The New York Public Adjuster Association Annual Conference is this week at the TWA Hotel. Chip Merlin will be giving a presentation on Friday, October 9, on Mastery is the Key to a Lasting Public Adjusting Business, Quality Work, & Happy Clients.

The Northeast recently experienced a nor’easter that brought flooding and wind speeds approaching 75 mph in some areas. Merlin Law Group attorneys Javier Delgado, Liberty Ritchie, Miguel Martinez, and I will be presenting a blog series this week, with each of us addressing the anti-concurrent causation provision in specific Northeast states.

An anti-concurrent causation clause will exclude coverage when a prescribed excluded peril, alongside a covered peril, either simultaneously or sequentially causes damage to insured property. A flood policy covers only damage caused by flooding. An HO2 policy typically covers direct physical loss, including wind damage, and excludes flood damage. In instances such as hurricanes, flood and wind effects may require the insured to file claims with both the flood and HO2 carriers, assuming the insured has a flood policy. The analysis becomes more dire in areas where flood unexpectedly hits a non-designated flood area, and the insured does not carry private flood insurance.

An anti-concurrent causation clause will typically be contained in the lead-in language of an HO2 policy. An example of anti-concurrent causation language is contained below:

We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area.

In the Garden State, New Jersey courts have recognized that if a property insurance policy contains an anti-concurrent causation clause, coverage is excluded for a loss attributable to a given cause regardless of whether any other cause, event, material, or product contributed concurrently or in any sequence to that loss. 1 The insurance policy must unambiguously state that an exclusion will operate notwithstanding any concurrent or sequential causation issues. 2

An example of when a New Jersey court applied an anti-concurrent causation provision in the wind and flood context was in Maritime Park, LLC v. Nova Casualty Company. 3 Maritime involved Superstorm Sandy damage to a restaurant in Liberty State Park. The insured sought coverage under the policy’s civil authority provision, which granted coverage when a “covered cause” of loss causes damage. The policy also contained an anti-concurrent causation provision stating that flood damage “is excluded regardless of any causes or events that constitutes concurrently or in any sequence to the loss.”

The evidence in the case showed that the property sustained both wind and flood effects from Hurricane Sandy. In awarding summary judgment to the carrier on the civil authority issue, the Judge found that the effect of the flood was one of the reasons that the restaurant was closed and found that “[d]ue to the anti-concurrent cause provision, the Civil Authority language affords no coverage where the restrictions on Park access were produced, at least in part, by flooding. 4

Alternatively, when an insurance policy in the Garden State does not contain an anti-concurrent causation clause, New Jersey courts will apply the efficient proximate cause doctrine, otherwise known as the Appleman’s rule. In this analysis, an excluded cause will bar coverage only if the excluded peril was the efficient proximate cause of the loss. In other words, the excluded peril needs to set other causes in motion which, in an unbroken sequence and connection between the act and final loss, produces the result for which recovery is sought. 5

The Keystone State is no different. Under Pennsylvania law, lead-in clause language stating that any loss caused directly or indirectly by enumerated exclusions “regardless of any other causes or even that contributes concurrently or in any sequence to the loss” will negate application of the efficient proximate cause doctrine. 6 Like New Jersey, Pennsylvania will use the efficient proximate cause analysis as a fallback in the absence of an anti-concurrent causation clause. 7

I will be unable to attend this week’s NYPAA event as I will be taking my oldest son to Disney for his birthday. I will miss seeing the public adjusters at the event, the presentations, and the Connie Cocktail lounge. However, I cannot say I will miss the mid-afternoon dismissal into the Van Wyck Expressway for my commute home to Pennsylvania.

1 Mac Property Group LLC & The Cake Boutique LLC v. Selective Fire and Cas. Ins. Co., 473 N.J.Super. 1 (2022).

2 Flomerfelt v. Cardiello, 202 N.J. 432 (2010).

3 Maritime Park v. Nova Cas. Co., No. A-3554-17T2, 2019 WL 1422918, at *5–6 (N.J. Super. Ct. App. Div. Mar. 29, 2019).

4 Id. at p. 6.

5 New Jersey Transit Corp. v. Certain Underwriters at Lloyd’s London, 461 N.J. Super. 440, 460 (N.J. App. 2019).

6 T.H.E. Ins. Co. v. Charles Boyer Children’s Trust, 455 F.Supp.2d 284, 296–97 (M.D. Penn. 2006).

7 Marks v. Lumbermen’s Ins. Co. of Philadelphia, 160 Pa.Super. 66, 49 A.2d 855 (1946).