Last week, PC360 ran an article about a Colorado federal district court case, Bulinski v. State Farm Fire and Cas. Co., finding that the earth movement exclusion in a homeowners policy precluded coverage for a “falling rock.”

An almost identical claim scenario was submitted to the IIABA Virtual University in 2010 and we had seen the same type of loss several times prior to that. This resulted in an article published on the VU (password required for access).

The consensus of the VU faculty of coverage was different than the decision reached by this court. Most responders felt that, at best, this situation was ambiguous and that the historical perspective is that “earth movement” refers to large scale, catastrophic type exposures like earthquake and landslide, not a singular boulder rolling downhill. One member in particular, Mike Edwards, CPCU, used this logic to find for coverage:

I think the word “earth” in “earth movement” is plural. It’s talking about an expanse of earth moving like in an earthquake or an amalgamation of dirt, rocks, etc. (aka, an avalanche or landslide) moving. As such, I don’t think a singular boulder would constitute “earth movement.”

Webster’s definition of “earth” includes “the fragmental material composing part of the surface of the globe; especially :  cultivable soil.” That sure sounds like the word “earth” is most often viewed as a plural noun and not to a big rock.

So, if the exclusion doesn’t apply, under most open perils policies, there would be coverage. Even under most broad named perils policies, the rock might qualify as a “falling object.” What do you think? Is the court correct or is there another reasonable interpretation of what “earth movement” refers to?

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Bill Wilson

Founder at InsuranceCommentary.com
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information

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