Coverage for Named Windstorm Removed by Insured, Terminating Such Coverage

    Over a series of policies, the insured had no coverage for named windstorms when it was removed from the policies in return for a reduced premium. Shiloh Christian Ctr. v. Aspen Sec. Ins. Co. 2022 U.S. Dist. LEXIS 100959 (M. D. Fla. May 9, 2022). 

    Plaintiff had coverage from Aspen from 2014 through at least 2018 under several year-long policies, each of which renewed the prior year’s policy. The premium for the 2014-2015 Policy was $50,000. In May 2015, plaintiff asked what the premium would be without hurricane coverage. He was informed this would reduce the premium to $32,000. The insured asked for the change in coverage to eliminate named windstorm coverage and a return premium was issued to the insured for $16,545.

    The 2016-2017 policy was issued for a premium of $22,500. The policy indicated it was a renewal of the prior policy. The revised quote made clear that the policy would exclude coverage for “Named Windstorm.” 

    On October 6, 2016, plaintiff’s property was struck by Hurricane Matthew, causing extensive damage. Plaintiff submitted a claim on October 11, 2016 under the 2016-12017 policy, reporting the damages as “Water Damage from Roof Hurricane Matthew.” After inspection, Aspen denied the claim because no wind damage was observed and the policy excluded Named Windstorm as a covered peril. 

    Another renewal policy was issued for 2017-2018. Thereafter, Hurricane Irma damaged the insured’s property on September 10, 2017. On August 4, 2018, the insured submitted a claim under the 2017-2018 policy, listing only “Hurricane Irma” as the cause of loss. This claim was also denied by Aspen because the damage appeared to be the same damage caused by Hurricane Matthew and because of lack of coverage for damage due to a named windstorm. 

    Plaintiff filed suit alleging breach of contract and seeking a declaratory judgment as to coverage under the policies. Both parties filed motions for summary judgment. 

    The court found that named windstorm coverage was excluded from each of the policies from July 2015 forward. At this time, the insured sought to remove named windstorm coverage to save on the premium. Nevertheless, the insured contended that the renewal of the 2015-2016 policy – i.e,, the 2016-2017 policy- did not contain the same exclusions, The record showed the claim was false. The reduced premium earned by dropping named windstorm coverage was carried through to subsequent policies. Thus, the insured continued to receive the benefit of its July 2015 bargain by receiving lower premium in exchange for reduced coverage.

    Therefore, Aspen’s motion for summary judgment was granted and the insured’s motion was denied.