Insurer Gets Bad Press For Denying Victim's Claim
The article below (following this analysis) appears in the New York Post of 5 July 2012. According to the article, the insured homeowner's husband kicked down her door and attacked her with a knife, slitting her throat, and spilling blood all over her house. She managed to survive the attack, and applied to her insurer, Tri State Consumer Insurance Company, for reimbursement of the cost of cleaning up the blood. Tri State denied the claim, citing the intentional act exclusion.
Notwithstanding the newspaper's characterization of the insurer, is Tri State's position correct? Maybe, but maybe not. The courts have been using a yardstick for the "intentional act" exclusion which views the "intention" from the standpoint of the insured. A recent decision is illustrative.In Metropolitan Prop. & Cas. v Marshall, 2010 NYSlipOp 51149, Denise Fox was murdered by defendant Marshall's son. The son committed the murder while he was on a weekend pass from a psychiatric facility to visit his mother. When Fox's estate sued Marshall, Marshall's homeowner's insurer provided her with a defense but her umbrella carrier disclaimed. A DJ action ensued.The Court, in finding coverage, wrote,"Here, under the subject policy, the occurrences are defined as 'an accident.' An incident is an occurrence, i.e., an accident, if from the point of view of the insured the incident resulting in the injury was unexpected, unusual and unforeseeable. State Farm Fire and Casualty Company v. Whiting, 53 AD3d 1033 (4th Dept. 2008), quoting Miller v. Continental Ins. Co., 40 NY2d 675, 677 (1976), citing Automobile Ins. Co. of Hartford v. Cook, 7 NY3d 131, 137-138 (2006); Essex Ins. Co. v. Zwick, 27 AD3d 1092 (4th Dept. 2006). In deciding whether a loss is the result of an accident, it must be determined, from the point of view of the insured, whether the loss was unexpected, unusual and unforeseen. Agoado Realty Corp. v. United Intern. Ins. Co., 95 NY2d 141, 145 (2000), citing Miller v. Continental Ins. Co., supra, at p. 677."
"Since the insured here, the Defendant, MARSHALL, obviously did not expect and could not foresee her son murdering Denise Fox, that act was in fact an 'accident' from her point of view. See, RJC Realty Holding Corp. v. Republic Franklin Ins. Co., 2 NY3d 158 (2004)."
Now, given the above, should the homeowner below be covered for the cost of cleaning up the blood? Certainly, the assault upon her was neither intentional nor expected from her own point of view. If that were the only question, there would appear to be coverage. However, if the husband who committed the assault was also an insured (and/or a resident relative), it gets more complicated. Then you have the intentional act of one insured causing the damage, which, in this particular case, is not the personal injury to the wife, but the cost of cleaning up the blood. From that standpoint, the intentional act exclusion would appear to apply.
But there is another wrinkle in the story: the husband who committed the assault is described as "deranged" at the time. The husband was killed in a car crash right after the assault, so it's going to be harder to figure out his psychological state, but if he was truly "deranged," it could be argued that he lacked the ability to form the intent to commit the act. Hence: no intentional act.
Since "intentional act" cases tend to be very fact-dependent, it will likely take a DJ action to resolve the coverage question.
I invite representatives of both the homeowner and Tri State to comment.
Insurance company fails to pay after husband slashes LI woman
Last Updated: 5:40 AM, July 5, 2012
Posted: 1:18 AM, July 5, 2012
A Long Island woman survived her husband's throat-slashing attack only to have to deal with her outrageously cutthroat insurance company.
After Daphne Beard was nearly killed five weeks ago, the last thing she thought she'd have to worry about was getting her insurance claim approved to clean up the blood in her Bay Shore home.
But Tri-State Consumer Insurance President Penny Hart said that the company wouldn't pay the $25,000 bill because the damage was the result of an "intentional" act by Beard's deranged husband, which voided any claim.
"This is totally bizarre,'' said Beard, 47, whose husband, Carl, 48, kicked in the door of her home on May 25 and slashed her twice in front of two of their kids.VICTOR ALCORN
"He wasn't here to commit insurance fraud he was here to commit murder," an astounded Beard went on.
"They're denying the claim because he intentionally attacked me and I got blood all over the house.
"It's inhuman. It's disgusting it's pouring salt into an open wound,'' she added.
After the attack, her husband, carrying a loaded gun, was accidentally killed by a car while fleeing cops, police said.
"We cannot comment on a specific case but, in general, an innocent spouse should not be penalized because of the act of a guilty spouse,'' said state Department of Financial Services spokesman David Neustadt.
Still, the insurance company's president says she won't back down.
"What did he think was going to happen when he slit her throat in the house?'' said Hart.