INSURANCE LAW SPRING 2010

INSURANCE LAWINSURANCE LAWSPRING 2010SPRING 2010

CLASS SESSION 3CLASS SESSION 3

PROFESSOR TRAVISPROFESSOR TRAVIS

NEED FOR EXCLUSIONSNEED FOR EXCLUSIONS

Chapter 4 E Exclusions and Their ExceptionsChapter 4 E 1 The Problem of Intrinsic Loss


(1) CONTROL ADVERSE (1) CONTROL ADVERSE SELECTIONSELECTION




(2) REDUCE MORAL HAZARD(2) REDUCE MORAL HAZARD





(3) CONTROL “CATASTROPHIC (3) CONTROL “CATASTROPHIC LOSSES”LOSSES”





(3) CONTROL “CATASTROPHIC (3) CONTROL “CATASTROPHIC LOSSES”LOSSES”

(4) AVOID DUPLICATION OF (4) AVOID DUPLICATION OF COVERAGE (MARKET COVERAGE (MARKET SEGMENTATION)SEGMENTATION)


INTRINSIC LOSSINTRINSIC LOSS

INSURE AGAINST THE INSURE AGAINST THE UNEXPECTEDUNEXPECTED


INTRINSIC LOSSINTRINSIC LOSS

INSURE AGAINST THE INSURE AGAINST THE UNEXPECTEDUNEXPECTED

NOT INHERENT NOT INHERENT CHARACTERISTICSCHARACTERISTICS

OF THE PROPERTYOF THE PROPERTY


CONCURRENT CAUSATIONCONCURRENT CAUSATION

ONE CAUSE IS EXCLUDEDONE CAUSE IS EXCLUDED




ANOTHER CAUSE IS NOTANOTHER CAUSE IS NOT




ANOTHER CAUSE IS NOTANOTHER CAUSE IS NOT

IS IT COVERED?IS IT COVERED?


INCREASED RISKINCREASED RISK

YOU WANT TO COVER LOSSES YOU WANT TO COVER LOSSES FROM ORDINARY FROM ORDINARY NEGLIGENCENEGLIGENCE


INCREASED RISKINCREASED RISK

YOU WANT TO COVER LOSSES YOU WANT TO COVER LOSSES FROM ORDINARY FROM ORDINARY NEGLIGENCENEGLIGENCE

BUT YOU DON’T WANT TO BUT YOU DON’T WANT TO ENCOURAGE MORAL HAZARDENCOURAGE MORAL HAZARD


CHUTE V. NORTH RIVER INS. CO.CHUTE V. NORTH RIVER INS. CO. (Pg. 211)(Pg. 211)

POLICY INSURES JEWELRY POLICY INSURES JEWELRY AGAINST “ALL RISKS OF LOSS AGAINST “ALL RISKS OF LOSS OR DAMAGE” INCLUDING OR DAMAGE” INCLUDING “BREAKAGE”“BREAKAGE”


CHUTE V. NORTH RIVER INS. CO.CHUTE V. NORTH RIVER INS. CO.

OPAL BREAKS DUE TO OPAL BREAKS DUE TO “INHERENT VICE”“INHERENT VICE”

IE. NO EXTERNAL FORCE IE. NO EXTERNAL FORCE CAUSES BREAKCAUSES BREAK



HELD: NO COVERAGEHELD: NO COVERAGE



NO LIABILITY UNDER POLICY NO LIABILITY UNDER POLICY FOR LOSS DUE TO CONDITION FOR LOSS DUE TO CONDITION INHERENT IN THE INSURED INHERENT IN THE INSURED PROPERTYPROPERTY



PROBLEM MAY BE THAT THE PROBLEM MAY BE THAT THE RULE DATES FROM EARLY RULE DATES FROM EARLY MARINE INSURANCE WHICH MARINE INSURANCE WHICH COVERS “PERILS OF THE SEA” COVERS “PERILS OF THE SEA” AND LOSS IS DUE TO AND LOSS IS DUE TO “INHERENT VICE”“INHERENT VICE”


RULE IS SIMILAR TO RULE IS SIMILAR TO “FRIENDLY FIRE” - HOSTILE “FRIENDLY FIRE” - HOSTILE FIRE DISTINCTIONFIRE DISTINCTION


