Opinion ID: 1802432
Heading Depth: 4
Heading Rank: 4

Heading: Whether Coverage B causes the Catastrophe Policy to drop down, by contemplating primary protection in certain circumstances.

Text: ¶ 34. Caldwell argues, without citation of any authority for the proposition, that the Catastrophe Policy is more like an umbrella policy, which can certainly `drop down' because it contemplates excess protection in Coverage A and primary protection in Coverage B. We find this argument unpersuasive for two reasons. ¶ 35. First, Coverage B of the Catastrophe Policy applies when underlying insurance does not apply, that is, where there is no other insurance in any way applicable. Further, according to the policy, the retained limit means the greater of: a. The amount stated in the Declarations as Retained Limit; or b. The amount payable as damages under any other valid and collectible insurance purchased specifically in excess of this insurance. Thus, the provisions of Coverage B are clear and unambiguous. We find that Coverage B provides that where neither the terms and conditions of the Catastrophe Policy or any other policy apply, then Coverage B of the Catastrophe Policy may apply. There is no dispute that Legion was the primary insurer and its policy covered the instant loss. Therefore, Coverage B is neither applicable nor does it require LMCC to drop down and provide primary coverage due to Legion's insolvency. Thus, whether the Catastrophe Policy is characterized as an excess policy or an umbrella policy, its interpretation is controlled by contract law, and the result remains the same. ¶ 36. Second, as noted previously, the policies in Newton and Century were both umbrella policies, and in each case, North Carolina law provided that the policies did not drop down. Therefore, for both of these reasons, this argument has no merit.