A reality of living on the Gulf Coast is the yearly threat of hurricane season. While many bypass us, the threat of a direct hit requires property owners to plan for the future, whose plans typically involves insurance policies. Insurance companies hold an important role in society, they are the ones we turn to when disaster strikes, as they represent themselves in large-scale advertising campaigns. Their job is to assess the chance of any given peril occurring, and determining a value a policyholder should pay for the right to receive a benefit should the covered event occur. Some perils carry such high rates of risk, private insurers are unwilling to write policies regarding that event. With some exceptions, flood and certain water-related events are typically not covered under an all perils insurance policy, or flood is excluded under an all risks policy.
The losses by water flooding are generally underwritten by government insurance policies. The federal government underwrites these policies through the National Flood Insurance Program (NFIP), now FEMA, with the assistance of the private insurance companies who may also write the policy on behalf of the federal government, through the “write your own” or WYO program. The NFIP is a subsidized government program designed to “alleviate the economic hardships caused by unforeseen flood disasters.” Powers v. United States, 996 F.2d 1121, 1126 (11th Cir. 1993). When a loss is sustained by flooding, the adjuster for FEMA or the WYO carrier assesses the loss, but the federal government ultimately pays the loss.
Hurricanes contain at least two meteorological forces, high speed winds and water. Therefore, the losses are typically attributed to wind, water, or a combination of the two. Wind is typically covered under a standard Homeowners Policy or Commercial Policy on a business building, so when the event occurs, the private insurance companies and government are responsible for paying for the loss, as dictated by the facts. Initially courts decided the allocation between policies by applying the efficient proximate cause doctrine, which requires the loss to be attributed in percentages to each event, assigning to the homeowners’ policy a percentage for the covered loss, and recognizing exclusions for the non-covered loss. However, anti-concurrent causation clauses were developed by insurers specifically in response to court decisions that apply the efficient proximate cause doctrine to allow coverage for concurrently caused perils. See, 7 Couch on Insurance § 101:57; Preferred Mut. Ins. Co. v. Meggison, 53 F. Supp. 2d 139, 142 (D. Mass. 1999); Garvey v. State Farm Fire & Cas. Co., 48 Cal. 3d 395, 257 Cal. Rptr. 292, 770 P.2d 704, 710, n. 6 (1989). Anti-concurrent causation clauses state that if an event is not covered, or a specifically excluded risk occurs at the same time as a covered peril or loss, then the insurance company is not responsible for paying the claim. An uncovered peril/loss which occurs in any sequence relative to the covered peril/loss is defined as a concurrent cause.
Obviously, this issue is encountered after a hurricane strikes- i.e., the wind versus water damages debate. Private insurance companies are businesses, and like many other businesses, they are motivated by profit. If it is determined that a loss was strictly caused by the water element of the hurricane, then the homeowners’ or business insurance company may not have to pay under the homeowners or business policy, reducing claims and enhancing profits. Hopefully there is flood coverage, and the federal government pays under the flood insurance policy written through NFIP/FEMA because flood coverage does not depend on private insurance interests; flood coverage is underwritten by the government. However, where a portion of the occurrence is attributed to wind damage, the coverages- named perils or all risks- and the anti-concurrent causation language or other exclusions are interpreted in light of known facts by a company with a profit motive. The policyholder who procures insurance through both NFIP flood insurance and a homeowners’ or commercial insurance policy who attempts to recover all of his losses after a natural disaster, like a hurricane, may find it next to impossible for them recover his losses, without an experienced lawyer and experts. At times like these, an attorney with experience in property and casualty/flood insurance litigation is an invaluable tool to obtain maximum recovery.
For instance, loss of use is a term of art generally not clear under the policy. This coverage requires an experienced lawyer to fully recover. A very important ancillary coverage for businesses under their policies is business interruption coverage. Accounting expertise and economist expertise are required to properly analyze and pursue claims under business interruption coverage.
Thornhill Law Firm has the experience and experts needed to handle claims for property damages, loss of use, business interruption and related coverages. Thornhill Law Firm is dedicated to protecting the rights of the homeowner and business to receive their insurance benefits at a time of loss. In all of these cases, time is of the essence, so acting quickly to timely file the claim, with proper proof of loss documentation is critical. That is where the experience of Thornhill & Collings and the experts we engage become most helpful to claimants. To learn more about representation by Thornhill Law Firm in the event of a Hurricane Claim, please visit our website at https://www.thornhilllawfirm.com or call us, toll-free, at 1-800-989-2707.