There is a clause in our homeowner’s policy that few of us are aware of. The Anti-Concurrent Causation clause is one of those best-kept secrets of the industry. This clause represents a huge risk for homeowners whose houses might be damaged or destroyed by a natural disaster or “peril”.
It’s important to understand what the Anti-Concurrent Causation clause represents, in order for us to be completely aware of our home coverage. With Hurricane Florence currently hitting the East Coast, policyholders might end up without protection and coverage after storm-related damages. We will look at what exactly is the Anti-Concurrent Causation clause, how it could affect our insurance policy, and alternatives to protect our home.
What Exactly Is the Anti-Concurrent Causation Clause?
The Anti-Concurrent Causation (ACC) clause, is legal insurance provision in most home insurance policies. This clause basically means that insurance companies could deny any coverage for expenses that result from damage that both included and excluded perils cause to an insured structure. Based on such a clause, when two different events damage a home at the same time, or one after the other, an insurance company can deny expenses coverage.
This creates a “trap-door” for hurricane-related damages. Some say that insurance companies could use such clauses to avoid litigation and disputes for coverage denial. This also creates a sense of useless insurance to homeowners who don’t expect this kind of policy exceptions.
How Could I Be Affected by the ACC Clause?
The Anti-Concurrent Causation clause could have a negative impact on policyholders who live in areas prone to hurricanes, particularly. It is a fact that hurricanes, regardless of their category, can cause severe property damage. Whether it is a result of wind, storms or floods, repairing or rebuilding property always comes to quite large sums of money. With the Anti-Concurrent Causation clause, our house must be damaged or destroyed by only one or such perils. If strong winds and floods damage our property, insurance companies could deny covering the expenses.
Such legal language came to light back in 2005, in the wake of Hurricane Katrina. Both wind and water damaged several properties of the affected areas. When policyholders filed the claims separately, the ACC clause didn’t apply. However, to those policyholders who filed one single claim for both damages, insurance companies completely denied expenses coverage based on ACC clauses.
What Can I Do to Protect My Home?
As a result of continuous litigation against insurance companies, ACC clauses are invalid in several states. These states include California, North Dakota, Mississippi, and West Virginia. So, if we live in any of these states, regular home insurance will protect our homes. For any other states, there are several alternatives available.
First, we need to make sure we have insurance coverage for both wind and water damage. If possible, coverage from the same carrier should be enough. If not, getting insurance for both damages can still protect us. Understanding how this clause works, and consulting with our insurance company is important, too.
We must keep in mind that ACC clauses exist to protect insurance companies from covering expenses for uncovered peril damage. If you think your insurance provider is wrongfully using Anti-Concurrent Causation clauses against your damage claims to avoid covering the expenses, you can always take the matter to court and expect a favorable result.