CAST IRON PIPES RUST & LEAK
Barry Zalma
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Acts of Nature are Excluded
Marisol Rosa (“Rosa”) appealed a final summary judgment entered in favor of Safepoint Insurance Company (“Safepoint”). In Marisol Rosa v. Safepoint Insurance Company, No. 5D21-3005, Florida Court of Appeals, Fifth District (November 14, 2022) the Court of Appeals interpreted an exclusion for damages caused by an act of nature.
The Insurance Policy
Safepoint insured Rosa’s dwelling pursuant to a homeowners insurance policy. The dwelling was damaged by the overflow of water from the plumbing system. The parties agree that the loss resulted from the deterioration of cast iron pipes that was caused by “rust or other corrosion.” After investigating the damage, Safepoint determined the loss was excluded from coverage under the policy’s Water Damage Exclusion Endorsement. Rosa then sued seeking to recover the costs she incurred in repairing her dwelling due to the water damage.
The Issue
The issue in this appeal is whether the policy covers the subject loss, and the answer depends on the meaning of the term “act of nature” in the policy.
The introductory paragraph of the policy’s Exclusions section states that the policy does “not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. . . .” The definition of “Water Damage” following that introductory language was replaced by an endorsement to the policy, the Water Damage Exclusion Endorsement, which defines “Water Damage” as including: “d. Accidental or intentional discharge or overflow of water or steam from within a plumbing, heating, air conditioning or automatic fire protective sprinkler system or from within a household appliance; . . . . Caused by or resulting from human or animal, forces or any act of nature.” (emphasis added)
Thus, if the rust or other corrosion that caused this loss was an act of nature, Safepoint correctly denied coverage. But, if the rust or other corrosion was not an act of nature, the Water Damage Exclusion Endorsement did not preclude coverage.
Policy Interpretation
The interpretation of an insurance policy is a question of law reviewed de novo. The guiding principle for insurance policy interpretation is that the policy must be read as a whole, affording words their plain meaning as bargained for by the parties. Florida law provides that insurance contracts are construed in accordance with the plain language of the policies as bargained for by the parties.
The insured argued that “act of nature” is synonymous with “act of God” and only occurs when a singular act or external force occurs. However, everyday interpretation of the phrase “act of nature” is not as narrow or technical as the insureds propose but rather is to be given its ordinary meaning as “something that naturally occurs.”
Read the Full Policy
The Court of Appeal found that in the context of this policy the phrase “act of nature” does not require an uncontrollable or unpreventable event. Here, the loss was caused by rust or corrosion. Corrosion, the chemical reaction between iron and moist air, is an act of nature or a naturally occurring force. Thus, the rust or corrosion occurred because of a natural act. As a result, the Water Damage Exclusion endorsement applied to this loss.
Such losses are excluded even if they were caused concurrently by a covered peril. In context, “any act of nature” is not limited to natural disasters, i.e., an act of God.
The policy at issue references “an Act of God” more than once in its Cancellation and Nonrenewal sections. Where the document has used one term in one place, and a materially different term in another, the presumption is that the different term denotes a different idea. As a general proposition, the use of different language in different contractual provisions strongly implies that a different meaning was intended. In light of the entire policy, the use of “an Act of God” and “any act of nature” separately indicates each phrase has a different meaning for the purpose of this homeowners insurance policy. Relatedly, the choice of the drafters to capitalize “an Act of God” stands in contradiction to the uncapitalized use of “any act of nature” in the exclusion.
The distinction further undermines Rosa’s argument that the terms “any act of nature” and “an Act of God” are interchangeable within the policy. Because the phrase “any act of nature” is made expressly applicable to the Water Damage Exclusion Endorsement the Court of Appeal concluded, as is required by basic insurance policy rules of interpretation, that the phrase is to be given its ordinary meaning.
