Property owners in Florida carry insurance in part because mortgage lenders require this coverage. Even if they make cash purchases or have paid off the principal balance owed on the mortgage, they may continue not to pay for insurance coverage due to the risk of inclement weather that could damage or destroy their homes.
Numerous issues can arise during large property insurance claims that can lead to denied claims, reduced payouts or significant delays. The insurance company invoking the Anti-Concurrent Causation (ACC) clause could potentially put the entire claim at risk of denial.
Policyholders who have experienced major weather events may need to review their policy and the ACC clause within it with a skilled legal team to understand their options and pursue the coverage they deserve.
What is an ACC clause?
Insurance companies include ACC clauses in their policies to limit their financial exposure. The concurrent causation doctrine favors policyholders, so insurance companies add ACC clauses to limit their risk.
Typically, the ACC clause is near the beginning of the exclusion section of the policy paperwork. This clause essentially protects the insurance company from liability if an excluded source of damages contributed to the property damage included in the claim.
ACC clauses often address sequential events, such as an excluded event that occurs after a covered event. They also address scenarios where both an excluded and a covered form of peril occur simultaneously.
During a hurricane, for example, the policy might cover wind damage but exclude flooding damage. Given that both of these forms of peril impact the property at the same time, the insurance company potentially has the ability to deny the entire claim despite the presence of a covered source of damages. Even in cases where an excluded source of risk only caused a minimal amount of the property damage, the ACC clause may allow the insurance company to deny the entire claim.
After a Florida hurricane, homeowners may find themselves experiencing a “slab claim” scenario. The storm caused the absolute destruction of the improvements on the property, leaving only the concrete slab foundation.
Homeowners may need to prove what order certain damage occurred in order to prove that they have the right to receive any compensation for the damage to their property. Homeowners may need assistance from legal professionals who can assess the insurance policy and forensic engineers who can help evaluate the different types of damage that occurred.
Negotiating a policy without ACC clauses before damage occurs can also be beneficial. Policyholders may want to review their property coverage policies with a legal professional before they renew or purchase coverage to ensure they won’t face an uphill battle if they ever need to make a claim after a hurricane or similar event. Understanding the potential complications that can arise during insurance claims can help policyholders pursue the coverage they’ve purchased.