Danino v. Fairmont Insurance Brokers, Index No. 157059/2018 (New York Co. Sup. Ct. Sept. 6, 2019)
This litigation involved a first-party property insurance claim for interior water damage. The applicable policy allowed the broker to add properties if they met certain criteria, including having a value of no more than $400,000. The broker attempted to add the subject premises with a coverage limit of $600,000, but was informed that the request would require the insurer’s approval, which was later declined. Thereafter, the insured, a property investor, made a claim for storm damage, alleging that the loss occurred before the insurer declined to add the premises and that the broker represented coverage was in force at the time.
The insurer successfully moved for summary judgment based on the policy’s exclusions and the fact that it was not in force on the alleged date of loss. The insured argued that the broker was the insurer’s agent and, therefore, its representation that the policy was in force was binding on the insurer. The insured also argued that the insurer had issued coverage for other buildings under the policy that were valued in excess of $400,000, so it should be estopped from rejecting the request to add the subject building to the policy.
The court rejected the insured’s agency argument, finding no such relationship with the broker. It also rejected the estoppel argument because the policy stated: “The Total Insured Value (TIV) for a Described Premises scheduled and reported on our Reporting Schedule may not exceed $400,000.” The insured was unable to establish that the insurer ever represented anything to the contrary with respect to the building, notwithstanding exceptions that may have been granted in the past. As a result, the court held that the policy was not inforce on the date of the loss.