Three short days after we posted “Anti-Concurrent Causation Clauses On My Mind,” a New Jersey Asssemblyman introduced legislation that would outlaw such clauses in the State.
As discussed at some length in a September 6 post, Anti-concurrent Causation Clauses eliminate insurance coverage when a chain of events, at least one of which is covered and one of which is excluded, act together or in sequence to cause an otherwise covered loss under an insurance policy. On September 9, 2013, New Jersey Assemblyman Patrick Diegnan (D) introduced legislation that would make it illegal to include an ACC clause in a homeowner’s policy. The legislation would apply prospectively to policies issued after the law takes effect. If the legislation passes the State Senate and gets signed by the Governor, it would make New Jersey the fifth State to pass statutes that elminate or limit the effect of ACC clauses. The others are California, North Dakota, Washington, and West Virginia. The New York Assembly has also taken up a bill to limit the effect of such clauses.
Every state has an active and influential insurance lobby and New Jersey is no exception. In the recent past, for example, salutory legislation relating to bad faith claim handling has died in committee. A number of years ago, designer legislation was passed and signed into law by then-Governor Christine Todd Whitman that exempted Lloyds of London, a “non-admitted” insurance carrier, from having to post a bond before it could participate in litigation in New Jersey. The insurance industry is sure to fight this bill, and to issue dire warnings about the coming of the apocalypse if the proposal becomes law.
In the September 6 blog post, we suggested that the recent New York bill to limit ACC clauses might be a bellweather for similar proposals in other Sandy-affected states, including New Jersey. We really had no idea that it would happen a mere three days later.