Wednesday, October 7, 2009

Fourth District Reverses Finding Coverage Due To Ambiguity In All Risk Policy

In Liebel v. Nationwide Insurance Company of Florida (4D08-3356), the Fourth District reversed the trial court's summary judgment and held the all risk policy provided by Nationwide covered the loss due to an ambiguity in the policy.
The insured bought an all risk policy meaning that coverage is provided “[u]nless the policy expressly excludes the loss from coverage,  this type of policy provides coverage for all fortuitous loss or damage other than that resulting from willful misconduct or fraudulent acts.” Fayad v. Clarendon Nat. Ins. Co., 899 So. 2d 1082, 1085 (Fla. 2005)...under an all-risk policy, an exclusion applies if the loss clearly and unambiguously fits within its provisions...The loss to Liebel’s home was caused by the shifting of earth under th e home that was, in turn, caused by earth shifting from unnatural causes, i.e., the water line rupturing. The loss was, therefore, specifically excluded from the Policy’s coverage by the earth movement exclusion, even though it was caused by an unnatural force, as the exclusion clearly and unambiguously stated that the loss sustained at Liebel’s home fell within it.
In the instant case, the trial court erred by not holding that the Policy covered the cost of repairing the plumbing system. This is because the Policy, by providing that it does not cover damage caused by water from a plumbing system that is otherwise excluded, but then stating that it covers the cost of repairing a system that caused water damage, has created an ambiguity, as two or more reasonable interpretations of these two intersecting provisions are feasible...Such an interpretation is also in accord with the principle that an all-risk policy will cover a loss falling within its coverage unless that loss is specifically excluded, as the Policy did not specifically exclude the cost of repairing a plumbing system from its coverage.


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