FRIENDLY FIRE RULE: FOR FRIENDLY FIRE RULE: FOR LOSS TO BE COVERED UNDER LOSS TO BE COVERED UNDER FIRE INSURANCE, FIRE MUST FIRE INSURANCE, FIRE MUST BE AN UNINTENDED FIRE BE AN UNINTENDED FIRE AND NOTAND NOT

AN INTENTIONAL FIRE AN INTENTIONAL FIRE WHICH CAUSES DAMAGEWHICH CAUSES DAMAGE


STATE FARM FIRE & CAS CO v. STATE FARM FIRE & CAS CO v. BONGENBONGEN (Pg 214) (Pg 214)

Ch 4 E 2 Exclusions and Exceptions — Causation Problems

STATE FARM FIRE & CAS CO v. STATE FARM FIRE & CAS CO v. BONGENBONGEN

POLICY EXCLUDES “EARTH POLICY EXCLUDES “EARTH MOVEMENT” IMPROPER MOVEMENT” IMPROPER CONSTRUCTION TRIGGERS CONSTRUCTION TRIGGERS LANDSLIDELANDSLIDE



HELD: NOT COVEREDHELD: NOT COVERED

POLICY EXCLUDES POLICY EXCLUDES CONCURRENT CAUSESCONCURRENT CAUSES



MAJORITY SAYS: ENFORCE MAJORITY SAYS: ENFORCE THE THE

POLICY AS WRITTEN AND THEPOLICY AS WRITTEN AND THE

LANGUAGE (Pg 215) IS CLEAR LANGUAGE (Pg 215) IS CLEAR ENOUGH TO EXCLUDE ENOUGH TO EXCLUDE COVERAGECOVERAGE



OTHER COURTS (AND THE OTHER COURTS (AND THE DISSENT) REQUIRE DISSENT) REQUIRE COVERAGE OFCOVERAGE OF

CONCURRENT CAUSESCONCURRENT CAUSES


CONCURRENT CAUSE:CONCURRENT CAUSE:

COVERED CAUSE AND COVERED CAUSE AND EXCLUDEDEXCLUDED

CAUSE JOIN OR CONCUR TO CAUSE JOIN OR CONCUR TO CAUSE LOSSCAUSE LOSS


CONCURRENT CAUSE CONCURRENT CAUSE DOCTRINE— DOCTRINE—

WHEN A COVERED CAUSE WHEN A COVERED CAUSE JOINS WITH AN EXCLUDED JOINS WITH AN EXCLUDED CAUSE TO BRING ABOUT CAUSE TO BRING ABOUT LOSS, IT WILL BE COVERED LOSS, IT WILL BE COVERED (ABSENT SPECIFIC (ABSENT SPECIFIC EXCLUSION)EXCLUSION)


OKLAHOMA RULE IS OKLAHOMA RULE IS CONTRARY TO CONTRARY TO BONGENBONGEN - - KELLY V. FARMERS KELLY V. FARMERS N. 1 Pg. N. 1 Pg. 218 AND SUPPLEMENT Pg. 7218 AND SUPPLEMENT Pg. 7


LIRISTIS V. LIRISTIS V. AMERICAN FAMILY MUT. INS. AMERICAN FAMILY MUT. INS.

CO.CO.(Pg. 219)(Pg. 219)

Chapter 4 D 2 Limited Interests - Leaseholds

LIRISTIS V. AMERICAN FAMILYLIRISTIS V. AMERICAN FAMILY

INSUREDS HAVE A FIRE; INSUREDS HAVE A FIRE; WATER USED TO PUT OUT WATER USED TO PUT OUT THE FIRE CAUSES MOLDTHE FIRE CAUSES MOLD



INSURANCE COMPANY INSURANCE COMPANY REFUSES TO PAY FOR MOLD REFUSES TO PAY FOR MOLD BECAUSE OF MOLD BECAUSE OF MOLD EXCLUSIONEXCLUSION



TRIAL COURT APPLIES TRIAL COURT APPLIES EXCLUSION AND GRANTS EXCLUSION AND GRANTS SUMMARY JUDGMENTSUMMARY JUDGMENT



HELD: REVERSED; POLICY HELD: REVERSED; POLICY COVERS LOSS BY FIRE AND COVERS LOSS BY FIRE AND EXCLUDES LOSS CAUSED BY EXCLUDES LOSS CAUSED BY MOLDMOLD



