Insurance is a big think – Have you ever tried to think?

In a moment of weakness twenty-something years ago, I agreed to serve as a substitute teacher for a semester. I’m not certain who was more delighted when it was over; but, suspect it was a tie between me and the little girl I pressed for an answer who looked me in the eye and said, I’m thinking. Have you ever tried to think? (emphasis on tried!)

It wasn’t until SLABBED that I really understood what she meant. Insurance is a big think. In addition to the complexity of the issues, insurance speaks a different language – one that doesn’t translate easily to the language of consumers. Even when those consumers are judges, they, too have to try to think and, for some, it comes easier than others.

Rossmiller makes that point in his latest post on anti-concurrent causation theory, AKA the ACC.

…if you go looking for the Anti-Concurrent Philosophy Library, you won’t find it… as with many insurance coverage issues, there is a great deal of room for scholarly examination… when you research just about any tough question, it’s not hard to find stuff that appears to be about the subject, but when you drill down into it, most of what you find is surface area with no core underneath.  The emphasis in the mass of legal literature on discovering what courts do — the search for rules — is often a chimera because, and I say this without rancor, courts often don’t know why they do what they do.  They have to do something so they do it.

Anti-concurrent cause theory is just one example of how a lack of philosophical inquiry and lack of curiosity as to “why” can harm the debate.

Whatever else my trying to think about the ACC lacks, it is not curiosity as to “why”. That I have in abundance. Part of my curiosity, I confess, is that the off-blog me spends enough time translating complex theories into understandable language to know the ACC theory is not nearly as complex as it is difficult to comprehend in application.

The ACC is to insurance what an 8oz can of coca-cola is to coke in a 12oz can – less product at the same price or more. In other words, the product is coverage and the policy is the can.

A policy that doesn’t pay for a covered loss is an empty can with the seal unbroken, an illusion of the intended outcome when the product was purchased.  In his post on the Fifth Circuit’s Leonard decision, Chip Merlin cites a presentation he had made a decade prior to Katrina (1994) where he suggested that the anti-concurrent causation language rendered the all-risk coverage illusionary and goes on to say that Judge Senter had it right:

“Read literally, this provision would exclude all coverage when a windstorm did damage to both an insured dwelling (a covered loss) and adjacent “screens, including their supports, around a pool, patio, or other areas.” (an excluded loss). I do not believe this is a reasonable interpretation of the policy.

A windstorm is a weather condition that is specifically included in the coverage of this policy. When the policy is read as a whole, I find that this exclusionary provision is ambiguous — the policy as a whole providing explicitly for windstorm coverage in one section and purportedly excluding the same coverage on the grounds that a windstorm, a “weather condition,” and an excluded peril, a flood; occurred at approximately the same time. The most reasonable interpretation for these conflicting policy provisions is that this policy provides coverage for windstorm damage, in accordance with its terms, and that coverage is not negated merely because an excluded peril (in this case storm surge flooding) occurs at or near the same time.

If this second provision were read to exclude wind damage that occurs at or near the time that any excluded water damage occurs, the result would be contrary to well-established Mississippi law…… This reading of the policy would make the windstorm protection illusory for those who live in areas where the risk of flooding is greatest.

Rossmiller contends…there was a very imperfect understanding of what anti-concurrent language was, what it does or why it exists – and that the key question in Katrina cases was did wind damage (a covered cause) combine with flood damage (an uncovered cause) to result in the loss, or were they two separate forces causing separate damage?

and the answer I came up with, which is now pretty well accepted, was that uncovered flood and covered wind had not acted concurrently in Katrina damage and therefore anti-concurrent language was not implicated at all.

According to Merlin’s post on the Leonard decision, he and Rossmiller reached some point of agreement about the Fifth’s decision specific to the where-did-that-come-from (Merlin) said-too-much (Rossmiller) example Judge Jones incorporated into the opinion.

“If, for example, a policyholder’s roof is blown off in a storm, and rain enters through the opening, the damage is covered. Only if storm-surge flooding – an excluded peril – then inundates the same area that the rain damaged is the ensuing loss excluded because the loss was caused concurrently or in sequence by the action of a covered and an excluded peril. The district court’s unsupported conclusions that the ACC clause is ambiguous and that the policyholder can parse out the portion of the concurrently caused damage that is attributable to wind contradict the policy language.”

However, Merlin goes on to say that he does not agree the Court read the anti-current clause correctly.

I do not agree that they read the anti-concurrent clause “right’ when it is accompanied by such a poorly reasoned analysis of causation and fails to consider the practical effect of what that reasoning does.

I’ve tried to think how the process I use to take theories to the level of practical application of theory to practice would apply when there are two credible but conflicting points of view.  However, since I’m not a lawyer, I didn’t get very far with that line of thinking.

My current bottom line is the anti-concurrent causation theory is inherently ambiguous regardless of how it’s written when the theory is applied to windstorm damage from a hurricane.

In the spirit of philosophical inquiry and curiosity as to “why,” I offer these thoughts:

• The example Judge Jones’ used to explain the application of anti-concurrent causation theory reflects sufficient confusion to establish ambiguity.

• There is no ambiguity in Rossmiller’s logical explanation/definition of the theory; but court decisions can’t stop there. The ultimate test, IMO, is whether windstorm damage was covered by a windstorm policy when the ACC was applied.

• In those cases where it’s allegedly been impossible to determine the extent of damage from wind versus that from flooding, the absence of certainty establishes the inherent ambiguity of applying the ACC to windstorm damage from a hurricane.

According to Rossmiller, following Katrina there was a very imperfect understanding of what anti-concurrent language was, what it does or why it exists.  I’ve tried to think why that would be the case.  Both he and Merlin acknowledge the theory isn’t new and hurricanes certainly are not.  So far, all I’ve come up with for an answer is it’s the ambiguity.

Rossmiller’s writing about anti-concurrent causation theory has separated wind from water in the windstorm of a hurricane to the extent I believe possible without a miracle comparable to the parting of the Red Sea.  IMO, the title of his post, Anti-concurrent cause: can an uncovered cause be superfluous to the analysis? will become the next FAQ of hurricane windstorm litigation although   Colorado Intergovernmental Risk Sharing Agency v. Northfield asks a different question:

…did the weight of the snow (a covered cause) actually combine with the rot (an uncovered cause) to result in the loss, or were they two separate forces causing separate damage?

As he wrote in the post, Rossmiller asked and answered the question regarding Katrina damage:

…and the answer I came up with…was that uncovered flood and covered wind had not acted concurrently in Katrina damage and therefore anti-concurrent language was not implicated at all.

Judge Senter picked up on that and added the support of data documenting the strongest wind comes hours before surge that causes flooding.

What I’m trying to think now is how to get a hurricane to understand.  The importance of resolving the ambiguity created when a hurricane’s water washes away the evidence of its powerful wind can not be denied when claims for windstorm damage are denied making coverage an illusion.

JMHO

Nowdy with thanks to Merlin and Rossmiller for their fine writing and hope for more