Adamo v. Fire Insurance Exchange (2013) 219 Cal.App.4th 1286

When San Diego wildfires damaged landscaping on a homeowner’s property and several detached outbuildings, GMSR’s insurance-carrier client reimbursed the homeowner’s losses in excess of $100,000, exhausting his standard homeowners’ policy sub-limit for “other structures” (defined as those separated from the dwelling by “clear space”). When the carrier declined coverage for damages to his detached 10,000-gallon water tank, complex irrigation system and culverts used to service his avocado grove, the homeowner sued. He claimed that even though it was undisputed that the squarely applicable “other structures” coverage was exhausted, the carrier breached the policy and acted in bad faith for not finding additional coverage elsewhere in the policy—including the “dwelling” coverage—to cover the losses to the detached structures. After a bench trial on stipulated facts, the trial court ruled for the defendant insurance carrier. The plaintiff-homeowner appealed.

The Court of Appeal affirmed. Based on the policy’s plain meaning, the Court of Appeal agreed with the trial court that the separate “dwelling” and “other structures” coverage were distinct and not overlapping. If a loss falls under one coverage provision (here, “other structures”) it cannot, as a matter of law, also fall under a separate coverage provision (such as the “dwelling” coverage).

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