Policy Properly Canceled Upon Mortgage Payoff, N.J. Federal Judge Rules in Awarding Insurer Summary Judgment

TRENTON, N.J. — A New Jersey federal judge has awarded a mortgage servicing company and a flood insurer summary judgment in a Superstorm Sandy coverage action, ruling that the policy was effectively terminated more than three months before the claimed loss.

On May 26, Judge Mary L. Cooper of the U.S. District Court for the District of New Jersey concluded that the insurer properly canceled the policy when the claimant, a third-party beneficiary of the policy, paid off his mortgage.

Marius Ged owns a house in Point Pleasant Beach, N.J. Select Portfolio Servicing Inc. (SPS) was the designated servicer of …