The clause you describe is not included in any insurer’s contract. There is a clause known as concurrent causation that has been used at times by certain companies to try to deny a claim involving wind then water. The company in question in this claim offered a settlement for the portion of the claim deemed to be caused by wind, they did not deny the claim. I would agree that the use of a concurrent causation clause to get out of paying an entire wind then water claim is dubious, but that was not the case here. Again, please stop spewing misinformed venom.
The flood/wind argument should be handled like the old red line releases used in Jones Act and like UM coverage. First the insured should be required to sign if flood or earthquake is not chosen. Then when the policy is issued, a cover page in BOLD RED print stating neither flood nor earthquake is covered.
Perhaps someone needs to read the courts’ decision:
“Justice Michael K. Randolph wrote for the unanimous court:
“We conclude that the ACC clause has no application for losses caused by wind peril. An insurer may not abrogate its duty to indemnify for such loss by the occurrence of a subsequent, excluded cause or event.”
Once the wind loss occurred, the homeowners were entitled to coverage under the policy, the Mississippi court said.
“No reasonable person can seriously dispute that if a loss occurs, caused by either a covered peril (wind) or an excluded peril (water), that particular loss is not changed by any subsequent cause or event. Nor can the loss be excluded after it has been suffered, as the right to be indemnified for a loss caused by a covered peril attaches at that point in time when the insured suffers deprivation of, physical damage to, or destruction of the property insured. An insurer cannot avoid its obligation to indemnify the insured based upon an event which occurs subsequent to the covered loss. The insured’s right to be indemnified for a covered loss vests at time of loss,” the opinion states.
The Mississippi Supreme Court opinion is significant because it preempts federal rulings since insurance contracts are governed by state, not federal, law.
The state court said that the federal circuit court did not err in ruling that storm surge is included in the water damage exclusion but did err in holding that the ACC clause is applicable.”
I don’t think it coulde be any clearer.
And the fact that this clause is no longer even allowed also perhaps has some significance.
Remember, it is not moral or legal to build booby traps into a homeowners policy. No homeowner (and most agents) didn’t know that clause was in there until the cos. started trying to use it to avoid paying for windstorm damage that had occurred before the storm surge damage.
You are reading to find what you want in the article, not what is actually there. The opinion does not state that the company, in fact, misapplied the anti-concurrent causation clause. It simply states that a company may not apply an ACC clause to deny the entirety of a wind then water claim. The ruling was reversing the opinion of a lower court that actually had not been used by the insurance company in the first place as the insurer paid for the wind loss. And last, ACC clauses are still allowed, the court just clarified the application of the clause. Any insurance agent worth anything would know what an ACC clause is…
Maybe in this specific case the carrier paid some wind damage up front, but I can assure you that some prominent carriers tried to stand on concurrent causation as a means to DENY THE CLAIM IN ITS ENTIRITY. Even those that made wind offers up front many times undervalued the wind damage as apparently was the case in this matter.
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Temblor very well knows the facts. The inclusion of a clause that says wind damage won’t be covered if there is subsequent flood damage is DESPICABLE!
Read the decision. 9 – 1 the Court said the clause can not be used!
The clause you describe is not included in any insurer’s contract. There is a clause known as concurrent causation that has been used at times by certain companies to try to deny a claim involving wind then water. The company in question in this claim offered a settlement for the portion of the claim deemed to be caused by wind, they did not deny the claim. I would agree that the use of a concurrent causation clause to get out of paying an entire wind then water claim is dubious, but that was not the case here. Again, please stop spewing misinformed venom.
The flood/wind argument should be handled like the old red line releases used in Jones Act and like UM coverage. First the insured should be required to sign if flood or earthquake is not chosen. Then when the policy is issued, a cover page in BOLD RED print stating neither flood nor earthquake is covered.
Perhaps someone needs to read the courts’ decision:
“Justice Michael K. Randolph wrote for the unanimous court:
“We conclude that the ACC clause has no application for losses caused by wind peril. An insurer may not abrogate its duty to indemnify for such loss by the occurrence of a subsequent, excluded cause or event.”
Once the wind loss occurred, the homeowners were entitled to coverage under the policy, the Mississippi court said.
“No reasonable person can seriously dispute that if a loss occurs, caused by either a covered peril (wind) or an excluded peril (water), that particular loss is not changed by any subsequent cause or event. Nor can the loss be excluded after it has been suffered, as the right to be indemnified for a loss caused by a covered peril attaches at that point in time when the insured suffers deprivation of, physical damage to, or destruction of the property insured. An insurer cannot avoid its obligation to indemnify the insured based upon an event which occurs subsequent to the covered loss. The insured’s right to be indemnified for a covered loss vests at time of loss,” the opinion states.
The Mississippi Supreme Court opinion is significant because it preempts federal rulings since insurance contracts are governed by state, not federal, law.
The state court said that the federal circuit court did not err in ruling that storm surge is included in the water damage exclusion but did err in holding that the ACC clause is applicable.”
I don’t think it coulde be any clearer.
And the fact that this clause is no longer even allowed also perhaps has some significance.
Remember, it is not moral or legal to build booby traps into a homeowners policy. No homeowner (and most agents) didn’t know that clause was in there until the cos. started trying to use it to avoid paying for windstorm damage that had occurred before the storm surge damage.
You are reading to find what you want in the article, not what is actually there. The opinion does not state that the company, in fact, misapplied the anti-concurrent causation clause. It simply states that a company may not apply an ACC clause to deny the entirety of a wind then water claim. The ruling was reversing the opinion of a lower court that actually had not been used by the insurance company in the first place as the insurer paid for the wind loss. And last, ACC clauses are still allowed, the court just clarified the application of the clause. Any insurance agent worth anything would know what an ACC clause is…
IR:
Maybe in this specific case the carrier paid some wind damage up front, but I can assure you that some prominent carriers tried to stand on concurrent causation as a means to DENY THE CLAIM IN ITS ENTIRITY. Even those that made wind offers up front many times undervalued the wind damage as apparently was the case in this matter.