In Los Angeles, during the rainy season, there are often mudslides that damage property. People who regularly drive the Pacific Coast Highway may be familiar with the phenomena, as traffic is often delayed or backed up due to landslides. Insurance coverage for property damage relating to landslides and other earth movement can raise complicated issues relating to causation, and application of coverage and exclusion provisions.
Most homeowner’s policies contain an exclusion for “earth movement”, a common example of which will specifically exclude losses for things like “landslide; mudflow; earth sinking, rising or shifting . . .” (Julian v. Hartford Underwriters Ins. Co. (2005) 35 Cal.4th 747, 751.) When a landslide occurs and damages property, the insurance company will often deny the resulting claim on the ground that the earth movement exclusion applies. This may not be correct, depending on what caused the landslide or earth movement.
Landslides are often caused, at least in part, by other events, like fires or floods. Fires can defoliate a hillside. This loss of shrubbery and foliage can decrease hillside stability during the rainy season, and result in landslides. Similarly, excessive water exposure onto a hillside, such as from pipe breaks or other accidental releases, can cause landslides. Fires and accidental pipe breaks are typically covered under a homeowner’s insurance policies. Where a fire, water loss, or other covered event, combine with an excluded event like earth movement, to cause a loss, coverage depends on the “efficient proximate cause” of the loss. (Garvey v. State Farm Fire & Casualty Co. (1989) 48 Cal.3d 395, 406-08.) Under the efficient proximate cause rule, “where there is a concurrence of different causes . . . the one that sets others in motion” determines whether coverage exists. (Sabella v. Wisler (1963) 59 Cal.2d 21, 31-32.)
California Courts have held that where a fire destroys “the vegetation on the slope,” followed by severe rainfall which causes a landslide, coverage exists if “the fire was the efficient proximate cause of the landslide,” despite the earth movement exclusion. (Howell v. State Farm Fire & Casualty Co. (1990) 218 Cal.App.3d 1446, 1449, 1459.) This principle applies to any covered loss contributing to a landslide or earth movement – the loss is covered if the covered event was the efficient proximate cause.
Whether a covered or excluded event is the efficient proximate cause for coverage purposes is normally an “issue of fact” for a jury to decide. (Howell, supra, at 1459.) In addition, to deny the claim, the insurance company has “the burden of establishing that the efficient proximate cause of [plaintiff’s] loss was an excluded peril.” (Alex R. Thomas & Co. v. Mut. Serv. Cas. Ins. Co. (2002) 98 Cal. App. 4th 66, 76.)
Thus, where a home or other property is damaged by a landslide or other earth movement, and an insurance company has denied the claim based on an earth movement exclusion, the cause of the landslide or movement should be carefully examined. If there is an argument that a covered event caused the land movement, and was the efficient proximate cause of the loss, there may be insurance coverage available.