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Rhode Island court backs vandalism denial despite insurer citing fake cases
The court also clarified that appraisals under the policy address the dollar value of a loss, not whether the vandalism coverage period applies.
Rhode Island's Supreme Court upheld an insurer's denial of a vandalism claim after the insurer prevailed in a dispute stemming from damage found at a rental house following a tenant eviction. The case involved a dwelling and personal liability policy issued through the Rhode Island Joint Reinsurance Association, with the insurer taking the position that there was no evidence of vandalism and the claim did not meet the policy requirements.
The insureds bought the North Kingstown property in February 2014 and later found the house damaged after the tenant stopped paying rent. After an inspection by Flanagan Claims Service reported no evidence of vandalism, the insurer denied the claim and the dispute moved to a declaratory judgment action where the insurer sought to define the parties' rights and later added claims that the owners had made material misrepresentations and engaged in fraud.
A jury found the owners had not proven the damage occurred within the policy period, ending the case without reaching the fraud question. The court said the policy's appraisal clause, which allows either party to demand appraisal if the sides fail to agree on the amount of loss, was not the proper mechanism because the fight was about coverage, not valuation.
In an aside, the justices warned that the insurer's own filings contained inaccuracies, including citing cases that could not be located and quoting material not in the record. The court said the issues were not excused by reliance on technology and that attorneys remain responsible for the accuracy and veracity of their filings, according to Insurance Business.