Wind vs Water was a HUGE issue after Katrina. The buck passing was unbelievable. This will make the Camp Leguene issue look minor. Litigation for years to come.

Litigation is looming for home insurers in Florida as cash-strapped, underinsured homeowners—paired with an aggressive plaintiffs’ bar—are expected to turn to the court system to try to force payments for flood damage that the carriers say they aren’t legally obligated to cover.

Fewer than one-third to just over 40% of the Florida homes in the two coastal counties hardest hit by Hurricane Ian are covered by flood policies, although standard homeowners’ policies in the U.S. for decades have excluded flood damage. In some of the inland counties badly flooded by Ian’s torrential rains, only a few out of every 100 homes have flood insurance.

At stake are potentially billions of dollars in proceeds from homeowners’ policies that, if homeowners get their way, could close some of the insurance gap and help people rebuild and repair homes. Insurers say their flooding exclusions are solid and the premiums they charged didn’t bake in responsibility for flooding damage. But determining whether wind or water actually caused the damage isn’t always clear-cut, particularly if just a slab is left.

The stage is set for a potential litigation frenzy akin to the one after Hurricane Katrina devastated parts of Louisiana and Mississippi in 2005, say industry executives, agents and attorneys. Plaintiffs’ lawyers made headway in lower courts, often by challenging restrictive clauses in standard homeowners’ policies dealing with dual wind and flooding damage. They asserted that some wording was ambiguous and should be interpreted in policyholders’ favor.


Hurricane Katrina devastated parts of Louisiana and led to insurance disputes that sometimes took years to resolve.


Ultimately, many insurers prevailed on appeal, but it took years of legal expense, and there were numerous settlements along the way.

The low uptake rate for flood policies “opens the door for immense litigation,” said Barry Gilway, chief executive of Citizens Property Insurance Corp., Florida’s state-run insurer of last resort. “You will have attorneys lined up to take cases in instances when the cause of loss is difficult to determine.”

Randy Maniloff, an insurance-industry lawyer with White and Williams, wrote a note to the firm’s clients last week to alert them to likely lawsuits. “With so much at stake, some of those impacted will see no choice but to turn to the courts in hopes of securing coverage,” Mr. Maniloff said in an interview. “Necessity has long been a driver of creative arguments for insurance coverage.”

Chip Merlin, president of Merlin Law Group in Tampa, Fla., which represents policyholders in conflicts with insurers, said his office already is receiving calls from people who feel their home insurers aren’t treating them fairly. Some say they sought to file a claim but were directed to file with their flood insurer. Mr. Merlin’s stance is that a claim should be filed with both home and flood insurers, to better ensure that damage from both wind and flood is identified and the homeowner can tap into both policies’ proceeds.

“These things often end up in court unfortunately,” Mr. Merlin said. “We’re doomed to go through it again.”



Caught in the middle are homeowners including Ken Dolan in Cape Coral in Lee County, where Ian arrived. The storm blew off the chimney and part of the roof of his ranch house. Water as high as about two feet inside damaged floors, lower sections of walls, furniture and appliances, he said.

His home-insurance policy provides up to $409,000 for the dwelling itself, and $102,000 for personal property. His separate flood policy provides up to $240,000 for the building, but nothing for contents. He said a mold-remediation firm he sought to hire checked with his home insurer, which said it wouldn’t cover the firm’s services if damage was due to rising waters.

“I didn’t realize it was going to be such a challenge, trying to distinguish between the flood and the hurricane damage,” Mr. Dolan said.

Insurers’ adjusters are expected to be looking at such things as marks left by floodwaters on walls and sand on floors to ascertain flooding damage, while assigning responsibility to home insurers for such things as roof replacement and broken upper-story windows.

“You parse out the damage done by wind vs. surge,” said Melissa Burt DeVriese, president of Security First Insurance. “Our adjusters are experienced and can handle ensuring the customer is paid for everything that they are owed under the terms of their policy.”

