NORTH CAROLINA 

Insured Can Sue Broker For Negligence Despite Not Reading His Application

Jones owned an eight-acre property with a half-acre pond in front of his house. Hatcher, a broker, offered to secure cheaper insurance, asking Jones to sign a single-page application without questions. Hatcher inspected and photographed the property, completed and backdated the application, and secured a homeowners policy. Later, Hatcher placed coverage with another insurer, again providing only a blank application form for Jones to sign. Hatcher filled out and backdated the application. When Hurricane Florence destroyed the home in 2018, the insurer rescinded the policy because the pond had not been disclosed.

Jones sued Hatcher, which moved to dismiss and asserted that Jones' contributory negligence (i.e., not reading his completed application) barred his claim. The North Carolina Supreme Court allowed the suit to proceed, noting Jones' reliance on his broker could be reasonable since the broker had secured coverage the same way before. The dissent argued that negligence on both sides meant the claim should have been dismissed. Decision.

LOUISIANA

No Coverage for Sand-and-Sugar Concrete Catastrophe

A trucking company, R&J, mistakenly delivered sand mixed with sugar to a concrete plant. The concrete company used the sand-sugar mixture to produce defective concrete, which did not properly cure and had to be removed. The concrete company sued R&J. R&J's Business Auto and CGL insurer denied coverage based on numerous exclusions. The trial court granted summary judgment to the insurer. The Fifth Circuit Court of Appeals affirmed that neither policy provided coverage. The loss arose out of the use of an auto because the contamination occurred during transportation. As such, the Auto exclusion in the CGL policy precluded coverage. The Business Auto policy did not provide coverage. Since the sand became contaminated with sugar during transportation by R&J, the Business Auto's care, custody, or control exclusion precluded coverage. As such, the Fifth Circuit affirmed summary judgment to the insurer. Decision.

CALIFORNIA

Over $17 Billion Paid Out for Los Angeles Wildfire Claims

We previously covered California's online tracker related to the Los Angeles wildfire claims. The tracker reports the number of claims submitted, partially paid claims, and total paid out for home, business, and living expenses claims. Per the May 12, 2025 update, insurers have paid out $17.1 billion to approximately 35,000 policyholders. California Claims Tracker.

ILLINOIS

One-Year Suit Limitation Enforced

The policyholder filed suit against her homeowner's insurer 19 months after the loss. The insurer moved for judgment on the pleadings pursuant to the policy's one-year suit limitation provision. The trial court granted the motion, and the appellate court affirmed. As such, Illinois courts have enforced suit limitation provisions in insurance policies as short as one year. Decision.

NEW YORK

DFS Requires Insurers to Develop Disaster Response Plans

New York Department of Financial Services (DFS) issued a circular letter requiring insurers to prepare plans to continue insurance operations during disasters (natural, cyber, terrorist, etc.). It requires insurers to:

• Submit annual data on policies, coverage, and insured vehicles by county for key lines (property, auto, flood, earthquake, etc.);
• Conduct yearly analysis to assess operational and financial risks from disruptions;
• Identify critical functions, impacts, resources needed, and customer effects; and
• Develop and update separate Business Continuity and Disaster Response plans addressing how to maintain operations during disasters.

Group and captive insurers must demonstrate that existing group or captive plans adequately serve the entity's needs or develop appropriate plans. DFS Circular Letter.