Anti-concurrent causation clause

Hurricane Florence 9/12/2018

Last week, I had the pleasure of presenting at the Spring Meeting & Seminar of the Professional Public Adjusters Association of New Jersey (“PPAANJ”). One of the more thoroughly discussed topics during my presentation was a recent New Jersey federal court decision involving insurance policy language commonly known as an anti-concurrent/anti-sequential causation clause.1 The clause bars coverage when two identifiable causes-one covered and one not covered-contribute to a single loss.2
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Coverage questions under an “all-risk” insurance policy, in their simplest form, are typically determined by whether the peril is expressly limited or excluded. But what happens when multiple perils, both covered and excluded, combine to cause a loss? From this scenario developed the theory of “concurrent causation.”
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With freezing temperatures and blizzards sweeping a good part of the country, I thought I would blog on a case about a swimming pool, giving us a subtle reminder that winter is temporary and spring is on its way. It also provides guidance on the status of anticoncurrent causation clauses in Illinois insurance policies.

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Peter N. Swisher, a Law Professor at University of Richmond Law School, wrote an article recently published in the Tulane Law Review, with a title containing the question every insurance customer suffering from claim denial asks: "Why Won’t My Homeowners Insurance Cover My Loss?": Reassessing Property Insurance Concurrent Causation Coverage Disputes.1


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Many insurance policies specifically exclude earth movement and if the facts permit, the insurance company may raise this exclusion when a claim is asserted. This issue is currently being litigated in Superstorm Sandy cases in both New York and New Jersey. A recent Eastern District of New York federal court decision discussed the earth movement exclusion in a case involving an auto parts company warehouse in New York which sustained significant damage when a portion of the concrete floor collapsed.1 The auto parts company had stored steel racks with auto parts that weighed about 2 to 3 tons. Therefore, when the loss occurred, the policyholder asserted that the loss was covered under the policy provision which covered damage from a collapse caused by the “weight of people or personal property.”


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I have previously written about several Hurricane Sandy-inspired bills in New York and New Jersey, noting how they appear to have policyholder interests at the forefront of their terms. A little over a month ago, in Legislation Proposed In New Jersey To Eliminate Anti-Concurrent Cause Provisions From Insurance Policies, I wrote about a bill proposed in the New Jersey Legislature (A4467) that would eliminate anti-concurrent cause provisions excluding losses where both covered and non-covered perils occur at the same time. A similar bill was proposed in New York (A07455) to outlaw anti-concurrent policy provisions, as noted in my post, In Sandy’s Aftermath, A New York Congressman Proposes A Bill To Eliminate Anti-Concurrent Cause Provisions From Policies In New York.


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Anti-concurrent cause provisions in insurance policies have been the topic of much discussion since Hurricane Sandy made landfall in the Northeast in the end of October 2012. Anti-concurrent cause provisions are favored by insurance carriers to support denials of coverage for Sandy losses.  Recently, a New Jersey Assemblyman, Patrick Diegnan, proposed a bill (A4467) to eliminate anti-concurrent cause provisions that seek to exclude losses where both covered and non-covered perils occur at the same time.


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Those involved with Sandy claims in New York have likely become familiar with anti-concurrent cause provisions in property insurance policies. These provisions are favored by insurance carriers to support denials of coverage for hurricane losses. Assemblyman Phil Goldfeder recently proposed a bill (A07455) which would outlaw anticoncurrent policy provisions that exclude losses from occurrences where both covered and non-covered perils occur at the same time.


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In my last post, I addressed the basics of concurrent causation here in New Jersey. The question that remains, however, is how New Jersey’s courts will interpret a policy containing a clause that denies coverage for a covered cause of loss when accompanied by an excluded cause of loss. Such anti-concurrent causation clauses are commonplace in contracts of insurance.

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