Anti-Concurrent Causation Clause Eliminates Loss from Hurricane

Tred R. Eyerly | Insurance Law Hawaii

    The court found the insured was not covered for losses caused by Hurricane Laura due to the implementation of the policy’s anti-concurrent causation clause. Aegis Sec. Ins. Co. v. Lejeune, 2021 U.S. Dist. LEXIS 106804 (W. D. La. June 7, 2021). 

    At the time of the hurricane, the insureds’ home was covered by a manufactured home insurance policy issued by Aegis. The policy excluded coverage for damage “caused by, contributed to or aggravated by” flooding. The policy’s anti-concurrent causation clause read, “We do not pay for loss to the types of property covered under this policy caused by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.” The policy’s exceptions followed. 

    After the storm, the insureds submitted their claim. Aegis filed suit for declaratory judgment. Aegis relied upon reports that the manufactured home and barn owned by the insureds were damaged by winds, then displaced and destroyed by storm surge associated with the hurricane. The home first sustained damage from the storm’s high winds before it was displaced from its concrete piers by a 12 to 16 foot storm surge. 

    The court noted that the Fifth Circuit had held that an anti-concurrent causation clause like the one in this policy was not ambiguous and may properly exclude coverage for damages caused by a combination of an excluded peril and a non-excluded peril. Such provisions were not precluded by Louisiana statutory law, case law, or public policy. 

    The insureds asked the court to take judicial notice of the storm’s high winds and argued that their home was totaled and rendered uninhabitable by wind long before the storm surge arrived. Aegis, however, met its burden of showing that an exclusion applied. The insureds’ argument was insufficient to create a genuine issue of material fact on the applicability of the exclusion or their own ability to show that the damages were segregable.

    Accordingly, Aegis was entitled to a declaratory judgment. 

Leave a Reply