HERE, FIRE CAUSED MOLD, HERE, FIRE CAUSED MOLD, WHICH WAS A LOSS RATHER WHICH WAS A LOSS RATHER THAN A CAUSE OF LOSSTHAN A CAUSE OF LOSS



INSURANCE COMPANY HAS INSURANCE COMPANY HAS TO BE VERY SPECIFIC IN TO BE VERY SPECIFIC IN WHAT IT EXCLUDESWHAT IT EXCLUDES



COULD IT BE THE COURT COULD IT BE THE COURT DOESN’T LIKE THE MOLD DOESN’T LIKE THE MOLD EXCLUSION WHERE THE EXCLUSION WHERE THE MOLD IS CAUSED BY A MOLD IS CAUSED BY A COVERED CAUSE (FIRE)?COVERED CAUSE (FIRE)?


ROSEN V. STATE FARM ROSEN V. STATE FARM GENERALGENERAL INSURANCE INSURANCE

COMPANYCOMPANY(Pg. 225)(Pg. 225)

Chapter 4 E 3 The Problem of Increased Risk

ROSEN V. STATE FARMROSEN V. STATE FARM

INSURED HAS DECKS WITH INSURED HAS DECKS WITH DETERIORATED FRAMING DETERIORATED FRAMING SUPPORT WHICH MADE SUPPORT WHICH MADE COLLAPSE IMMINENTCOLLAPSE IMMINENT



INSURED REPAIRS THE INSURED REPAIRS THE DECKS RATHER THAN LET DECKS RATHER THAN LET THEM COLLAPSETHEM COLLAPSE



INSURANCE COMPANY INSURANCE COMPANY DENIES CLAIM BECAUSE DENIES CLAIM BECAUSE POLICY COVERS ONLY POLICY COVERS ONLY ACTUAL COLLAPSE, NOT ACTUAL COLLAPSE, NOT IMMINENT COLLAPSEIMMINENT COLLAPSE



TRIAL COURT FINDS FOR TRIAL COURT FINDS FOR PLAINTIFF; COURT OF PLAINTIFF; COURT OF APPEALS AFFIRMSAPPEALS AFFIRMS



HOLDS PUBLIC POLICY DOES HOLDS PUBLIC POLICY DOES NOTNOT

FAVOR REQUIRING THE FAVOR REQUIRING THE INSURED TO LET THE INSURED TO LET THE STRUCTURE COLLAPSE STRUCTURE COLLAPSE BEFORE THERE IS COVERAGEBEFORE THERE IS COVERAGE



SUPREME COURT REVERSES; SUPREME COURT REVERSES; POLICY IS CLEAR AND MUST POLICY IS CLEAR AND MUST BE ENFORCED AS WRITTENBE ENFORCED AS WRITTEN



IS THIS REALLY AN IS THIS REALLY AN “INCREASED RISK” CASE?“INCREASED RISK” CASE?


NOTE: “SUE AND LABOR” NOTE: “SUE AND LABOR” CLAUSES APPEAR IN CLAUSES APPEAR IN COMMERCIAL POLICIESCOMMERCIAL POLICIES

(BUT NOT IN HOMEOWNERS (BUT NOT IN HOMEOWNERS POLICIES)POLICIES)


MAY PAY INSURED FOR COST MAY PAY INSURED FOR COST OF PREVENTING COVERED OF PREVENTING COVERED LOSSESLOSSES


DYNASTY, INC. V. PRINCETONDYNASTY, INC. V. PRINCETONINSURANCE COMPANYINSURANCE COMPANY

(Pg. 229)(Pg. 229)


DYNASTY, INC. V. PRINCETONDYNASTY, INC. V. PRINCETON

INSUREDS OWNED INSUREDS OWNED RESTAURANTRESTAURANT

THEY WERE CONVERTING TO ATHEY WERE CONVERTING TO A

NIGHTCLUBNIGHTCLUB



CITY REQUIRED FIRE CITY REQUIRED FIRE SPRINKLERS,SPRINKLERS,

WHICH INSUREDS INSTALLEDWHICH INSUREDS INSTALLED



FIRE BURNS THE INSURED FIRE BURNS THE INSURED PREMISES AFTER VALVE OF PREMISES AFTER VALVE OF SPRINKLER SYSTEM WAS SPRINKLER SYSTEM WAS LOCKED SHUTLOCKED SHUT



