A case before the Mississippi Supreme Court asks whether the anti-concurrent causation clause in homeowners policies is ambiguous. See Corban v. United Services Automobile Association, No. 2008-M-645 (Miss.). The appeal criticizes and asks the Mississippi court to depart from holdings in the trio of Hurricane Katrina cases decided by the Fifth Circuit: Leonard v. Nationwide Mut. Ins. Co., 499 F.3d 419 (5th Cir. 2007); Tuepker v. State Farm Fire & Cas. Co., 507 F.3d 346 (5th Cir. 2007)(reviewed here); and Broussard v. State Farm Fire & Cas. Co., 523 F.3d 618 (5th Cir. 2008)(reviewed here). An Amicus Brief was recently filed by the United Policyholders in support of the Petitioner policyholders. The Amicus Brief appears to misunderstand the criteria for implementing the anti-concurrent causation clause.
Initially, the Amicus Brief summarizes the history of the all risk policy. The industry offered this policy to cover all risks except for those specifically excluded. United Policyholders criticizes Broussard for suggesting that in a personal property claim, the policyholder must separate wind from water damage. The passage under attack from Broussard reads, "Likewise, a stipulation that the [policyholders'] personal property was destroyed by Hurricane Katrina is insufficient to establish that it was destroyed by a windstorm, since Hurricane Katrine unleashed both wind and water forces." Id., 523 F.3d 618. Amicus contends this statement places an onerous burden on the policyholder that was never intended by the all risk policy. Instead, the burden to prove a specific exclusion applies under an all risk policy should be on the insurer. So far, I agree with Amicus that the burden of demonstrating an exclusion applies to bar coverage is on the insurer.
I disagree, however, with portions of the brief's analysis of the anti-concurrent causation clause. Although the Amicus Brief never quotes the anti-concurrent causation clause at issue, such a clause typically provides, " We do not cover loss to any property resulting directly or indirectly from any of the following. Such a loss is excluded even if another peril or event contributed concurrently or in any sequence to cause the loss." (emphasis added). The policy then lists excluded perils, such as flood.
The Amicus Brief argues Leonard "wrongly found that damage caused by a covered peril will not be paid by the insurer if a subsequent excluded event followed damaging the property again." (emphasis added). If the excluded event was subsequent, it was not concurrent. Therefore, the anti-concurrent causation clause would come into play only if the excluded event was in sequence with the covered risk.
Amicus further submits, "If [the anti-concurrent causation clause is] unambiguous, rather than determining that covered wind and rain damage is placed into the 'excluded' category because some type of 'flood' event may have followed the wind and rain damage, this Court should . . . find that wind and water damage are separate and only the 'flood' damage is subject to the exclusion." (emphasis added). Analyzing this statement, we first note rain damage caused by the rain entering an opening due to wind would be covered under a typical homeowner's policy despite the anti-concurrent causation clause. Further, if the flood "follows the wind and rain damage," the anti-concurrent causation clause would not be implicated because the flood and wind would not be concurrent. Finally, if the wind and water damage are separate and not concurrent, again the anti-concurrent causation clause would not apply. Damage caused by wind would be covered, while flood damage would not be covered under the all risk policy, just as requested by Amicus.
