The Mississippi Supreme Court has been asked, for the first time, to interpret the antic-concurrent causation clause in a homeowners’ insurance policy.  An anti-concurrent causation clause (“ACC clause”) generally provides that if a loss arises from a combination of covered and non-covered perils, the entirety of the loss is excluded from coverage.

Dr. and Mrs. Magruder S. Corbans’ home was damaged by both wind and storm surge during Hurricane Katrina.  The Corbans’ insurer paid $39,971.91 in damages under the Corbans’ homeowners’ policy, claiming that the remainder of the damage was excluded by the policy’s water exclusion, and that the ACC clause operated to exclude damage caused by a combination of water and wind.  However, the Corbans’ claim that the damage sustained to their property warranted the full payment of their homeowners’ policy limits, an amount in excess of $1 million.  The Corbans’ filed suit against their insurer.

In denying the Corbans’ motion for partial summary judgment, the Mississippi trial court held that the damage to the Corbans’ home that was at least partially caused by storm surge was excluded under the water damage exclusion.  The exclusion at issue excluded coverage for water damage, “meaning: flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind . . . .”  The court noted that while storm surge was not specifically listed in the exclusion, based on the ordinary definition of storm surge, it could be considered to be surface water, waves, tidal water, or even an overflow of a body of water, and therefore fell within the policy’s exclusion. (Click here to view a copy of the trial court’s Order).

As to the ACC clause, the trial court relied on numerous Fifth Circuit decisions [including those of Leonard v. Nationwide Mutual Insurance Company (click here and here for prior posts) and Tuepker v. State Farm Fire & Casualty Company (click here for prior post)], in holding that the ACC clause should be enforced.  The trial court held that pursuant to the ACC clause, where damage is caused by both an excluded peril and a covered peril, coverage is properly denied.

Earlier this month, the Corbans’ filed an interlocutory appeal to the Mississippi Supreme Court.

We will continue to provide updates on all Katrina-related coverage litigation on InsureReinsure.com.