Especially tricky in Katrina were instances of obliterated properties, known as slab claims. There weren’t wall markings or missing roofs to provide clues. Ian left behind many slabs.

“The house is gone: Did surge wipe it out, or wind?” said Mohsen Rahnama, chief risk modeling officer for catastrophe-modeling firm RMS. He said that estimating the amount that insurers will have to pay out from Ian has been hard to do at this point for a number of reasons, including the role of litigation, as it was with Katrina.


Cars and debris from washed-away homes line a canal in Fort Myers Beach, Fla., in the wake of Hurricane Ian.
PHOTO: REBECCA BLACKWELL/ASSOCIATED PRESS
The biggest seller of flood policies to U.S. homeowners is the federal government’s National Flood Insurance Program, with coverage limits of $350,000 for a dwelling and contents. Given rising building and repair costs, some policyholders with flood policies may resort to suing their home insurers, arguing that their losses were caused at least partly by wind, to tap into bigger potential payouts, said Jake Holehouse, president of HH Insurance in St. Petersburg, Fla.

As with Katrina, some insurers are expected to argue that their policies’ “anti-concurrent causation” clauses exclude payouts for wind damage if it occurred in conjunction with flooding, lawyers said. It is unclear how many of those clauses exist in Florida policies.

Meanwhile, an added complication in Florida is that a small subset of home policies exclude not just flooding but wind damage. So homeowners would need not just a separate flood policy but a wind one, too.



Florida’s plaintiffs’ bar is experienced at suing home insurers over disputed claims. Florida represents about 9% of the nation’s homeowners insurance claims, while accounting for 79% of the nation’s homeowners insurance lawsuits over claims, according to the Florida Office of Insurance Regulation.

The litigation has contributed to double-digit premium-rate increases for home insurance in recent years. Florida’s average annual home-insurance premium of $4,231 is among the nation’s highest, according to projections by trade group Insurance Information Institute.

Robert Hartwig, director of the Center for Risk and Uncertainty Management at the University of South Carolina’s business school, believes Ian-related legal disputes are “unavoidable in a state with a trial bar that is already intimately familiar with the homeowners insurance market.” That said, legal precedents established in the Katrina lawsuits will help to “limit where this litigation can go,” he said.

Write to Leslie Scism at leslie.scism@wsj.com and Arian Campo-Flores at arian.campo-flores@wsj.com

LINK; https://www.wsj.com/articles/i...02?mod=hp_lead_pos11

Hmmm, sounds like a market for storm and flood proof battery powered cameras to record what caused house damage after you’ve evacuated. Kind of like airplane black boxes or dash cams. Seems like a biz opp for someone.

Yep. The insurance companies woud not accept NOAA data that indicated that the wind came first in Katrina and pretty much destroyed the home. The battle took years and ended with a prominent national attorney ending up in prison. But you are right a watertight camera that also recorded wind speed would be helpful.

Cheap weaseling bastards. Folks have been through enough. People pay their premiums month in month out.

Don’t drag your feet while these folks suffer besides you know you are going raise rates to get payback. SOB’s

I’m shocked…SHOCKED that these insurance companies who are all too happy to collect that premium (and God help you if you’re late on that or forget) are now trying to weasel out of payouts.

Doubtful that any of this has happened in SWF on IAN yet, they are still trying to recover bodies and find homes.

The fact is you can buy flood insurance, it's an option on all policies, most folks don't because it's a rare occurrence, and very expensive.

10 homes flooded in our neighborhood, we've never had flood issues, only one person had flood insurance.

State Department of Insurance is very consumer active in Florida against fraud and misrepresentation.

Imagine it's not easy for someone whos lost everything, and didn't buy flood insurance to accept they have to foot the bill for their personal responsibility.

Blaming the carriers is always the game, and you just hire the top civil firm in the area to go for that victims settlements, then, the rest of us get to pay the premium increases..

quote:

Blaming the carriers is always the game, and you just hire the top civil firm in the area to go for that victims settlements, then, the rest of us get to pay the premium increases..

