I’ve said it before, and I will say it again. My favorite policy exclusions carriers cite to deny property damage claims are wear, tear, and deterioration, improper workmanship, and construction defect. Do you know whether your state is a concurrent causation state? This could mean the difference between coverage and no coverage for a loss.
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In December of 2016, I wrote about Sebo v. American Home Assurance Company,1 where the Florida Supreme Court reversed the appellate court’s adoption of the “Proximate Efficient Cause” doctrine and found that instead, the lower court should have applied the “Concurrent Causation Doctrine,” as laid out in Wallach v. Rosenberg,2 in a situation where both the excluded cause of faulty construction, combined with the covered causes of rain and wind resulted in a total loss to Sebo’s property.
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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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On December 1, 2016, the Florida Supreme Court decided Sebo v. American Home Assurance Company, Inc.,1 resolving whether coverage existed under an all-risk policy when there were multiple causes of loss and at least one of the causes was excluded, in favor of the insured.
After Superstorm Sandy, Shaun Marker published a series of articles about damages that were caused to properties by boats on land. In the series, So I Have A Boat In My Front Yard Following Super Storm Sandy; Will My Flood Insurer Cover The Removal Of It And Other Non-Owned Debris?, Marker discussed how boats that washed ashore would be covered under standard flood and excess flood policies. But boats weren’t the only thing washing up on land, debris from Superstorm Sandy included parts of structures, docks, plants and sand galore, and coverage for boats and debris were also addressed in his series.
When multiple events cause damage, is there coverage? If language in the policy addresses concurrent causes of loss, then that language usually answers the question. If the policy is ambiguous, then look to case law. This was recently discussed in Salem United Methodist Church of Cedar Rapids, Iowa v. Church Mutual Insurance Company.1
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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.
A recent opinion was issued from a Florida appellate court involving a property insurance claim that stemmed from multiple losses. The Second District Appeals Court of Florida noted in the opinion that the multiple-peril loss issue has not often arisen in Florida case law history regarding first-party property insurance claims. The case is American Home Assurance Company v. Sebo.1 The facts of the case are as follows:
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.
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