A couple of recent cases have come down that I think are worthy of mention.
The first is Brown v. Mid-Century Insurance Company (Case No. B238357, filed 4/2/13). In that case the California Court of Appeals ruled that the length of time a pipe leaks determines coverage rather than the circumstances of the pipe failure itself. In this case, the insureds first noticed condensation on the inside of windows and surrounding drywall. They cleaned but it returned within a day. In a week, they noticed mold forming around the windows. A few weeks later, a family member entered the crawl space and observed damp soil. At that point, they hired a plumber who diagnosed a leak in the hot water line under the slab. The plumber opened the slab, found the leak and made the repair.
The insured’s expert argued that even if the corrosion of the pipe had been gradual wear and tear, there was a precise instant when it suffered a sudden breach. The Court disagreed, finding that there was no sudden and accidental discharge, and even if the pipe failed suddenly, the damage was a result of a discharge over a period of time.
The second case is Travelers Property and Casualty Company of America v. Superior Court (2013 West Law, 1638157). In this case Travelers issued a policy of insurance that had been in effect for less than sixty days when vandalism was discovered. The policy provided that no coverage existed where a building was vacant for more than sixty days before a theft and vandalism loss. The insured argued that since the policy had not been in effect for sixty days, the limitation could not be enforced. The Court of Appeals disagreed and applied the limitation retrospectively from the date of loss as the property had been vacant for more than sixty days prior to the loss occurring.