Earth Movement Exclusion Effective as Major Cause of Loss
One of Many Causes of Destruction of House was Earth Movement
Post 5111
See the full video at https://lnkd.in/gQA-s4zZ and at https://lnkd.in/gujv2ZER, and at https://zalma.com/blog plus more than 5100 posts.
Anti-Concurrent Cause Language Required Claim Denial
Read the full article at https://lnkd.in/gwWkr4SS, see the full video at https://lnkd.in/gQA-s4zZ and at https://lnkd.in/gujv2ZER, and at https://zalma.com/blog plus more than 5100 posts.
Terri Lawrence sued alleging that State Farm breached an insurance contract and acted in bad faith by failing to pay benefits under the contract. The case was removed to the United States District Court based on diversity jurisdiction, and the trial was set to begin on September 8, 2025.
In Terri Lawrence v. State Farm Fire..., No. C24-4008-LTS-MAR, United States District Court, N.D. Iowa, Western Division (June 25, 2025) the USDC applied anti-concurrent cause language to dismiss suit.
SUMMARY JUDGMENT
Relevant Facts
Lawrence purchased a property in Sioux City, Iowa, and insured it with State Farm. In January 2023, a burst water pipe caused significant damage to the property, leading to its condemnation.
On or about January 11, 2023, the Property was placarded as being unfit for human habitation by the Inspection Services Division of the City of Sioux City Iowa because of “major foundation and structural damage due to a burst water pipe.”
ANALYSIS
The earth movement exclusion unambiguously precluded coverage.
The party claiming entitlement to coverage under the policy must prove compliance with its terms.
Because the Policy’s earth movement exclusion unambiguously applies to preclude coverage, Lawrence cannot show that State Farm breached the Policy and her breach of contract claim fails as a matter of law.
Since State Farm had a reasonable basis for denying Lawrence’s claim her bad faith claim fails as a matter of law.
CONCLUSION
State Farm’s motion for summary judgment was granted in its entirety, the action was dismissed and judgment was entered in favor of State Farm and against plaintiffs.
ZALMA OPINION
Insurance litigants must be aware of the anti-concurrent cause language now existing in almost all modern insurance policies before bringing a breach of contract and bad faith suit. “Earth movement” was at least a contributing cause of the damage (and clearly a major one), plaintiffs are not entitled to coverage under the Policy. Even though some of the cause of her damage was a covered peril, earth movement was a major cause and was clearly and unambiguously excluded and State Farm’s claim denial was affirmed.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to my substack at https://lnkd.in/gmmzUVBy
Go to X @bzalma; Go to the Insurance Claims Library – https://lnkd.in/gwEYk
Happy Law Day
ZIFL – Volume 30, Issue 9 – May 1, 2026
Read the full article at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-may-1-2026-barry-zalma-esq-cfe-2tywc, see the video at at and at https://zalma.com/blog plus more than 5300 posts.
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
ZIFL – Volume 30, Issue 9 – May 1, 2026
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year and is written by Barry Zalma.
DOJ Creates National Fraud Enforcement Division
Will the Feds Take on Insurance Fraud? Possibly as Part of a National Anti-Fraud Effort
On April 7, 2026, the Acting Attorney General, Todd Blanche, issued a memorandum establishing the Department of Justice National Fraud Enforcement Division (NFED). The memo describes an ambitious, but perhaps redundant, vision for this ...
When Abalone Died As a Result of Multiple Causes The Efficient Proximate Cause Requires Payment
Post number 5345
Read the full article at https://www.linkedin.com/pulse/efficient-proximate-cause-doctrine-saves-claim-barry-zalma-esq-cfe-yndlc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
In American Abalone Farms, LLC v. Star Insurance Company et al., H052643, California Court of Appeals, Sixth District (April 27, 2026) the Court of Appeals dealt with an insurance coverage issue that required application of the efficient proximate cause doctrine.
FACTS
American Abalone Farms, LLC ("American Abalone" ) operates an aquaculture farm in Santa Cruz County, California, raising abalone in tanks. In August 2020, the CZU Lightning Complex Fires led to a prolonged power outage and road closures near the farm. As a result, the farm’s water pumps failed, causing the death of most of the ...
Breach of a Specific Condition Precedent Is a Complete Defense
See the video at and at and at https://zalma.com/blog plus more than 5300 posts.
In United Services Automobile Association and State Farm Mutual Automobile Insurance Company v. Anthony Wenzell, 2026 CO 25 (Colo. Apr. 27, 2026) Anthony Wenzell was rear-ended in a car accident. He had a significant prior 2014 accident that required back surgery.
Wenzell claimed underinsured-motorist (UIM) benefits under three policies: (1) the tortfeasor’s liability policy, (2) his own primary UIM policy with State Farm, and (3) an excess UIM policy issued by USAA (under his brother’s policy, which contained an “other insurance” clause making USAA’s coverage excess over any collectible insurance).
After receiving the claims, both USAA and State Farm repeatedly requested that Wenzell execute comprehensive medical-release authorizations so they could obtain his full medical records and ...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
What Must be Done after Notice of a Claim is Received by the Insurer
Read the full article at https://lnkd.in/gzvvdkMZ and at https://zalma.com/blog.
Below you will read from this post until you reach the the end of this blog post as the free part of an Excellence in Claims Handling post. To read the full article and receive all articles for members of Excellence in Claims Handling you should consider joining as a paid member to get full access to articles for members only, to our news, analysis, insurance coverage, claims, insurance fraud and insurance webinars, by clicking at the subscription link below.
A first party property policy does not insure property: it insures a person, partnership, corporation or other entity against the risk of loss of the property. Before an insured can make a claim for indemnity under a policy of first party property insurance the insured must prove that there was damage to property the risk of loss of which was insured by the policy. The obligation imposed on the insured ...
