, while still vacant,

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Posted in Mortgagees, Vacancy and Unoccupancy, Vandalism

Minnesota Holds “Comparable Material and Quality” Requires Wholesale Replacement Where Undamaged Siding Is Faded

Matching issues are frequently problematic when storms damage only portions of an insured structure’s exterior and it proves impossible to replace the damaged sections with material that is an exact match for the rest of the building’s roof or siding.  Earlier this month, the Minnesota Supreme Court held that the phrase “comparable material and quality” means material that is suitable for matching; with respect to color, a reasonable match – not an identical match – is all that is required.  In Cedar Bluff Townhome Condominium Ass’n. v. American Family Mut. Ins. Co., – N.W.2d – , 2014 WL 7156914, 2014 Minn. LEXIS 661 (Minn., Dec. 17, 2014), however, the court held that that meant that all of the siding on

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Posted in Direct Physical Loss or Damage, Hailstorm, Replacement Cost, Valuation
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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