TRIAL COURT INSTRUCTS ON TRIAL COURT INSTRUCTS ON ARSON BUT NOT ON ARSON BUT NOT ON “INCREASE OF HAZARD” “INCREASE OF HAZARD” BASED ON BASED ON

DISABLING SPRINKLER DISABLING SPRINKLER SYSTEMSYSTEM



JURY FINDS FOR INSUREDS



HELD: REVERSED; TRIAL HELD: REVERSED; TRIAL COURT SHOULD HAVE COURT SHOULD HAVE INSTRUCTED ON INCREASE INSTRUCTED ON INCREASE OF HAZARD DEFENSEOF HAZARD DEFENSE


OKLAHOMA ADOPTS THE OKLAHOMA ADOPTS THE NEW YORK NEW YORK STANDARD STANDARD FIRE POLICYFIRE POLICY

(36 O.S. § 4803)(36 O.S. § 4803)


STATUTORY STANDARD STATUTORY STANDARD POLICY HAS “INCREASE OF POLICY HAS “INCREASE OF HAZARD” CLAUSEHAZARD” CLAUSE


STATUTORY FORM ALSO STATUTORY FORM ALSO CONTAINS “VACANT OR CONTAINS “VACANT OR UNOCCUPIED” CLAUSEUNOCCUPIED” CLAUSE

THAT THERE IS NO THAT THERE IS NO COVERAGE IF THE PROPERTY COVERAGE IF THE PROPERTY IS VACANT OR UNOCCUPIED IS VACANT OR UNOCCUPIED MORE THAN 60 DAYSMORE THAN 60 DAYS


OKLAHOMA LAW:OKLAHOMA LAW:MONARCH INS. CO. v. RIPPYMONARCH INS. CO. v. RIPPY

(Supp. Pg 11)(Supp. Pg 11)

INSUREDS LIVE IN INSUREDS LIVE IN OKLAHOMA BUT SPEND OKLAHOMA BUT SPEND WINTERS IN SOUTH TEXASWINTERS IN SOUTH TEXAS


MONARCH INS. CO. v. RIPPYMONARCH INS. CO. v. RIPPY

WHILE INSUREDS ARE IN WHILE INSUREDS ARE IN SOUTH TEXAS, GAS LINE SOUTH TEXAS, GAS LINE GETS CUT AND THERE IS NO GETS CUT AND THERE IS NO HEAT IN HOUSE SO PIPES HEAT IN HOUSE SO PIPES FREEZEFREEZE


MONARCH INS. CO. v. RIPPYMONARCH INS. CO. v. RIPPY

HELD: HOUSE IS NOT VACANT HELD: HOUSE IS NOT VACANT OR OR

UNOCCUPIED SO EXCLUSION UNOCCUPIED SO EXCLUSION DOESDOES

NOT APPLYNOT APPLY


““VACANT” AND VACANT” AND “UNOCCUPIED” MEAN “UNOCCUPIED” MEAN DIFFERENT THINGSDIFFERENT THINGS

““VACANT” = NOTHING THEREVACANT” = NOTHING THERE

““UNOCCUPIED” = NO ONE UNOCCUPIED” = NO ONE LIVES THERELIVES THERE


““COURTS ARE RELUCTANT TO COURTS ARE RELUCTANT TO VOIDVOID COVERAGE BASED ON COVERAGE BASED ON INCREASE OF HAZARD OR INCREASE OF HAZARD OR VACANT OR UNOCCUPIED VACANT OR UNOCCUPIED CLAUSESCLAUSES


ZOCHERT v. NATIONAL ZOCHERT v. NATIONAL FARMERSFARMERS UNION PROPERTY & UNION PROPERTY &

CASUALTY CO.CASUALTY CO. (Pg 237) (Pg 237)

Chapter 4 F Measure of Recovery

ZOCHERT v. NAT. FARMERS UNIONZOCHERT v. NAT. FARMERS UNION

POLICY PROVIDES FOR POLICY PROVIDES FOR “ACTUAL CASH VALUE” (ACV) “ACTUAL CASH VALUE” (ACV) PAYMENTPAYMENT

DO YOU DEDUCT DO YOU DEDUCT DEPRECIATION?DEPRECIATION?



