Source: http://slabbed.org/2010/01/21/merlin-endorsement-trumps-exclusion-hurricane-anticoncurrent-causation-case-and-policyholder-wins/
Timestamp: 2019-04-24 00:39:45+00:00

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At last, a ruling on policy endorsements that makes sense – and just as I was struggling (for the umpteenth time) to understand why a hurricane endorsement cost more and bought nothing! h/t Property Insurance Coverage Law Blog!
A Hurricane Ivan claim that involved flood and sewer back up was not excluded because of the anticoncurrent causation clause in Bishops, Inc. v. Penn National Ins., Case Nos. 2275 WDA 2007, 35 WDA 2008 (Pa. Super. Nov. 24, 2009). The important aspect of this case is how an endorsement purchased to cover sewer back up rendered the anticoncurrent cause clause ineffective for sewer back up as well as income and extra expense coverage. (emphasis SLABBED) Some decisions are quite easy to analyze, while others make you read portions of a court’s reasoning two or three times. This case is the latter. My tip for policyholders from this case is to always review your endorsements to see if additional coverage is provided.
(1) Flood, surface water, waves, tides, tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not.
We will pay for loss or damage to Covered Property caused by a back up from a sewer or drain or an overflow from a sump within the building at the described premises.
The most we will pay for each location under this Additional Coverage is $ 5,000 for the sum of all expenses arising from back up or overflow during each 12 month period of the policy.
…Based on this language, the insured might reasonably conclude that the coverage he purchased eliminates both the specified limitation in subsection g.(3), concerning sewer and drain back-up, as well as the preliminary language in section B.1., concerning concurrent causation. Nevertheless, the insurer might concur only as to subsection g.(3) and, as Penn National did here, deny coverage on the basis of the concurrent cause language.
Unlike the courts of other jurisdictions on whose holdings Penn National relies, we have found the Endorsement and Exclusion provisions ambiguous to the extent that they fail to provide a clear indication of the continuing role of the concurrent causation language of Exclusion section B.1. after the insured’s purchase of the extra cost Endorsement. Indeed, our construction, based on the express language of the Penn Pac Endorsement, finds little basis for the continued viability of the concurrent cause exclusion to sewer and drain back-up under the policy. By contrast, in each of the cases Penn National cites, Brief for Appellant at 22-33, the respective courts upheld concurrent cause provisions. See Leonard v. Nationwide Mut. Ins. Co., 499 F.3d 419 (5th Cir. 2007); Noran Neurological Clinic, P.A. v. Travelers Indem. Co., 229 F.3d 707 (8th Cir. 2000); Front Row Theatre, Inc. v. American Mfrs. Mut. Ins. Co., 18 F.3d 1343 (6th Cir. 1994); [**29] Assurance Co. of Am., Inc. v. Jay-Mar, Inc., 38 F.Supp.2d 349 (D. N.J. 1999); Executive Corners Office Building v. Maryland Ins. Co., 1999 U.S. Dist. LEXIS 23444 (D. N.D. 1999); B&W Heat Treating Co. v. Hartford Fire Ins. Co., 23 A.D.3d 1102, 803 N.Y.S.2d 870, 2005 N.Y. App. Div. LEXIS 12729 (App. Div. 2005). Nevertheless, to the extent these decisions apply different language in differently structured policies, every one is distinguishable.
This case is useful for policyholders seeking coverage when they have purchased additional coverage through endorsements but the insurer is trying to apply basic form exclusions.
The law recognizes “reasonable expectations” but our Courts have totally ignored that aspect of insurance law.
While I recognize there is still an on-going media campaign to convince the public that policyholders here were folks claiming coverage they didn’t purchase, the Court should always be above such influence but never above the law.

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