New York Insurance Coverage Law Update

“Residence Premises” Raises Question Of Fact Under Circumstances

Insureds purchased a home and began renovating it before moving in. The home was destroyed by fire and the insurer disclaimed coverage because the home was unoccupied and did not quality as a “residence premises.” New York’s highest court, the Court of Appeals, ruled that there was an issue of fact as to whether one of the insured’s “daily” presence in the house to make renovations, and his intent to eventually move in with his family, was sufficient to satisfy the policy’s “residence premises” requirements. As such, the Court concluded that the insurer should not have been awarded summary judgment. [Dean v. Tower Ins. Co. of N.Y., 2012 N.Y. Slip Op. 07142 (N.Y. Oct. 25, 2012).]

Pier Damaged By Wear And Tear, Not Wind, Dooming Coverage Claim

After an insurer disclaimed coverage for a collapsed pier and damaged crane, the insured/owner sued. The court found that although the insured had theorized that a windstorm caused the crane to move and shift, thereby undermining the structural integrity of the pier and resulting in its collapse, the evidence demonstrated that the pier had been structurally compromised by years of wear and tear and that it had exhibited extreme levels of deterioration prior to the accident. The court concluded that because wear and tear, deterioration, and collapse were explicitly excluded from coverage, the insured’s evidence did not establish coverage under the policy. [United States Dredging Corp. v. Lexington Ins. Co., 2012 N.Y. Slip Op. 06597 (App. Div. 2d Dep’t Oct. 3, 2012).

“Earth Movement” Exclusion Bars Coverage For Loss from “Landslide” and “Mudflow”

The insured claimed that her property sustained extensive damage when, during a rain storm, a mudslide caused a retaining wall on her property to collapse. The court ruled that there was no coverage because of the “plain language” of the policy excluded coverage for losses due to “[e]arth movement of any type, including, but not limited to … landslide [and] mudflow.” [Wilner v. Allstate Ins. Co., 2012 N.Y. Slip Op. 06599 (App. Div. 2d Dep’t Oct. 3, 2012).]

Spouse Had No Insurable Interest In Property 50% Owned By Her Husband

After a fire damaged a dwelling purchased by Raymond Azzato and a nonparty as tenants-in-common, Azzato’s wife, a coinsured with him under a landlord’s package insurance policy, filed a claim. The court ruled that she had no insurable interest in the property, pointing out that her name did not appear on the deed or the supplemental fire claim form and that she had not alleged that she earned any income from the property, resided in it, or had any legal or equitable right to do so. The court rejected her contention that she had an insurable interest because she contributed to the purchase of her husband’s share of the property, helped to maintain it after it was purchased, and furnished portions of it with her own property. [Azzato v. Allstate Ins. Co., 2012 N.Y. Slip Op. 06571 (App. Div. 2d Dep’t Oct. 3, 2012).]

No-Fault Insurer Precluded From Disclaiming on Independent Contractor Defense Because Not Timely Raised

A medical provider, as assignee under a no-fault insurance policy, submitted a bill to the insurer that stated that services had been rendered by an independent contractor. The Appellate Division, Second Department, concluded as a matter of first impression that New York’s insurance regulations preclude a medical provider from billing for and receiving first-party no-fault benefits where it identified the treating provider as an independent contractor. However, the court also ruled that the insurer in this case was precluded from relying upon this defense because it was not timely asserted as required by the No-Fault Law. According to the court, the insurer’s reason for denying the claim “should have been apparent to it from the face of the claim form.” [A.M. Med. Servs., P.C. v. Progressive Cas. Ins. Co., 2012 N.Y. Slip Op. 06902 (App. Div. 2d Dep’t Oct. 17, 2012).]