New Jersey Insurance Pollution Exclusion

Success on Appeal

On March 19, 2020, our client prevailed on an appeal we filed after an adverse trial court ruling in Schoneboom v. Allstate New Jersey Insurance Company, 2020 WL 1322828. See Court Opinion Here. The fight was over insurance coverage for contamination from a leaking underground fuel storage tank that our client discovered on her property years after she purchased it. The projected costs to remediate oil contamination were substantial and without coverage, our client’s family would have experienced severe economic hardship.

Allstate described this as a “test case,” as it fought our client for years in an effort to restrict the scope of “sudden and accidental” liability coverage in New Jersey homeowner insurance policies. If Allstate had prevailed, the trial court ruling would have allowed insurers using the same standard form of policy to deny coverage whenever homeowners discover a leaking underground fuel storage tank.

Allstate had argued that an oil leak from a corroded tank was not legally “sudden and accidental,” but that term had been given a definite meaning in the landmark New Jersey Supreme Court case Morton International, Inc. v. General Accident Insurance Co. of America, 134 N.J. 1 (1993). Under Morton, our client was entitled to sudden and accidental coverage. After coverage was determined, in light of Allstate’s breach of the insurance contract, the court also awarded legal fees.

We anticipate that prior to the ruling in Schoneboom, many other New Jersey homeowners may have been denied “sudden and accidental” coverage by Allstate and other insurers, and that it may take litigation based on our successful appeal to vindicate their rights.