Representing Insureds Since 1970

Insurance Advocate
Volume 103, No. 25
June 20, 1992

Status of "Valued Policy" Upheld By Court Despite Failure To Sum Up Items

The omission of the words "valued at" in a policy covering burglary insurance, either at the head or the end of an actual listing of items and individual values does not serve to negate its status as a "valued policy", a New York Supreme Court judge has ruled.

This suit by an insured against the Federal Insurance Company was based on allegations of fraud by the insurer as well as a demand for proof of actual values of 11 items of silverware covered in the policy. The insured, in bringing the suit, argued that because this was a "valued policy", the insurer was not entitled to make the demand for proof.

The policy also covered items of jewelry, but Federal did not dispute the valued policy aspect here because the language of the policy endorsement stated "blanket & 4 item(s) valued at $52,500."

The insured, Mr. Rubin, contended that the individual listing of the 11 silver items with a dollar figure set opposite each item was sufficient to meet the test of "stated value" even if they were not summarized under the term "valued at".

Judge Wright agreed. He said that the insurance company, in comparing the jewelry items with the silverware items was making a "distinction that is without a substantial difference."

To emphasize the point, Judge Wright call attention to the renewal policy which Federal had sent Rubin while the primary policy had not yet reached expiration and after the burglary was reported. Plaintiff-insured had indicated to the court that the renewal policy listed each piece of property, both jewelry and silver, and assigned the same sum as value as appeared in the original policy. This shows, the insured argued, that the policy is a "valued one" and does not require proof of the values because of the "contractual concession" by the insurer. Judge Wright cited a decision by the New York Court of Appeals (Lee v. Hamilton, 251 N.Y. 230), covering similar subject matter, in which the court refined the definition of valued policy. The Court of Appeals decision said that the policy "…is one in which the words 'valued at' appear and the amount at which the property insured is 'valued at' definitely fixes the liability of the insurer and is conclusive upon the parties." The high court concluded that since the policy fixed the amount at which the property was insured as valued at, "It (was) therefore a technical valued policy."

Based on this ruling, Judge Wright said that in the case before him "despite the absence of the words "valued at" at the head or the end of the listed items covered, the itemization itself with figures opposite, defines, at lease, in the case at bar, "a technical valued policy". He also adds that if there is some ambiguity afflicting the policy, "then, of course, it will be construed most strongly against the author of the policy".

In its defense in the Rubin case, Federal Insurance Company asserted "fraud". But Judge Wright characterized the charge, and particularly the failure t flush out such allegations as "concealment" or "misrepresentation" as "conclusory, too insubstantial and inoperative to annul the finding of a valued policy."

In addition to the $52,000 for the jewelry which was not in dispute, the decision of Judge Wright requires Federal to pay $34,375 for the 11 pieces of silverware which he added up in the policy, using what he described as "the court's primitive arithmetic."

The plaintiff, Rubin was represented in the suit and the trial before Judge Wright by Barbara A. Matarazzo, an attorney with the firm of Weg & Myers, P.C.