Texas has a lot of insurance claims decided by appraisal. Maybe the appraiser for one insured should have gone to Steve Patrick’s appraisal class because the umpire and insurer’s appraiser came to a zero award, which was upheld on appeal.
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The Iowa Supreme Court determined that “appraisers may determine the factual cause of damage to insured property to ascertain the amount of loss,” in Walnut Creek Townhome Association vs Depositors Insurance Company.1 I am proud that Ashley Smith (nka Ashley Harris) was cited by the court for her analysis of the issue.
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Plaintiffs owned a home in Arizona insured by Metropolitan Property and Casualty Insurance Company.1 The “Wallow Fire” occurred near the property and consumed the plaintiffs’ detached garage. It also burned the vegetation on a nearby hill. A month after the fire was contained, a mudslide on the hill destroyed the house.
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Earlier this month, a federal judge sitting in the Southern District of Indiana examined the scope of the appraisal clause in the property insurance policy. Relying on many of the same cases I have discussed in earlier blogs in this series, the court found that the appraisal panel must consider causation as part of the appraisal process:
While the appraisal procedure is commonly used in property insurance claims, the proper scope of appraisal is often contested. Courts across the country generally agree that coverage determinations are reserved only to the courts. However, courts are divided on whether determinations of causation should be considered by the appraisal process.
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"There’s a great deal of suffering in the world, Sir. We ought to do our part toward relieving it."1
New Jersey policyholders who have not been fully paid their insurance benefits following losses from Hurricane Sandy should have some optimism and hope this Christmas Eve. Their reasonable expectations of insurance coverage and benefits are solidly backed by New Jersey insurance law. Insurance company claims departments are required to fulfill their promise of relieving a great deal of suffering caused by Hurricane Sandy by fully and promptly paying insurance benefits purchased before Hurricane Sandy struck.
Every policyholder’s first question after a loss is: does my insurance policy cover this? Some policyholders have a named peril policy insuring against certain risks that are enumerated within the policy itself. Others have an all-risk policy that insures against every peril that is not specifically excluded under the terms of the policy. Regardless of which policy you currently hold, the first step in determining whether coverage exists is determining the cause and origin of the damages.
The law of comparative causation under property insurance policies is reasonably settled in Texas. If there is a loss as a result of two concurring perils, one insured and one not, the loss is covered only to the extent it can be traced to the covered peril. However, what happens when a peril which is not covered is caused by a peril which is covered? As the Plaintiffs learned in National Fire Ins. Co. of Pittsburgh, PA v. Valero Energy Corp., 777 S.W.2d 501 (Tex.App.—Corpus Christi 1989, writ denied), there is still no coverage unless the terms of the policy allow coverage where an otherwise excluded peril is itself caused by a covered peril.
While writing last week’s post, Texas Windstorm Insurer Settles 2,400 Hurricane Ike Slab Claims, I almost quoted Texas attorney Steve Mostyn, who explained that Texas law really left no other rational choice. Burdens of proof are crucial when it comes to close cases, and Texas places a unique and difficult coverage burden on policyholders. An article in the Houston Chronicle titled Windstorm Insurer to Settle Some Ike Cases quoted Mostyn:
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: