$5 Million Flood Sublimit in Quota Share Policies Not Separate, N.Y. Judge Rules in Sandy Coverage Case

NEW YORK — A $5 million flood sub-limit contained in four separate policies issued in a quota share program are not separate, rather they are shared by the insurers and cannot be stacked, a New York judge has ruled in granting the insurers summary judgment in a Superstorm Sandy coverage action.

On May 11, Judge Shirley W. Kornreich of the New York County Supreme Court concluded that it “would not make commercial sense” to treat the sublimits as separate and that the purpose of the quota share program is to spread the risk across multiple carriers in order to lower …