In the aftermath of Hurricane Sandy, I felt it was a good idea to look at the Northeast when exploring total loss standards. This week, I look at Massachusetts.
After perusing through numerous Massachusetts cases, I found no specific rule other than the most general rule used. In 1903, the Supreme Judicial Court of Massachusetts reviewed several fire policies in one case. It made a determination similar to that of the Florida Supreme Court stating,
[W]here the law prohibits the repair of a building which has been partially destroyed by fire, in the absence of any express provision in the policy to the contrary the loss is not meansured by the sum required to restore the building to its condition before the fire, but it is total…1
The Court reasoned that,
The building laws were the same at the time of the fire as at the time the policies were issued. The only change in the situation was in the physical condition of the building, and that change was caused wholly by the fire. The building laws simply constituted one of the conditions of the situation. While it is true that by reason of their existence the loss caused by the ravages of the fire was greater than it otherwise would have been, it is none the less true that the sole operating cause of the change in the building was the fire, and, as above stated, in the absence of any provision in the policy expressly excluding from the damages the part arising out of that condition, that part is not to be excluded, but is to be regarded as primarily the result of the fire, or as loss or damage by fire.
Massachusetts courts will hold that when laws and ordinances mandate a building can not be repaired, it will be deemed a total loss, even if portions of the building are still standing. This, of course, is if the policy doesn’t specifically state otherwise.
Stay tuned next week for another look at total loss.
1 Hewins v. London Assur. Corp., 68 N.E. 62, (Mass. 1903).