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A federal district court in Colorado has ruled that a “broad exclusion” for earth movement in a homeowner’s insurance policy precluded coverage for damage that resulted when a large rock detached from a cliff and struck and damaged the insured's home.

Homeowner's insurance claim denied

On April 20, 2016, a large rock detached from a cliff face roughly 1/4 mile from the home owned by John and Arlene Bulinski near Ouray, Colorado, striking their home, breaking through the south wall and first floor, and lodging in the basement.

The Bulinskis made a claim under the homeowners’ insurance policy they had acquired from State Farm Fire and Casualty Company.

State Farm denied coverage on the ground that the loss had been caused by “earth movement” within the meaning of a policy exclusion.

The Bulinskis sued, and the parties moved for summary judgment.

What specific force caused rock to break free?

The Bulinskis argued that the flaw in State Farm’s denial of coverage was that it had not determined, in its investigation of the claim, what specific force had caused the rock to break free, and consequently it never had, and could not, articulate how any particular seismic, geological, or other force that generally would be considered “earth movement” had anything to do with the event.

Therefore, they argued, State Farm could not meet its burden of proving that the earth movement exclusion applied and that the exclusion was “not subject to any other reasonable interpretations.”

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The State Farm policy provided:

LOSSES NOT INSURED

2. We do not insure under any coverage for any loss which would not have occurred in the absence of one or more of the following excluded events. We do not insure for such loss regardless of: (a) the cause of the excluded event or (b) other causes of the loss; or (c) whether other causes acted concurrently or in any sequence with the excluded event to produce the loss; or (d) whether the event occurs suddenly or gradually, involves isolated or widespread damage, arises from natural or external forces, or occurs as a result of any combination of these:

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