Magda Benavides purchased her ground-floor condominium in1994. Seven years later, mold was found in the exterior walls adjacent to herunit. Benavides’ physician advised her to move out.
She submitted a claim to her condominium owner’s insurancecompany, State Farm, which hired a civil engineer to investigate. State Farmlater denied the claim because it was an excluded loss, which was not caused byan insured peril. The insurer pointed to its policy exclusion for mold.
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Benavides also filed a claim based on water intrusion damagefrom an upstairs unit. Water leaked into Benavides’ kitchen and living roomduring remodeling of the second-floor condo, which was promptly repaired by theneighbor.
The insured condo owner brought this lawsuit against StateFarm for alleged negligent investigation of her insurance policy claims.
If you were the judge would you order State Farm to paydamages to Benavides for negligent investigation of her policy claims?
The judge said no!
The evidence showed the accidental water intrusion damageduring remodeling of the upstairs condo unit was promptly repaired, the judgebegan. Therefore, neither State Farm nor the upstairs neighbor is liable toBenavides, he ruled.
As for Benavides’ mold damage claim, he continued, StateFarm points to its policy exclusion for damage caused by mold, he explained.The evidence showed State Farm promptly hired a civil engineer to investigatethe mold and, based on that report, denied policy coverage as an excluded causeof damage, the judge emphasized.
When there is no insurance policy coverage for the molddamage, there can be no liability by the insurer for negligent investigation ofa policy claim, the judge ruled. Therefore, State Farm has no liability to theinsured, Magda Benavides, he concluded.
Based on the 2006 California Court of Appeals decision in Benavidesv. State Farm, 39 Cal.Rptr.3d 650.
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Copyright 2006 Inman News