In a letter dated June 25, 2007, the Consumer Federation of America urged insurance commissioners around the country to ban the use of anti-concurrent-causation clauses (“ACC clauses”) in insurance policies. Anti-concurrent-causation clauses generally provide that if a loss arises from a combination of covered and non-covered perils, the entirety of the loss is excluded from coverage. ACC clauses have been the subject of several Katrina-related lawsuits over the past year and a half.
In its letter, the Federation argues that such clauses are against public policy and dangerous to insureds: “the purpose of the clause is to override coverage for an insured claim if, at or about the same time, an uncovered event also occurs.” The Federation further asserts that, regardless of an insurance company’s attempts at clarifying the wording of Anti-Concurrent-Causation Clauses, such provisions will inherently be ambiguous.
A copy of the Federation’s letter is attached here.
