New Jersey Legislation Would Bar Anti-Concurrent Causation Clause in Homeowners' Policies

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The policy bars coverage if two perils (i.e., wind and water damage) contribute to a loss and one peril is excluded from coverage.

June 8, 2020
Tred R. Eyerly - Insurance Law Hawaii

A bill prohibiting the use of anti-concurrent causation clauses in homeowners' insurance policies has been introduced before the New Jersey legislature. The bill is here.

Under an anti-concurrent causation clause, the policy bars coverage if two perils (i.e., wind and water damage) contribute to a loss and one peril is excluded from coverage. For example, wind damage alone may be covered, while water damage is excluded. If both wind and water contribute to the loss, regardless of the degree to which each peril contributes, the anti-concurrent causation clause would bar coverage.

New Jersey S 217 states,

An insurer authorized to transact the business of homeowners insurance in this state shall not exclude coverage in a homeowners insurance policy for loss or damage caused by a peril insured against under the terms of the policy on the grounds that the loss or damage occurred concurrently or in any sequence with a peril not insured against under the terms of the policy. Any such provision to exclude coverage shall be void and unenforceable.

Mr. Eyerly may be contacted at te@hawaiilawyer.com



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