California Court of Appeal, 11640 Woodbridge Condominium Homeowners’ Association v. Farmers Insurance Exchange, B333848

First Party Property Insurance

 

“Named Perils” or “Specific Perils” Policies

 

“Specified-Risk” Coverage

 

“All-Risk” Policies

 

Marine Insurance

 

California Law

 

 

Sec. Sources: Tort Trial & Ins. Prac. L.J.; Couch on Insurance; New Appleman on Insurance Law Library Edition (2023).

 

 

 

First party property insurance indemnifies property owners against loss to property. (Another Planet Entertainment, LLC v. Vigilant Ins. Co. (2024) 15 Cal.5th 1106, 1122 (Another Planet), citing 10A Couch on Insurance (3d ed. 2005) § 148:1.) There are two general categories of first-party property insurance. “Named perils” or “specific perils” policies provide coverage only for the specific risks enumerated in the policy and exclude all other risks. (7 Couch on Insurance, supra, § 101:7.) “All-risk” policies provide coverage for all risks unless the specific risk is excluded.  (Ibid.; Another Planet, at p. 1122.) “‘Historically, property insurance grew out of the insurance against the risk of fire which became available for ships, buildings, and some commercial property at a time when most of the structures in use were made wholly or primarily of wood.’ (10A Couch on Insurance, supra, § 148:1.) ‘On this side of the Atlantic, fire insurance first developed in the middle of the eighteenth century. . . . This was insurance against only one cause of loss, or peril—fire. Over time other insured perils, such as wind and hail, were added. These insured perils were each specified in the insurance policy. For this reason, such insurance came to be known as “specified-risk” coverage. It insured property against the risk of damage or destruction resulting from specified causes of loss.’ (Abraham, Peril & Fortuity in Property & Liability Insurance (2001) 36 Tort Trial & Ins. Prac. L.J. 777, 782–783, fn. omitted.) By contrast, marine insurance developed ‘standardized forms that insured an ocean-going vessel and its cargo against “perils of the high seas.” Whereas the development of fire insurance for property on land focused on the danger presented by a specified cause of loss, marine insurance typically provided coverage for all risks associated with a particular shipment or voyage.’ (5 New Appleman on Insurance Law Library Edition (2023) § 41.01[1], fn. omitted.) ‘By the middle of the twentieth century, insurers adopted the marine insurance approach by offering all-risk commercial and homeowners’ property insurance. The operative phrase in such policies is contained in the section labeled “Perils Insured Against,” and provides coverage against the risk of “direct physical loss” to covered property.’ (Abraham, at p. 783, fn. omitted.)“ ‘As with any insurance, property insurance coverage is “triggered” by some threshold concept of injury to the insured property. Under narrow coverages like theft, the theft is itself the trigger. Under most coverages, however, the policy specifically ties the insurer’s liability to the covered peril having some specific effect on the property. In modern policies, especially of the all-risk type, this trigger is frequently “physical loss or damage” . . . .’ (10A Couch on Insurance, supra, § 148:46.)” (Another Planet, supra, 15 Cal.5th at pp. 1122–1123.)

 

 

 

(California Court of Appeal, March 28, 2025, 11640 Woodbridge Condominium Homeowners’ Association v. Farmers Insurance Exchange, B333848, Certified for Publication)