Ice dam claims are deceptively easy and routinely mishandled. Snow builds up, warmth differentials trigger melting and refreezing, water intrudes the place it mustn’t, and harm seems shortly thereafter. But insurers usually attempt to flip these easy details into complicated engineering disputes or, worse, into exclusion scavenger hunts. A Utah federal court docket determination involving Vacationers is a textbook instance of why that method fails. 1
The case arose from harm to elevated decks brought on by ice damming. The policyholder noticed ice dams forming, seen cracking and harm inside weeks, and confirmed the decks had been in good situation beforehand. Vacationers denied the declare. First, it stated the broken buildings have been “patios” and due to this fact excluded. Then, after greater than a 12 months and with out conducting a significant reinspection, it deserted that rationalization and shifted to put on and tear, deterioration, seepage, settling, enlargement, and latent defect exclusions. By the point the case reached abstract judgment, Vacationers was asserting a laundry listing of exclusions with out clearly committing to any single reason behind loss.
That technique backfired.
Ice dam circumstances are usually not unique. They’re timing-driven. What existed earlier than winter issues. What occurred throughout freezing circumstances issues. What modified shortly thereafter issues. These details usually come not from engineers, however from the individuals who dwell within the buildings. Courts perceive this.
On this case, the insurer tried to discredit the policyholder’s testimony by arguing that he was not an professional and couldn’t opine on causation. The court docket rejected that argument outright. A home-owner doesn’t want an engineering diploma to testify that ice dams fashioned, that harm appeared shortly afterward, and that the harm didn’t exist earlier than. That isn’t professional testimony. That’s private information. It’s greater than sufficient to create a real dispute of truth. One wonders why Vacationers both dismissed these details or failed to seek out them via a correct investigation.
Vacationers’ personal engineering report compounded the issue. The engineer by no means inspected the property and relied solely on pictures taken lengthy after the loss. Even then, the report concluded solely that the harm “possible” occurred over time and expressly couldn’t rule out ice damming. That single concession was deadly to Vacationers’ argument that the exclusions utilized as a matter of legislation. Exclusions don’t apply within the summary. They apply provided that the excluded peril truly prompted the loss. When the insurer’s personal proof can’t get rid of the coated trigger, abstract judgment is off the desk.
The unhealthy religion evaluation is simply as instructive. Utah legislation imposes an implied obligation of excellent religion and truthful dealing requiring insurers to diligently examine claims, pretty consider them, and act promptly and fairly in denying or paying advantages. Insurers usually invoke the “pretty debatable” doctrine as if it have been a get-out-of-jail-free card. It isn’t. Utah courts have been clear {that a} declare will not be pretty debatable just because an insurer says so. The query is whether or not affordable minds might differ as as to whether the insurer met its obligations on the time of denial.
Vacationers supplied virtually no proof of what it truly did in the course of the declare course of to analyze or consider the loss. There was no significant onsite inspection past an preliminary go to tied to a distinct declare. There was no contemporaneous professional evaluation previous to the denial. There have been shifting explanations, lengthy intervals of silence, and no clear articulation of why any specific exclusion utilized. The court docket appropriately held that affordable jurors might conclude that this conduct fell in need of Utah’s unhealthy religion requirements. That alone required denial of abstract judgment.
The broader lesson is one I’ve seen repeated for many years. Insurers lose credibility after they change their tales. They lose after they depend on their typical solid of post-litigation specialists to justify pre-litigation selections. They lose unhealthy religion motions after they can’t present a disciplined, well timed, trustworthy, and clear claims course of. Many insurers now act in unhealthy religion by failing to promptly flip over all drafts of professional reviews or underwriting reviews about pre-loss circumstances of the property.
Ice dam circumstances, particularly, expose these weaknesses. They’re fact-driven, seasonal, and infrequently observable with out specialised testing. Lay witnesses matter as a result of they anchor the timeline. Public adjusters matter as a result of they doc circumstances the insurer selected to not examine. Courts matter as a result of they remind everybody that exclusions are usually not weapons to be deployed opportunistically and in a shotgun method. Exclusions are contractual provisions that must be able to being confirmed on the time of denial.
Thought For The Day
“The reality doesn’t change in accordance with our potential to abdomen it.”
— Flannery O’Connor
1 Andrew v. Vacationers Residence & Marine Ins. Co., No. 1:20-cv-00179, 2022 WL 2181662 (D. Utah June 16, 2022). See additionally, Vacationers Movement for Abstract Judgment, policyholder’s Opposition to Movement for Abstract Judgment, and Affidavit of Chad Andrews.