5th Circ. Ruling Aids Policyholder Deductible Calculations

By Tae Andrews (October 7, 2021, 3:32 PM EDT) -- A recent decision from the U.S. Court of Appeals for the Fifth Circuit spotlights an issue that has tremendous importance for policyholders: how to calculate the applicable deductible under property insurance policies where that deductible is presented as a percentage of the risk insured. Depending on how the deductible is calculated, a policy may provide millions of dollars in coverage — or none at all.

In McDonnel Group LLC v. Starr Surplus Lines Insurance Co., the Fifth Circuit grappled with the question of how to calculate a flood deductible under builder's risk policies.[1] The decision provides guidance for other policyholders with...

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