Borrowing a quote from Chip Merlin’s post, Dead Bodies–Are They a Covered Peril?:

Some of the most unnerving claims an adjuster experiences are those concerning dead bodies, and we have had many recent questions regarding the deceased and what to do with them. Particularly, is there coverage under the homeowner’s policy for clean up for both the dwelling and personal property? Are dead bodies’ pollutants? And what about self inflicted situations; are they excluded as intentional acts?

The quote above came from Christine Barlow, a CPCU and assistant editor of the FC&S Bulletin many years ago.

No doubt about it, claims involving property damage caused by a dead body raise a lot of questions and these are the types of claims where the wording in the policy exclusions really matter.

In his post, Chip cited to a case where the court denied coverage for the loss, but the response from FC&S Bulletin said coverage often applied in dead body cases.

[d]ead bodies and their effluences are not considered pollutants, so coverage exists for the clean-up and removal of remains from the dwelling. Regarding property coverage that is on a named peril basis, the actual cause of loss is the deciding element for coverage. So when you see dead people, remember that there is coverage in many instances. 

A new case was just released on Friday, April 10, addresses one insurance company’s attempt to avoid paying for the clean-up and emergency services for the clean-up of a decomposing body in the home.1 The opinion does not tell us who passed away, but Mr. John Gerena (not the deceased) hired Accident Cleaners, Inc., to do cleaning and emergency services. Accident Cleaners, using the assignment of benefits, made a claim with Universal Insurance Company of North America but the claim was not paid in full. When Accident Cleaners sought to get paid for the work they did at the Gerena home, Universal of North American said no. The trial court also said no. The argument adopted by the trial court was that Accidental Cleaners did not have an insurable interest at the time of the loss. Accidental Cleaners was not given the assignment of benefits until later when it did the clean-up. The insurance company argued, “only a person with an insurable interest at the time of loss can enforce the contract under the plain language of section 627.405,* which provides:

(1) No contract of insurance of property or of any interest in property or arising from property shall be enforceable as to the insurance except for the benefit of persons having an insurable interest in the things insured as at the time of the loss.

(2) "Insurable interest" as used in this section means any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment.

(3) The measure of an insurable interest in property is the extent to which the insured might be damnified by loss, injury, or impairment thereof.

Acccidential Cleaners appealed and Florida’s Fifth District Court of Appeal reversed the decision, ruling that the assignment of benefits for the clean-up was valid and that the trial court had ignored nearly 100 years of law.

Appellee’s argument ignores that the right to recover is freely assignable after loss and that an assignee has a common-law right to sue on a breach of contract claim. Dating back to 1917, the Florida Supreme Court recognized that provisions in insurance contracts requiring consent to assignment of the policy do not apply to assignment after loss. 

It seems as if Universal was trying anything to save money on this claim. Some issues to consider:

  • What policy language did the contract with insurance company include?
  • Did the company try to deny the claim based on the decomposing body causing pollution?
  • Would the company pay for the expense of cleaning up a dead body f it had been Mr. Gerena had hired the company and paid out of pocket?

If you haven’t already done so, check out Sean Shaw’s post from yesterday about assignment of benefits, The Sky Is Falling: Assignment of Benefits–This Year’s Insurer "Crisis"

Will Florida’s legislature try to make a change to how assignments of benefits are done in Florida? The proposed bill is up in Senate Judiciary Committee next Wednesday at 2:00pm. You can watch the discussion on the Florida Channel.

For more background on assignment of benefits, check out:

Proposed Substitute for Florida HB 669 – Assignment of Benefits

AOB and the Industry who Cried Wolf

Assignment of Insurance Proceeds After Loss
Insurance Carriers’ Challenges To Assignments Of Benefits

1 Accident Cleaners, Inc. v. Universal Ins. Co., 5D14-352 (Fla. 5th DCA April 10, 2015).