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.
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.
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.
Continue Reading Anti-Concurrent Causation Clauses in New Jersey
I have reviewed denial letters sent to policyholders in New York and New Jersey. Their business income claims have been denied because the “physical loss or damage” was caused, in whole or in part, by an excluded peril – power failure. Hurricane Sandy was a complex windstorm event that caused many perils – power outages, fire, flood, explosion and wind are among the most prevalent. Some of these perils may or may not be covered by an insurance policy, but if an insured property sustained damages caused by at least one covered peril, business income claims should not be denied.
Adjusters and public adjusters should be careful not to practice law. Chip Merlin is going to write in general about New Jersey insurance law as it applies to Hurricane Sandy insurance claims. . . .…
Continue Reading Hurricane Sandy Insurance Claim Denials in New Jersey
Relying on anti-concurrent causation clauses, several insurers have adopted a method of claims adjusting where business income claims are denied in whole if the property suffered damage attributed in part to an excluded cause of loss. In most states, this type of business practice is wrong and contrary to public policy. For an in depth analysis on the legal framework of anti-concurrent clauses, I encourage you to read Chip’s post, Anticoncurrent Causation Clause Explained in Relation to Hurricane Losses.
My past few hurricane blog posts have been discussions of the issues raised in the recent Florida state court case of Citizens Property Ins. Corp. v. Ashe, No. 1D09-1546, 2010 WL 4628915 (Fla. 1st DCA Nov. 17, 2010). To refresh your recollection, Ashe was a case in which a homeowner’s property was damaged by a hurricane, the homeowner was paid policy limits by his flood insurer, and a dispute arose as to entitlement to benefits under his wind policy. Another case in that same vein was recently before a Mississippi federal court in Penthouse Owners Assoc., Inc. v. Certain Underwriters at Lloyd’s, London, No. 1:07CV568-HSO-RHW, 2011 WL 96514 (S.D. Miss. Jan. 11, 2011).
Earlier this week, Chip Merlin posted Does an Insurance Policy Cover only “Loss” or “Damage” to Property? regarding the different interpretations of the proverbial “loss” or “damage” provision in property insurance policies, specifically as applied in anticoncurrent causation analyses.
Continue Reading The “Loss” or “Damage” Coverage Requirements – A Business Interruption Afterword – Understanding Business Interruption Claims, Part 31
Property insurance policies are written in complex language. The fact that there are so many different interpretations and disputes about the language by some very bright people is probably enough evidence to prove that point. David Rossmiller wrote a post, Corban v. USAA: A few (more) words about anti-concurrent causation, which had me thinking about words used in an insurance policy and what a policy covers. He stated:
Mississippi Representative Gene Taylor successfully placed language into House Bill H.R. 1264—“the Multiple Peril Insurance Act”— which would require “Write Your Own” insurers participating in the National Flood Program to remove anti-concurrent causation language from their all risk insurance policies. Taylor’s house was destroyed in Hurricane Katrina. Many of his neighbors’ insurance claims were denied based on the continuing wind versus flood insurance coverage controversy which I noted recently in Texas Windstorm Insurer Settles 2,400 Hurricane Ike Slab Claims.
Continue Reading Will Flood Insurance Insurers Lose AntiConcurrent Cause Language?