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<\/figure><\/div>\n\n\nFewer 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\u2019 policies in the U.S. for decades have excluded flood damage. In some of the inland counties badly flooded by Ian\u2019s torrential rains, only a few out of every 100 homes have flood insurance.<\/p>\n\n\n\n
At stake are potentially billions of dollars in proceeds from homeowners\u2019 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\u2019t bake in responsibility for flooding damage. But determining whether wind or water actually caused the damage isn\u2019t always clear-cut, particularly if just a slab is left.<\/p>\n\n\n\n
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\u2019 lawyers made headway in lower courts, often by challenging restrictive clauses in standard homeowners\u2019 policies dealing with dual wind and flooding damage. They asserted that some wording was ambiguous and should be interpreted in policyholders\u2019 favor.<\/p>\n\n\n\n
Ultimately, many insurers prevailed on appeal, but it took years of legal expense, and there were numerous settlements along the way.<\/p>\n\n\n\n
The low uptake rate for flood policies \u201copens the door for immense litigation,\u201d said Barry Gilway, chief executive of Citizens Property Insurance Corp., Florida\u2019s state-run insurer of last resort. \u201cYou will have attorneys lined up to take cases in instances when the cause of loss is difficult to determine.\u201d<\/p>\n\n\n\n
Randy Maniloff, an insurance-industry lawyer with White and Williams, wrote a note to the firm\u2019s clients last week to alert them to likely lawsuits. \u201cWith so much at stake, some of those impacted will see no choice but to turn to the courts in hopes of securing coverage,\u201d Mr. Maniloff said in an interview. \u201cNecessity has long been a driver of creative arguments for insurance coverage.\u201d<\/p>\n\n\n\n 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\u2019t treating them fairly. Some say they sought to file a claim but were directed to file with their flood insurer. Mr. Merlin\u2019s 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\u2019 proceeds.<\/p>\n\n\n\n \u201cThese things often end up in court unfortunately,\u201d Mr. Merlin said. \u201cWe\u2019re doomed to go through it again.\u201d<\/p>\n\n\n\n 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.<\/p>\n\n\n\n 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\u2019t cover the firm\u2019s services if damage was due to rising waters.<\/p>\n\n\n\n \u201cI didn\u2019t realize it was going to be such a challenge, trying to distinguish between the flood and the hurricane damage,\u201d Mr. Dolan said.<\/p>\n\n\n\n Insurers\u2019 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.<\/p>\n\n\n\n \u201cYou parse out the damage done by wind vs. surge,\u201d said Melissa Burt DeVriese, president of Security First Insurance. \u201cOur adjusters are experienced and can handle ensuring the customer is paid for everything that they are owed under the terms of their policy.\u201d<\/p>\n\n\n\n Especially tricky in Katrina were instances of obliterated properties, known as slab claims. There weren\u2019t wall markings or missing roofs to provide clues. Ian left behind many slabs.<\/p>\n\n\n\n \u201cThe house is gone: Did surge wipe it out, or wind?\u201d 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.<\/p>\n\n\n\n The biggest seller of flood policies to U.S. homeowners is the federal government\u2019s 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.<\/p>\n\n\n\n As with Katrina, some insurers are expected to argue that their policies\u2019 \u201canti-concurrent causation\u201d 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.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n Florida\u2019s plaintiffs\u2019 bar is experienced at suing home insurers over disputed claims. Florida represents about 9% of the nation\u2019s homeowners insurance claims, while accounting for 79% of the nation\u2019s homeowners insurance lawsuits over claims, according to the Florida Office of Insurance Regulation.<\/p>\n\n\n\n The litigation has contributed to double-digit premium-rate increases for home insurance in recent years. Florida\u2019s average annual home-insurance premium of $4,231 is among the nation\u2019s highest, according to projections by trade group Insurance Information Institute.<\/p>\n\n\n\n Robert Hartwig, director of the Center for Risk and Uncertainty Management at the University of South Carolina\u2019s business school, believes Ian-related legal disputes are \u201cunavoidable in a state with a trial bar that is already intimately familiar with the homeowners insurance market.\u201d That said, legal precedents established in the Katrina lawsuits will help to \u201climit where this litigation can go,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":" Written by Leslie Scism, Arian Campo-Flores Litigation is looming for home insurers in Florida as cash-strapped, underinsured homeowners\u2014paired with an aggressive plaintiffs\u2019 bar\u2014are expected to turn to the court system… <\/p>\n","protected":false},"author":8,"featured_media":55540,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57,32],"tags":[1795,1796],"_links":{"self":[{"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/posts\/55538"}],"collection":[{"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/comments?post=55538"}],"version-history":[{"count":2,"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/posts\/55538\/revisions"}],"predecessor-version":[{"id":55542,"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/posts\/55538\/revisions\/55542"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/media\/55540"}],"wp:attachment":[{"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/media?parent=55538"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/categories?post=55538"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thelehighacresgazette.com\/news\/wp-json\/wp\/v2\/tags?post=55538"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/thelehighacresgazette.com\/news\/wp-content\/uploads\/2022\/10\/bb1d54e287925e8aa5abadf7bd6963f4.jpg\")
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