Last week, I had the pleasure of presenting at the spring meeting and seminar for the Professional Public Adjusters Association of New Jersey ("PPAANJ"). One of the more carefully discussed topics during my presentation was a newly-decided New Jersey court ruling that involved insurance languages that were generally felt as an anti-simultaneous / anti-sequential causal clause. 1 The clause covers when two identifiable causes covered and one does not cover-contribute to a single loss. 2
In that case, after Superstorm Sandy, an insured left a claim for long-term damage to the insurer of the company. The insurer inspected the property and decided that high winds caused and contributed to damage to certain parts of the property. The insured then employed his own inspector to assess the damage and prepare an estimate of the cost of repairs. The insured's inspector identified the same parts of the property as wind damaged as the insurer's inspector (though with more extensive and costly repairs). The insured also hired a cause specialist who concluded that the first wind, when the flood, caused further damage to the insured's underground pool, boardwalk and electric transformer.
The insurer attempted to reject the insured's claim for damages to the pool, boardwalk and electric transformer claiming that the conflicting / contradictory causal clause in the insurance policy prevents any recovery for damages arising from both wind (a covered danger) and flood (an excluded hazard).
court with the agreement with the insurer and noted that federal and state courts in New Jersey have applied and enforced similar conflicting / contradictory causal provisions "to exclude any cover for loss caused by a flood, even if a flood acts simultaneously or sequentially with a covered danger ". The policy's anti-simultaneous / anti-seizure clause prevented the recovery of the base pool, the boardwalk and the electrical transformer because the insured's own experts did not find that the first wind, and then the flood, caused damage to these objects.
In this case, it is emphasized that, depending on your jurisdiction, an opposite / counter-sequential causal clause within an insurance policy can be applied even if a covered danger causes damage before an excluded danger.
1 Zero Barnegat Bay, LLC vs. Lexington Ins. Co. 2019 WL 1242436 (D.N.J. March 18, 2019).
2 By way of example, "We do not assure loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any consequence to the loss."