The Law of California Applies to an Insurance Policy Insuring Tennessee Property?

Practitioners should be aware that Tennessee courts generally apply the law of the state where an insurance policy was issued and delivered if there is no enforceable choice of law clause in the policy.  Gov't. Employees Ins. Co. v. Bloodworth, 2007 Tenn. App. LEXIS 404 (Tenn. Ct. App. 2007).  So, for example, if a policy on a property in Nashville is issued and delivered to the owner at his home in California, the law of California would generally apply.  However, the Bloodworth case cited above  noted an exception that provides the an insurance policy is governed by the law of the principal location of the insured risk unless some other state has a more signficant relationship..

But what happens when there is a package policy that is delivered in California but covers properties in various states across the county?  That's when it gets hairy, and there is authority going both ways.  The best answer is probably found inThe Restatement (Second) of Conflicts, 193 cmt. f, which indicates that the court should treat such a case as if it involves multiple policies, each insuring its own individual risk.  So if a house is located in state X were damaged by fire, then the law of State X would apply under this analysis. 

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