Lawsuit: U.S. Fire Insurance ‘Categorically’ Refused Coverage for Trips, Events Canceled Amid COVID-19 Crisis

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United States Fire Insurance Company has improperly denied all insurance claims related to trips or events canceled amid the COVID-19 pandemic, according to a proposed class action out of New York.

Filed by a consumer who purchased the defendant’s “A+ Program Protection Plan” to cover her son’s now-canceled summer camp, the 11-page lawsuit alleges United States Fire Insurance issued blanket denials to all COVID-19-related claims despite clear language in its policies specifying “quarantine” as a covered event.

“The denial of the claim was wrongful,” the complaint asserts. “Defendant should have paid the claim and obtained any available recourse from the camp.”

The case explains United States Fire Insurance underwrites travel, trip and event cancellation insurance, including the A+ Program Protection Plan purchased by the plaintiff to cover her son’s $11,800 pre-paid overnight summer camp at Camp Lenox in Otis, Massachusetts.

According to the case, the plaintiff’s insurance plan stated benefits would be paid when the insured is prevented from taking the covered trip due to “Other Covered Reasons listed below,” including “You or Your Traveling Companion being . . . quarantined . . .”

Though the policy fails to define “quarantined,” the common meaning of the term is “a restraint upon the activities or communication of persons or the transport of goods designed to prevent the spread of disease or pests” and “a state of enforced isolation,” per the complaint. The lawsuit argues that a series of executive orders issued by Massachusetts and New York in response to the COVID-19 pandemic constitute a quarantine that caused the plaintiff’s son’s camp to be canceled and prevented him from attending.

“The cancellation of events by official order issued for the purpose of curbing the spread of contagious disease at such events is a ‘quarantine’ applicable to Plaintiff’s son and others who would attend such events,” the case reads.

After the plaintiff’s son’s camp was canceled, she was reimbursed by the camp operator $6,000 of the amount she paid with no indication that the camp can or will provide any further reimbursement, the suit says. Although the plaintiff submitted a claim to the defendant under her policy, United States Fire Insurance notified her on July 31, 2020 that her claim was deemed not payable.

“No formal reason for denial was provided,” the complaint says.

The plaintiff looks to represent anyone in the U.S. who, prior to March 1, 2020, purchased travel or trip or event cancellation insurance underwritten by the defendant that referred to “quarantine” as a covered event and was prevented from taking a trip or attending an event due to government orders issued in response to the COVID-19 pandemic and has not been completely reimbursed for amounts paid.

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