HELD: YES; FAILURE TO HELD: YES; FAILURE TO DEDUCTDEDUCT

DEPRECIATION WOULD DEPRECIATION WOULD VIOLATEVIOLATE

INDEMNITY PRINCIPLEINDEMNITY PRINCIPLE


BROAD EVIDENCE RULE SAYS BROAD EVIDENCE RULE SAYS THAT USUAL RULE OF THAT USUAL RULE OF REPLACEMENT COST LESS REPLACEMENT COST LESS DEPRECIATION MAY NOT DEPRECIATION MAY NOT RESULT IN PROPER ACTUAL RESULT IN PROPER ACTUAL CASH VALUECASH VALUE


CONSIDER OBSOLETE CONSIDER OBSOLETE PROPERTY OR PROPERTY PROPERTY OR PROPERTY THAT HAS A GREATLY THAT HAS A GREATLY INFLATED VALUE IN LIGHT INFLATED VALUE IN LIGHT OF DEVELOPMENTOF DEVELOPMENT


BROAD EVIDENCE RULE BROAD EVIDENCE RULE GIVES THE COURT LEEWAY GIVES THE COURT LEEWAY TO TAKE THESE THINGS INTO TO TAKE THESE THINGS INTO ACCOUNTACCOUNT


OKLAHOMA PROBABLY OKLAHOMA PROBABLY ADOPTS BROAD EVIDENCE ADOPTS BROAD EVIDENCE RULE BUT NOT BY THAT RULE BUT NOT BY THAT NAMENAME


SEE: SEE: EAGLE FIRE INS. CO. OF EAGLE FIRE INS. CO. OF NEW YORK V.NEW YORK V.SNYDERSNYDER, 392 F.2D , 392 F.2D 570 (10TH CIR. 1968):570 (10TH CIR. 1968):ACV IN OKLAHOMA IS ACV IN OKLAHOMA IS DETERMINED BY CONSIDERINGDETERMINED BY CONSIDERINGORIGINAL COST, REPLACEMENT ORIGINAL COST, REPLACEMENT COST, AGE OF PROPERTY,COST, AGE OF PROPERTY,CONDITION OF MAINTENANCE, CONDITION OF MAINTENANCE, AND LOCATION, USE ANDAND LOCATION, USE ANDPROFIT FROM ITS USE.PROFIT FROM ITS USE.


SEEMS TO ADOPT BUT NOT SEEMS TO ADOPT BUT NOT NAME “BROAD EVIDENCE NAME “BROAD EVIDENCE RULE.” SEE ALSO:RULE.” SEE ALSO:

ROCHESTER AMERICAN INS. ROCHESTER AMERICAN INS. CO. V. SHORTCO. V. SHORT, 252 P.2D 490, 252 P.2D 490 (OKLA. 1953) (MARKET VALUE (OKLA. 1953) (MARKET VALUE NOT EXCLUSIVE).NOT EXCLUSIVE).



DECISION IS PROBABLY DECISION IS PROBABLY WRONGWRONG

BECAUSE OF PECULIAR BECAUSE OF PECULIAR POLICY PROVISION ON pg 238POLICY PROVISION ON pg 238


POLICY MAY PROVIDE FOR POLICY MAY PROVIDE FOR REPLACEMENT COST — REPLACEMENT COST — ENABLES INSURED TO ENABLES INSURED TO REBUILD OR REPLACEREBUILD OR REPLACE


POLICY MAY REQUIRE POLICY MAY REQUIRE ACTUAL REPLACEMENTACTUAL REPLACEMENT


HOW DOES THIS ACTUALLY HOW DOES THIS ACTUALLY WORK?WORK?

