Sandusky, State Farm End Coverage Dispute
By Chad Hemenway, PropertyCasualty360.com
Convicted child abuser Gerald Sandusky and his home- owners’ insurer, State Farm, settled a lawsuit brought by
the insurer to have a judge declare the
company has no obligation to defend the
former Penn State University assistant
Sandusky had looked to his State
Farm homeowners’ policy for defense
and indemnity costs related to his
criminal trial and a civil lawsuit filed
According to court records, U.S.
District Court Judge Yvette Kane in the
Middle District of Pennsylvania dismissed the suit after Sandusky and State
Farm filed a consent motion to dismiss
the case. The consent order is signed by
Sandusky and his wife, Dorothy.
“Gerald Sandusky has no intention to
tender to State Farm any future claims
similar to the claims involving alleged
sexual misconduct that he
previously tendered,” reads
the order, which adds that
the couple agrees with State
Farm that it “has no obligation to provide defense to or
State Farm began insuring
the Sandusky home in State
College, Pa. in April 1985.
It was primarily a property
coverage policy with limited
personal liability coverage applying only
to bodily injury caused by an occurrence, according to court documents.
Sandusky in June 2012 was found
guilty on 45 of 48 counts related to the
sexual abuse of boys.
The insurer did provide a defense to
Sandusky for the civil action filed in
November 2011—shortly after
Sandusky was first charged
with sex crimes—involving
his charity for children with
State Farm says it issued a
“reservation of rights letter”
to Sandusky, which informs a
policyholder that an insurer
may eventually deny coverage
for all or part of the claim.
The homeowners’ policy
“excludes coverage for bodily injury that
is intentionally caused by the policy-
holder” and it does not cover injury
because of “willful and malicious acts of
N.J. Bill Would Make Insurers
Summarize Homeowners’ Policies
By Mark E. Ruquet, PropertyCasualty360.com
Abill proposed in the wake of Superstorm Sandy that would have insurers produce a single-page summary of
a homeowners policy in New Jersey
moved a step closer to passage after an
Assembly committee approved language
the industry can live with.
On Jan. 14, the Financial Institutions and
Insurance Committee sent to the Assembly
floor a bill (A-3642) that would require
insurers writing homeowners policies to
provide a consumer-information brochure
“written in a simple, clear, understandable,
and easily readable way” explaining the hurricane deductible and providing information about flood insurance.
As first reported in the The Star-
Ledger, the reason for the bill is that
Superstorm Sandy demonstrated that
consumers do not understand their
insurance policies and the bill is an effort
to clear-up that confusion, explained As-
semblyman Gary Schaer, D-Bergen and
Passaic, a primary sponsor.