Damage Caused by Animals, Property Insurance Limitations

The Arizona Court of Appeals has addressed the increasingly common language property insurers use in policies to preclude or limit the coverage for animals or damage caused by animals. The case is Goldberger v. State Farm Fire & Cas. Co., 448 P.3d 302 (Ariz. App. 2019).

The Goldbergers were the owners of a residential rental property with an insurance policy for that property through State Farm Fire and Casualty Company (State Farm). The policy was a rental dwelling policy. The Goldbergers filed a claim for $75,000 worth of coverage after their tenant “allowed” feral cats to “access” the property and cause “accidental damage.” State Farm denied the claim, citing an exclusion in the policy for damage caused by “domestic animals.” The Goldbergers disagreed and sued State Farm alleging breach of contract and insurance bad faith.