Did the Homeowners All Risk Insurance Policy Provide More Coverage in 1959 than It Does Today?

By Chip Merlin
risk

We often take the Homeowners All Risks forms for granted. Historically, the “all-risk” nature of a homeowner’s form was not developed until the middle of the 20th Century. A 1959 law review article, All Risks of Loss v. All Loss: An Examination of Broad Form Insurance Coverages, was written by the insurance defense attorney, John Gorman. It discussed this new form of coverage which provided insurance for “all risks of physical loss.”

The article quoted another source for the new features of the residential all-risk policy. One authority, pointing out the desirable features of all risks coverage, has summarized the advantages as follows:

  1. The concept of one policy covering all conceivable risks is imbued with the simplicity of understanding so that the nature and scope of the Insured Event is readily appreciated by the insuring public.
  2. The policy avoids costly overlapping of coverages and duplication of premiums in the interest of the insured.
  3. The policy provides complete protection by filling in all possible gaps in coverage.
  4. The concept greatly minimizes the adverse selection of the insurer.
  5. The concept is conducive to economies in the insurance business with respect to management, marketing, servicing, and collecting of premiums, in particular.

The notion that an all-risk homeowners policy provides “complete coverage” is no longer apparent today. In, Insurance Coverage Gaps—An Increasing Insurance Crisis Which Needs To Be Addressed and Stopped, I noted how law professor Jay Feinman has been raising issues about protection gaps which also include significant policy coverage gaps.

Nevertheless, the 1959 law review article listed a specimen homeowners policy. Do these exclusions found in that policy seem easier to read and fewer in number than those in the modern all-risk forms? We often take the Homeowners All Risks forms for granted. Historically, the “all-risk” nature of a homeowner’s form was not developed until the middle of the 20th Century. A 1959 law review article, All Risks of Loss v. All Loss: An Examination of Broad Form Insurance Coverages, was written by the insurance defense attorney, John Gorman. It discussed this new form of coverage which provided insurance for “all risks of physical loss.” From my experience, these exclusions are exceedingly less complex than today’s forms.

What happened to the Good Old Days? And wasn’t 1959 the best year ever?