INSURED PROBABLY CAN’T INSURED PROBABLY CAN’T AFFORD TO FRONT THE AFFORD TO FRONT THE MONEY TO REPLACE MONEY TO REPLACE PROPERTYPROPERTY


INSURANCE COMPANY PAYS INSURANCE COMPANY PAYS ACV ACV

INSURED USES THAT TO INSURED USES THAT TO REPLACE SOME OF THE REPLACE SOME OF THE PROPERTYPROPERTY


INSURANCE COMPANY THEN INSURANCE COMPANY THEN PAYS THE DIFFERENCE PAYS THE DIFFERENCE BETWEEN ACV AND BETWEEN ACV AND REPLACEMENT COST FOR REPLACEMENT COST FOR THAT AND INSURED USES THAT AND INSURED USES THAT TO REPLACE MORETHAT TO REPLACE MORE


COINSURANCE COINSURANCE REQUIREMENT: REDUCES REQUIREMENT: REDUCES PARTIAL LOSS PAYMENTS TO PARTIAL LOSS PAYMENTS TO RATIO BY WHICH PROPERTY RATIO BY WHICH PROPERTY IS UNDERINSUREDIS UNDERINSURED


GREAT NORTHERN OIL CO. v.GREAT NORTHERN OIL CO. v.

ST. PAUL F&MST. PAUL F&M (pg 246) (pg 246)

Ch 4 G Subrogation

GREAT NORTHERN v. ST. PAUL GREAT NORTHERN v. ST. PAUL F&MF&M

REFINERY BUYS “ALL RISK” REFINERY BUYS “ALL RISK” POLICY COVERING, AMONG POLICY COVERING, AMONG OTHERS, BUSINESS OTHERS, BUSINESS INTERRUPTIONINTERRUPTION

Ch 4 G Subrogation


AFTER POLICY BUT BEFORE AFTER POLICY BUT BEFORE LOSSLOSS

REFINERY CONTRACTS WITH REFINERY CONTRACTS WITH CONSTRUCTION CO. CONSTRUCTION CO.

Ch 4 G Subrogation


CONSTRUCTION K RELEASES CONSTRUCTION K RELEASES DAMAGESDAMAGES

Ch 4 G Subrogation


LOSS FROM CONSTRUCTION LOSS FROM CONSTRUCTION ACCIDENTACCIDENT

CAN REFINERY RECOVER?CAN REFINERY RECOVER?

Ch 4 G Subrogation


HELD: YES – ADVANCE HELD: YES – ADVANCE RELEASE DOES NOT DESTROY RELEASE DOES NOT DESTROY COVERAGECOVERAGE

Ch 4 G Subrogation

CLEARLY, POST-LOSS RELEASE CLEARLY, POST-LOSS RELEASE DESTROYS CLAIM EXCEPT DESTROYS CLAIM EXCEPT WHEN TORT-FEASOR KNOWS WHEN TORT-FEASOR KNOWS OF SUBROGATIONOF SUBROGATION

AETNA v. ASSOCIATES AETNA v. ASSOCIATES TRANSPORTSTRANSPORTS, (OKLA SUPP Pg , (OKLA SUPP Pg 11)11)

Ch 4 G Subrogation

FUNCTIONS OF SUBROGATION:FUNCTIONS OF SUBROGATION:

* FOSTERS INDEMNITY * FOSTERS INDEMNITY PRINCIPLEPRINCIPLE

* AVOIDS WINDFALLS* AVOIDS WINDFALLS

* HOLDS DOWN PREMIUMS* HOLDS DOWN PREMIUMS

Ch 4 G Subrogation

RELATION TO COLLATERAL RELATION TO COLLATERAL SOURCE RULE: SOURCE RULE:

KEEPS LOSS ON WRONGDOERKEEPS LOSS ON WRONGDOER

SUBROGATION: DOES SAME SUBROGATION: DOES SAME ANDAND

AVOIDS WINDFALLAVOIDS WINDFALL

Ch 4 G Subrogation

NORTHWEST FARM BUREAUNORTHWEST FARM BUREAUINS. CO. v. ALTHAUSERINS. CO. v. ALTHAUSER (Pg. (Pg.

