“Earth Movement” Exclusion Precluded Coverage for Single Falling Boulder, Montana Supreme Court Rules

August 18, 2016 | Insurance Coverage

The Montana Supreme Court has ruled that a policy’s “earth movement” exclusion precluded coverage for a claim that a boulder fell down a hill and damaged an insured cabin.

The Case

A large boulder dislodged from a hillside several hundred feet from a vacation cabin near Sheridan, Montana. The boulder fell down the hillside and into the unoccupied structure, causing substantial damage.

The owner submitted a claim to his insurer.  The insurer determined that the claim was excluded by the insurance policy’s earth movement exclusion.

The owner sued the insurer for breach of contract and for damages under Montana’s Unfair Trade Practices Act. He argued that a rock was not earth under the exclusion and although a soil slide was excluded, a single falling boulder was not.

The trial court granted summary judgment in favor of the insurer, and the dispute reached the Montana Supreme Court.

The Montana Supreme Court’s Decision

The court affirmed.

In its decision, the court reasoned that the term “earth” included more than just soil such as that found in a garden. In the court’s view, reasonable people “would recognize that rocks of all sizes ordinarily comprise more or less of the surface of the earth upon which we live.” Therefore, it continued, construing the policy to exclude only damages caused solely by soil movement “would improperly distort the policy language.”

Finding nothing in the exclusion’s language to indicate that there was any basis for separating rock from soil when considering “earth movement,” the court concluded that the “clear intent” of the policy language was to “broadly exclude coverage for any and all types of earth movement.”

The case is Parker v. Safeco Ins. Co. of America, No. DA 15-0528 (Mont. July 19, 2016).

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  • Robert Tugander

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