Significant changes appear to be in the pipeline for Florida property insurers after the Florida legislature passed sweeping assignment of benefits (AOB) reform legislation last week. If the legislation is signed into law (Governor DeSantis has indicated it will be), it will take effect on July 1, 2019. The legislation applies to residential and commercial property insurance policies and includes new restrictions on AOBs, changes to the fee-shifting framework for AOB ... Keep Reading »
Property
Break Out Your Crystal Ball: New York’s First Department Relies on Policy’s Mitigation Provision as Support for Allegation That Consequential Damages Were Foreseeable
An insured sought coverage under its commercial property insurance policy for property damage incurred after construction work was performed in an adjoining building. Contending the insurer’s “investigatory process has taken so long and become so attenuated that the structural damage to the building has worsened,” the insured brought suit for breach of contract for failure to pay a covered loss under its insurance policy and breach of the implied covenant of good faith ... Keep Reading »
Court Enforces Policy’s Crumbling Foundation Plain Language in Dismissing Claims Against Insurers
A federal judge in Connecticut recently dismissed claims against insurers related to their denial of a claim by two homeowners whose home’s foundation was crumbling. The case, Hyde v. Allstate Ins. Co., No. 3:18-cv-00031 (D. Conn. Dec. 4, 2018), marks the latest development in what is quickly becoming a major source of litigation. When the Hydes tried to sell their house in 2016, they discovered that the home’s foundation was crumbling. Their foundation had allegedly ... Keep Reading »
Clearing the Air: Tenth Circuit Strikes Down an Indoor Air Quality Exclusion, Citing Ambiguity
Ambiguity strikes again. While the heavily litigated pollution exclusion is well-known in the insurance world, its progeny—the indoor air exclusion—only recently has started making its way around the block. Insurers should be aware of the trend in cases holding that indoor air quality exclusions are ambiguous. Such holdings are resulting in courts applying a strict and narrow construction. For example, in Siloam Springs Hotel v. Century Sur. Co., No. 17-6208 (10th Cir. ... Keep Reading »
Sixth Circuit Weighs in on Coverage for Marijuana-related Property Loss
The Sixth Circuit Court of Appeals issued a colorful opinion in a property insurance coverage dispute affirming a denial of coverage for loss arising out of an illicit marijuana growing operation in Michigan. The case is captioned K.V.G. Properties Inc. v. Westfield Ins. Co., No. 17-2421 (6th Cir. Aug. 21, 2018). The insured was the lessor of commercial properties, including a property leased to certain tenants who, unbeknownst to the lessor, built a large-scale ... Keep Reading »
Florida Court Enforces Condition on Post-Loss Assignment of Benefits, Creating Conflict Between District Courts of Appeal
As we have reported, an assignment of benefits (AOB) is a legal tool that allows a third party, like a contractor, to be paid for services performed, like repairs following an insured loss, for an insured property owner who would normally be reimbursed by the insurance company directly after making a claim. Most AOBs allow the contractor to stand in the shoes of the property owner for insurance collection purposes. Such post-loss assignments are enforceable in most ... Keep Reading »
Common Sense Prevails Over Dictionary Definitions: Rolling Trash Bins Are Not ‘Vehicles’ Judge Explains
A federal judge recently refused an insured’s attempt to escape a policy exclusion by contending that a large “storage bin” on wheels was a “vehicle” under an exception to the exclusion, which prohibited coverage for costs associated with gas system tests. In 1070 Park Ave. Corp. v. Fireman’s Fund Ins. Co., No. 17 CIV. 2474 (CM) (S.D.N.Y. June 19, 2018), appeal docketed No. 18-1961 (2d Cir. June 29, 2018), the judge ruled that the storage bin was not a “vehicle” as that ... Keep Reading »
An Expert Is Only as Good as His Actual Experience
Experts are often used to address issues of causation and scope of damages in insurance coverage matters. It is well established, however, that an expert must be qualified through specific training or actual experience. Without such training or experience, a purported expert’s affidavit may not be sufficient to create an issue of material fact sufficient to defeat summary judgment. Such was the lesson in Superhost v Selective Ins (NY App 2018-04-12), Case No. 525034 (NY ... Keep Reading »
Look Beneath the Surface: No Coverage for DC Row House Collapse Under Builder’s Risk Policy
The interpretation of a property insurance policy may seem like a dull endeavor, but courts sometimes face fundamental questions about what words mean, or how we conceptualize cause and effect. In Taja Investments LLC v. Peerless Ins. Co., No. 16-1854 (4th Cir. Oct. 11, 2017), the Fourth Circuit Court of Appeals confronted both issues to determine that two exclusions in a builder’s risk policy applied to bar coverage for the collapse of a row house under renovation in ... Keep Reading »
Florida Court Rejects Property Insurer’s Effort to Limit Assignment of Benefits
An assignment of benefits (AOB) is a legal tool that allows a third party to be paid for services performed for an insured property owner who would normally be reimbursed by the insurance company directly after making a claim. An AOB is commonly used when a property owner experiences a loss and contacts a contractor for assistance. Most AOB agreements allow the contractor to stand in the shoes of the property owner for insurance collection purposes. These agreements are ... Keep Reading »
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