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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

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

Washington Supreme Court Misses Opportunity to Clarify the Meaning Of “Collapse”

Washington State has long been a jurisdiction with no judicial pronouncement as to the meaning of the term “collapse” in a property insurance policy, but that changed last Thursday when the state’s Supreme Court issued its decision in Queen Anne Park Homeowners Ass’n v. State Farm Fire & Cas. Co., 2015 WL 3795796, 2015 Wash. LEXIS 695 (Wash., Jun. 18, 2015).  The court found that the term, as used in the insurance policy before it, was ambiguous.  It then adopted a definition of “collapse,” but its use of uncertain terms in that definition may only lead to further ambiguity, and the likely result will be yet more expensive litigation concerning older policies that contain similar “collapse” language. The Queen Anne

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Posted in Ambiguity, Collapse, Hidden Decay
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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