In sum, the rust or other corrosion that occurred in the pipes in Rosa’s dwelling, regardless of whether it was perhaps preventable or controllable, was a naturally occurring force and thus an act of nature.
As an act of nature, the loss came within the policy exclusion for “any act of nature.” Consequently, the Court of Appeal concluded that Safepoint correctly denied coverage.
ZALMA OPINION
Insurance policies are always interpreted by reviewing the entire policy to make sense of the intent of the parties. Since the term “act of nature” only appeared with regard to the water damage exclusion and “Act of God” appeared elsewhere it was obvious to the court that the terms had different meanings. Rust is natural when moisture and air meets iron. It exists naturally in hillsides, abandoned autos and in iron pipes. The cause of the loss was the rust that caused the insured’s pipes to leak and damage her property. No insurance policy insures against every possible risk of loss and the cause of the loss was clearly and unambiguously excluded.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected].
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Interpleader Protects All Claimants Against Life Policy and the Insurer
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Interpleader Protects All Claimants Against Life Policy and the Insurer
In Metropolitan Life Insurance Company v. Selena Sanchez, et al, No. 2:24-cv-03278-TLN-CSK, United States District Court, E.D. California (September 3, 2025) the USDC applied interpleader law.
Case Overview
This case involves an interpleader action brought by the Metropolitan Life Insurance Company (Plaintiff-in-Interpleader) against Selena Sanchez and other defendants (Defendants-in-Interpleader).
Key Points
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In Jeffrey B. Scott v. Certain Underwriters At Lloyd’s, London, Subscribing To Policy No. B0901li1837279, RLI Insurance Company, Certain Underwriters At Lloyds, London And The Insurance Company, Subscribing To Policy No. B0180fn2102430, No. 24-12441, United States Court of Appeals, Eleventh Circuit (August 25, 2025) the court explained the need for a claim to obtain coverage.
Case Background:
This appeal arises from a coverage dispute under a Directors & Officers (D&O) insurance policy. Jeffrey B. Scott, the plaintiff-appellant, was terminated from his role as CEO, President, and Secretary of Gemini Financial Holdings, LLC in October 2019. Following his termination, Scott threatened legal action against Gemini, and ...
A Claim by Any Other Name is not a Claim
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It is Imperative that Insured Report Potential Claim to Insurers
Read the full article at https://lnkd.in/gfbwAsxw, See the full video at https://lnkd.in/gea_hgB3 and at https://lnkd.in/ghZ7gjxy, and at https://zalma.com/blog plus more than 5150 posts.
In Jeffrey B. Scott v. Certain Underwriters At Lloyd’s, London, Subscribing To Policy No. B0901li1837279, RLI Insurance Company, Certain Underwriters At Lloyds, London And The Insurance Company, Subscribing To Policy No. B0180fn2102430, No. 24-12441, United States Court of Appeals, Eleventh Circuit (August 25, 2025) the court explained the need for a claim to obtain coverage.
Case Background:
This appeal arises from a coverage dispute under a Directors & Officers (D&O) insurance policy. Jeffrey B. Scott, the plaintiff-appellant, was terminated from his role as CEO, President, and Secretary of Gemini Financial Holdings, LLC in October 2019. Following his termination, Scott threatened legal action against Gemini, and ...
Barry Zalma: Insurance Claims Expert Witness
Posted on September 3, 2025 by Barry Zalma
The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit
© 2025 Barry Zalma, Esq., CFE
When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive ...
The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit
© 2025 Barry Zalma, Esq., CFE
When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive and became a consultant and expert witness for lawyers representing insurers and lawyers ...
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It’s a Waste of Time to Sue Your Insurer if You Don’t Have Evidence
In Debbie Beaty and Jonathan Hayes v. Homeowners Of America Insurance Company, No. 01-23-00844-CV, Court of Appeals of Texas, First District (August 26, 2025) Debbie Beaty and Jonathan Hayes filed a claim under their homeowner’s insurance policy with Homeowners of ...