For nearly a century, courts and commentators have treated fortuity as if it were a natural law of insurance rather than what it truly is: a judicial construct born of maritime insurance history, habit, and line-drawing. It is recited reflexively, invoked solemnly as if it has been cited since the inception of property insurance as a product. The longer one studies fortuity and its genesis, the harder it is to avoid a simple question: Should it ever have become part of the lore of American property insurance?

The classic justification is familiar. Insurance covers risks, not certainties. Property insurance, we are told, is not a warranty of soundness or durability. Loss must be accidental, fortuitous, and unexpected. The Mellon case said it first. 1 Chute repeated it. 2 Courts nodded along. And yet, as the insurance defense bar itself candidly admitted, fortuity has proven to be a remarkably weak reed on which to deny coverage. The law review article Fortuity: The Unnamed Exclusion is worth quoting verbatim:

[T]he doctrine has been always difficult to use as a ‘defense’ in practice. Fortuity has been more honored in the breach than in the observance. Since Gaunt and Mellon, courts have consistently paid lip service to the concept, while finding a variety of reasons to rule in favor of the insured. As Lord Summer stated in Gaunt, meeting the burden of proof and showing that a loss is fortuitous is ‘easily done.’ Cases in which the courts have been convinced that particular loss was nonfortuitous in nature have been few and far between.

Second, judicial disfavor has increased in the last two decades, and recent decisions have effectively emasculated any assertion that a particular loss is nonfortuitous (and, therefore, noncompensable) by circumscribing the doctrine even further in theory. Courts increasingly analogize to contract law, which defines ‘a fortuitous event’ as one dependent on chance insofar ‘as the parties to the contract are aware.’ This converts the doctrine from an objective standard (‘Was the loss certain to occur?’) into a subjective one (‘Did the insured know that the loss was certain to occur when the policy was issued?’). A physical certainty, such as the settling and cracking of the dwelling or the collapse of the ore-processing plant, is legally ‘fortuitous’ so long as the insured was unaware that it was going to happen. Indeed, the present standard is arguably a completely subjective one. Even if the design defects which caused the collapse of the ore-processing plant would have been readily apparent to a reasonably competent engineer, the loss is still ‘fortuitous’ so long as the named insured was unaware of the existence of any deficiencies.

Third, any loss that could be shown to be nonfortuitous under the modern or ‘standpoint-of-the-insured’ rule might still be compensable because of the concurrent cause doctrine. The rule has developed that any loss caused by a covered peril (such as negligence in one of its many forms) remains compensable even though an excluded peril was a substantial, or even a predominant, contributory factor. California courts have gone one step further and allow recovery when negligence is merely one of the concurrent causes of loss; the insured need not demonstrate that negligence was the ‘prime’ or ‘moving’ cause. Even a genuinely nonfortuitous event under the modern rule would still be compensable if negligence figured in the chain of causation. 3

That passage does more than criticize the doctrine. It exposes its fragility. Fortuity began as a judge-made objective inquiry into inevitability. It has since morphed into a subjective inquiry into knowledge. The result is a doctrine that is endlessly invoked by property insurers, endlessly qualified by judges, and rarely decisive to a coverage outcome.

From the policyholder’s standpoint, this raises an even more fundamental problem. Why, exactly, can insurers and insureds not insure inevitable loss when the uncertainty lies not in whether the loss will occur, but when it will occur? We do this every day in other lines of insurance.

Life insurance is the clearest example. Every human being will die. There is no fortuity in death itself. The only uncertainty is timing. Insurers underwrite that temporal risk, price it actuarially, and decide whether to insure it at all. No court insists that death must be “accidental” or “unexpected” for coverage to attach. The inevitability of the loss is not a bar; it is the premise of the product.

Health insurance operates on the same logic. Every person will need medical care. Everyone will get sick, injured, or worn down in some fashion. The uncertainty lies in which condition, when it will arise, and how severe it will be. Pooled across thousands or millions of policyholders, that temporal and probabilistic risk becomes insurable. No one pretends that illness is fortuitous in the old sense. It is insured because the timing and magnitude are unknown, not because the event itself is unexpected.

Modern warranty and equipment breakdown coverage make the point even sharper in the property context. Machinery will fail. Components will wear out. Systems will break down. These products exist precisely to insure against failure that is expected to occur eventually. They simply draw the boundaries differently, through time limits, maintenance requirements, exclusions, and pricing. The law has no trouble enforcing those contracts nor overlooking the fortuity principle.

Seen in that light, fortuity begins to look less like a principle of insurance and more like a historical artifact. It was a judicial solution to an underwriting problem at a time when insurers lacked the tools, data, and product sophistication to price certainty. Courts used fortuity to keep property insurance from sliding into warranty by implication. But that does not mean fortuity is inherent to insurance itself. It means it was convenient and made up.

Today’s all-risk policies are exclusion-driven documents. They exclude wear and tear, latent defect, corrosion, rot, settling, cracking, mechanical breakdown, design defect, prior loss, and a host of other conditions in excruciating detail. If insurers do not wish to insure the inherent nature of a property’s demise, they are fully capable of saying so. If they do wish to insure it, they know how to write that coverage as well. The marketplace already proves this every day.

Which brings us back to the uncomfortable question. If insurance can lawfully and practically insure inevitable loss when framed as temporal risk, why do we continue to rely on an unwritten, judge-made doctrine to do work that policy language is perfectly capable of doing on its own? Why do courts keep chasing fortuity down an increasingly abstract rabbit hole when exclusions, conditions, and underwriting already define the bargain?

Perhaps fortuity made sense when Mellon and Chute were decided. Perhaps it served a necessary function at a particular moment in insurance history. But whether it should continue to occupy center stage in modern property insurance law is a question worth asking and one that deserves a hard look, not just another citation.

This post will end my recent discussion and study of fortuity. For those who missed my recent article on the topic, I suggest you read, What Does “Fortuitous” Mean? Why Is “Fortuity” So Important to Property Insurance?, The Basics of All Risk Insurance and Fortuity, The First Discussion of Fortuity by an American Court, and Is a Crack to an Opal a Fortuitous Loss.

Thought For The Day 

“For every complex problem there is an answer that is clear, simple, and wrong.”

—H. L. Mencken

1 Mellon v. Federal Ins. Co., 14 F.2d 997 (S.D. N.Y. 1926).

2 Chute v. North River Ins. Co., 172 Minn. 13, 214 N.W. 473 (Minn. 1927).

3 Stepen A. Cozen and Richard C. Bennett, Fortuity: the Unnamed Exclusion, 20 Forum 222, 223 (Jan. 1985).