I was wandering around cyberspace when I found this interesting bit of information here; so, come wander with me and see where we end up.
The Dallas, San Antonio and Austin Courts of Appeals have adopted the “manifestation rule” in holding that property damage occurs at the time the damage manifests, which they further define as when the damage becomes apparent or identifiable.
In contrast, the Houston Courts of Appeals have rejected the manifestation rule in favor of the “exposure rule” for injuries “caused by continuous or repeated exposure to conditions during a policy period.”
These two opposing views are squarely presented to the Texas Supreme Court for determination in the Don’s Building Supply and Pine Oak Builders cases and their outcome will significantly impact coverage in property damage cases.
Well, that reminded me of a neighbor whose house took a four-tree whack from Katrina with seemingly little damage. Two years later, the back wall had to be taken off one of the bedrooms because one of those whacks did something that let water seep between the interior and exterior wall when it rained – a fact my neighbor stumbled into (literally) one day when she tripped, fell backward and a butt-shaped hole manifested in her very soft bedroom wall as a result.
Naturally, that reminded me of Katrina’s wind and water and the anti-concurrent cause clause. With that on my mind, I wandered over to Rossmiller’s place where I found his analysis of a most interesting case – a summary judgment opinion of the federal district court for the Northern District of Florida, in Empire Indemnity Ins. Co. v. Winsett.
Florida uses a causation analysis in first-party property claims that is unusually precise and defined among the states, and also different from other states. First, courts look at whether causes are independent — such as earthquake and a lightning strike, or windstorm and wood rot — or dependent, such as when an earthquake breaks a gas main that starts a fire…
The way the court analyzed this, the anti-concurrent cause language would apply only to truly concurrent causes — those that are of independent origin…
One glaring omission in the court’s analysis — what of the words “or in any sequence” in the anti-concurrent cause provision. As those who have read my examinations of anti-concurrent cause language know, sequential damage is precisely what the court is talking about here: dependent causes that result in damage…
Applying his broad meaning of or In any sequence means everything that’s happened since Eve took a bite of the apple is excluded – an idea that doesn’t seem all that far fetched if you read the comment from cominglatersooner that I found when I wandered by the ALL board.
Current Issue in Economics and Finance – August 1996 – Securitizing Property Catastrophe Risk: The trading of property catastrophe risk using standard financial instruments such as options and bonds enables insurance companies to hedge their exposure by transferring risk to investors, who take positions on the occurrence and cost of catastrophes.
Securitized “Hurricane Cat Bonds” – If the hurricane storm surge is not a “covered risk” and the insurance company decides to “exclude the covered risk of wind”; what covered insurance risk has been transferred? None. Are the securitized Cat bonds now worthless paper?
If an insurance company doesn’t underwrite the risk of an earthquake, how can the risk of an earthquake be transferred to private investors by insurance linked securitization? How does the ACC clause effect securitization?
I can’t answer your questions with certainty, CLS, but you must think someone can or you wouldn’t have ended your comment with the question – Does anyone think that there may have been more whistleblowers besides the Rigby sisters and Branch Consultants?