A Tennessee appellate court reversed a judgment for an insured where it found that coverage for property damage due to a flood was limited to a sub-limit because it was located in a "high flood zone," despite the fact that the location was not listed in the policy's "High Flood Zone Locations" endorsement. Opry Mills Mall Ltd. P'ship v. Arch Ins. Co., 2018 WL 576194 (Tenn. Ct. App. Jan. 26, 2018).

The insured owned and operated commercial property which was severely damaged due to flooding which closed the property for multiple years. The property was insured under a global unscheduled insurance policy with a $200 million per occurrence limit, and a $50 million sub-limit for properties in "High Hazard Flood Zones," defined as "all property at a 'location' that is partially or totally situated in an area which at the time of the loss ... has been designated on a Flood Insurance Rate Map to be a Special Flood Hazard Area." The insured sought coverage under the higher $200 million limit for the damage on the basis that the property was not listed as one of the locations in the policy's "High Flood Zone Locations," endorsement which included s16 properties. The insurer tendered payment of the $50 million sub-limit, but denied the higher limit on the basis that the property was located in a High Hazard Flood Zone. It then filed a complaint for declaratory judgment. The trial court found for the insured and entered a judgment for $200 million, which the insurer appealed.

The Tennessee appellate court reversed, finding that the lower $50 million sub-limit applied because the property "was in an area designated as a high hazard flood zone at the time of the loss," pursuant to the policy's limitations. It found that the court relied on language in the endorsement indicating the properties listed were included for purposes of deductibles only, and held that the fact that the property was not listed was not relevant to coverage when considering the limits which were controlling.

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