^^^^^^^^^^^^
A lot more complicated than you suggest. Your house was destroyed by a tornado that preceeded the surge and you have no place to live. The Insurance companies have the top NY attorneys and lots of money. The longer the cases go on, the more pressure upon the homeowner to settle. A quick check at that point becomes a solution.

Insurance companies are also experts in finding fraud. Even before Katrina, they had aerial shots of the Coast. Additional damage such as lifting shingles was easily uncovered.

quote:

Originally posted by recoatlift:
Cheap weaseling bastards. Folks have been through enough. People pay their premiums month in month out.

Don’t drag your feet while these folks suffer besides you know you are going raise rates to get payback. SOB’s

no, they didnt pay their premium. my parents had flood insurance during Katrina and always did. My uncle never did and had 12 ft of water in his house. The fed still paid his claim,WHY? In new orleans it was fairly easy to tell between flood and wind. People always want something for nothing.

Flood insurance is required if you have a mortgage and you are in a federal flood plain. If you are NOT in a flood plain you can still buy flood insurance as an option.

quote:

If you are NOT in a flood plain you can still buy flood insurance as an option.

I have flood insurance and am nowhere near a flood plain. I know that my homeowners does not cover flood damage, and you don't need to be in a flood plain to experience a flooding event.

I even have earthquake insurance too. Most people don't know that like flooding, it's not covered by a standard policy.

When we lived in FL, due to having a mortgage and the location of our house, we had homeowner’s insurance, wind insurance and flood insurance. Banks, insurance companies, the State of Florida and the feds are all very vocal about having all three kinds of insurance. People don’t have all three because it about triples what home insurance is in the rest of the country.

quote:

The litigation has contributed to double-digit premium-rate increases for home insurance in recent years. Florida’s average annual home-insurance premium of $4,231 is among the nation’s highest, according to projections by trade group Insurance Information Institute.

One estimate I read was 62 billion in damages. Last census July 2021 there was 10,054,457 housing units. Avg. insurance premium of $4,231 equates to $42,540,407,567. They have the money.

USAA several years ago said in Iowa they offered three flood related insurance options. If house plumbing sources like a broken pipe floods your home, it's included with home policies. If your sump pump overflows and causes flooding/damage, you need to have paid for the 'sump pump overflow' rider to be covered. Floods from external sources like heavy rain are the third option and one needs to pay for a different rider to be covered for that.

A few years ago heavy rain overwhelmed the storm/sewer system in the city and 80+ homes found their lower level flooded with sewage. I'm not sure if one of those options covers that or not, but similar stories in other cities led to class action law suits against the city involved.

Keep in mind the benevolent lawyers will offer "settlements".

Years ago, like back in 2006-2008, I had bought my first house a few years before and I thought, "You know, we are not near a lake or river, we are not in a flood plain, but I should check into flood insurance because I know it is excluded and it would be an extra piece of mind."

My homeowners insurance at the time was something like $1,000 per year. The quote I got back on flood insurance was $600 per year.

I paused in thought... "Wait a second. The insurance that protects my house against any issue other than flood, against wind, fire, against a tree failing on top of my house, against a car careening off the road into my house, against everything other than a flood is $1,000. And flood only insurance is $600 by itself?"

I passed on flood insurance.

Sad part is we give tons of money to other countries while our place goes downhill.

Throw an object at a window or two from the outside that way the glass ends up inside. Wind damage then claimed by a good adjuster. True story.

This disaster should prove the need to take care of our people before one cent goes overseas. Cut it off. Anyone sending aid to us?

hire a knowledgeable lawyer to negotiate between all insurance aspects. get independent estimate of damage, allow for overage add ons

I know too many people in the Houma area who have been dicked around for the last year and still waiting for checks to pay contractors

Live smack dab in the middle of where Ian hit hardest Cape Coral Lee county, just got power and water back, and now waiting to see how bad the insurance company is going to hit us. Thank God we are alive, but there are so many who lost everything here including their lives