In researching cases in New York, I came across an opinion with language that may come into play in Sandy claims. The case has a simple outcome and does not perform so much analysis that we get lost in the shuffle. The case is Mawardi v. New York Property Insurance Underwriting Association.1

A windstorm damaged the policyholder’s property in Staten Island. The windstorm ripped shingles off the roof, allowing rain and snow to enter and flood the building over the course of several months. The policy stated:

We insure for direct loss to the property caused by:

2. Windstorm or Hail.

This peril does not include loss:

a. to the interior of a building or the property contained in a building caused by rain, snow, sleet, sand or dust unless the direct force of wind or hail damages the building causing an opening in a roof or wall and the rain snow, sleet, sand or dust enters through this opening

The insurance carrier denied the claim.

In the trial court, the insurance carrier argued the insurance policy did not cover the damages since the removal of shingles did not create an “opening” through which the rain and snow entered the property. The carrier also claimed that since the damages occurred over a substantial period of time, they were not covered because the policy only insured against loss which directly resulted from windstorms. The trial court denied the insurance carrier’s motion for summary judgment, stating there were issues of fact concerning the language and terms of the insurance policy.

On appeal, the insurance carrier argued it should have won the case based on the interpretation of the policy exclusion/limitation. Many policyholders are facing similar arguments in their Sandy claims; denying claims because of a policy exclusion/limitation. The one involved in this case was a little different from the typical flood exclusion many policyholders are facing in their Sandy claims, but it is the same general finger-pointing to an excluded cause.

In the end, the appellate court ordered the carrier to pay the costs of the appeal, and affirmed the trial court ruling. The issue at the heart of the trial: the amount of damages that were directly caused by the windstorm, is common. The parties’ experts have differing opinions, and this difference of opinion is an issue of fact that must be resolved by a trial. It seems simple enough, and many Sandy victims will face a similar issue in negotiations and litigation.

1 Mawardi v. New York Prop. Ins. Underwriting Association, 585 N.Y.S.2d 215 (N.Y.A.D. 2 Dept. 1992).