253)253)

Chapter 4 H 1 Limited Interests - Mortgages

NORTHWEST v. ALTHAUSERNORTHWEST v. ALTHAUSER

INSURED BARRED FROM INSURED BARRED FROM RECOVERY BY FRAUD AND RECOVERY BY FRAUD AND FALSE SWEARING FALSE SWEARING



INS CO PAYS MORTGAGE CO INS CO PAYS MORTGAGE CO MORTGAGE CO SUES TO MORTGAGE CO SUES TO FORECLOSEFORECLOSE



HELD: INS CO CAN HELD: INS CO CAN FORECLOSEFORECLOSE

INS CO STANDS IN SHOES INS CO STANDS IN SHOES OF MORTGAGE COOF MORTGAGE CO



INSURANCE COMPANY INSURANCE COMPANY WHICH DOESN’T OWE WHICH DOESN’T OWE INSURED WILL PAY INSURED WILL PAY MORTGAGEE AND MORTGAGEE AND

SUBROGATE AGAINST SUBROGATE AGAINST INSUREDINSURED


INNOCENT COINSUREDINNOCENT COINSURED

(N.1. P. 254)(N.1. P. 254)


INNOCENT COINSURED INNOCENT COINSURED BARRED IN OKLAHOMA – BARRED IN OKLAHOMA – SHORT v OKLA FARMERS SHORT v OKLA FARMERS UNIONUNION, 1980 OK 155, 619 , 1980 OK 155, 619 P.2d 588P.2d 588


REBUILD OR REPAY NO REBUILD OR REPAY NO CLEAR RULE (N.2 P. 255)CLEAR RULE (N.2 P. 255)


ALASKA INS. CO. v. RCA ALASKAALASKA INS. CO. v. RCA ALASKA (pg 256)(pg 256)

Chapter 4 H 2 Leaseholds

ALASKA INS. CO. v. RCA ALASKAALASKA INS. CO. v. RCA ALASKA

TENANT CAUSES FIRETENANT CAUSES FIRE

LANDLORD’S INS CO SUES TENANTLANDLORD’S INS CO SUES TENANT

IS TENANT A CO-INSURED?IS TENANT A CO-INSURED?



HELD: YESHELD: YES

LANDLORD’S INS CO CAN’T LANDLORD’S INS CO CAN’T SUBROGATE AGAINST TENANT SUBROGATE AGAINST TENANT BECAUSE CAN’T SUBROGATE BECAUSE CAN’T SUBROGATE AGAINST OWN INSUREDAGAINST OWN INSURED



OKLA LAW – SAME, OKLA LAW – SAME, SUTTON v. SUTTON v. JONDAHLJONDAHL HOWEVER, MUST BE HOWEVER, MUST BE INSURED UNDER SAME COVERAGE, INSURED UNDER SAME COVERAGE, TRAVELERS v. DICKEYTRAVELERS v. DICKEY (Supplement (Supplement pg. 10)pg. 10)


PARAMOUNT FIRE INS. CO. v. AETNA PARAMOUNT FIRE INS. CO. v. AETNA CAS. & SUR. CO.CAS. & SUR. CO. (pg 262) (pg 262)

Chapter 4 H 3 Real Estate Sales

PARAMOUNT FIRE INS. CO. v. AETNAPARAMOUNT FIRE INS. CO. v. AETNA

BUYER AND SELLER BOTH BUYER AND SELLER BOTH INSURE PROPERTY WHICH INSURE PROPERTY WHICH BURNS BEFORE CLOSINGBURNS BEFORE CLOSING

Chapter 4 D 3 Limited Interests - Real Estate Sales


BUYER TAKES PROPERTY AND BUYER TAKES PROPERTY AND PAYS, TAKING ASSIGNMENTPAYS, TAKING ASSIGNMENT



WHICH INS CO HAS TO PAY?

AETNA- AETNA-

PURCHASER’S INSURANCE CO.PURCHASER’S INSURANCE CO.



WHEN DO YOU DETERMINE LOSS?

TRIAL COURT AND SUPREME COURT LOOK TO WHOLE TRANSACTION



DISSENT AND COURT OF APPEALS LOOK TO TIME OF FIRE


WHO HAS THE RISK OF LOSS?

COMMON LAW: PURCHASER


WHO HAS THE RISK OF LOSS?


UNIFORM VENDOR AND PURCHASER

RISK ACT - 16 O.S. § 202:

ON VENDOR UNTIL LEGAL OR EQUITABLE TITLE PASSES.

ON PURCHASER AFTER LEGAL OR EQUITABLE TITLE PASSES.


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