Homeowners doesn’t cover defense of home condition warranty. Norfolk & Dedham v Norton Ma App Ct (2021)

FACTS

The homeowners made statements in the seller’s disclosure while they owned the place; then they sold the house.

Flooding from severe storms hit a house two years after it had been sold. The buyers sued years later alleging the representations were false.

The sellers wanted the homeowner’s insurer who covered the property when they owned it, to defend the claim.

Homeowners insurance does cover personal injury and property damage but it excludes many claims.

The seller’s homeowner’s insurance covered premises ‘owned by the insured’ but excluded any properties not ‘listed’ as an ‘insured location’.

ISSUE   1

Did the property damage ‘arise out of’ the uninsured, unlisted property?

Arises out of = has a causal connection to the condition of the premises

HOLDING 1

This storm driven property damage arose out of the topography and location of the premises.

ISSUE 2

Was this unlisted property ‘owned by an insured’? The sellers owned the home when the alleged misrepresentations were made. They did not own it when the flooding, property damage occurred.

HOLDING 2

Insurer does not owe coverage on previously owned unlisted property. They set premiums based on inspections of known properties and the court would not impose coverage on properties not listed as covered.