Court Sides With Insurers on Flood Damage in Louisiana

[flashl]

Source: NY Times

An insurance company is not obligated to pay for water damage from the failure of New Orleans area levees after Hurricane Katrina, Louisiana’s highest court ruled in a case that could affect thousands of homeowners. In a major victory for insurers, the Louisiana Supreme Court reversed a state appeals court decision that favored a New Orleans property owner, Joseph Sher, in his suit against the Lafayette Insurance Company. In November, the Fourth Circuit Court of Appeal concluded that Lafayette’s homeowner policy failed to exclude all forms of flooding because its language was ambiguous. But the State Supreme Court disagreed, and said Lafayette was entitled to limit its liability for damage from a levee breach. John W. Houghtaling, a lawyer who represented the state when the Fourth Circuit heard the case, said the ruling had “very troubling” implications for the Louisiana insurance market and dealt a blow to thousands of homeowners devastated by the August 2005 hurricane. Lafayette and other insurers say their policies cover damage from wind but not flooding, including water from a levee breach.

NY Times

Read more: http://www.nytimes.com/2008/04/09/us/nationalspecial/09brfs-COURTSIDESWI_BRF.html?_r=1&ref=us&oref=slogin

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If we are approaching the point where there is no risk for the insurers to pay claims, why pay for insurance?

[flor de jasmim]

1. Appalling.

[saigon68]

12. SO what else could we expect?

The courts go out of their way to protect the rich

[Tesha]

14. And sometimes they just enforce binding contracts. (NT)

[xchrom]

2. sigh. -- of course.

corporate assault on average american citizens continues.

[islandmkl]

3. best laws money can buy....

you are supposed to just pay for insurance...THAT'S ALL...

send in your money, don't miss payments, and NOTHING ELSE...

"...coverage? claims? what the f*** are you talking about?"

[AlphaCentauri]

11. insurance are just slut machines

[TreasonousBastard]

4. Bullshit! Flood is excluded, and has been for years...

in homeowners policies. Just like war, nuclear, and arson for profit are exluded. Flood insurance is available, although often at a huge price, and any insurance agent should have advised the clients about it. And all sorts of big, glossy, announcements about coverage were in the policyholders' packets.

Everyone knows flood was exluded, but don't let that stop a lawsuit trying to chisel some money out of those big, fat, insurance companies.

It's terrible what happened, but don't blame the insurance companies for doing exactly what they promised to do-- pay storm claims but not flood claims.

[nealmhughes]

7. The homeowners on the Gulf Coast are arguing that it was not flood per se.

They argue that a flood is when a large amount of rain over runs rivers and streams downtstream which then results in damage. This was not the case in Katrina. The rain had nothing to do with the water: the cause was the water in the Gulf itself being pushed out of Lake Bourne and into Pontchatrain and then overwhelming the levees and flood walls.

The damage was from water, but it was not from a source of associated with flooding traditionally, it was from the wind and the water was brackish or salt, not fresh water -- not even fresh water mixed with salt from a tidal estuary, but ocean and brackish water from the Gulf as its ultimate source.

[TreasonousBastard]

10. They can argue anything they want, but...

that doesn't make it true.

Who said "flooding" doesn't mean salt water intrusion? What's the law on beachfront property damaged by wave action?

Truth is that seawater storm surges are, and always have been, excluded, as is damage from any dam, dike, or levee breach. More to the point in these cases is the allegation that some companies tried to refuse ALL claims based on the flood exclusion-- clearly trying to avoid liability.

So, we gots insurance companies trying to chisel on claims and policyholders trying to chisel on coverage. The only winners are the lawyers.

[KoKo]

17. So....the only recourse is to sue the Govt. Army Corp of Engineers for failing

to repair the levee's which caused the flooding. In a way I can understand the Insurers point on this that it wasn't their responsibility to pay for failed actions of the Government Levee Builders...but it's now time for the Government to make good on these people's claims. If Govt. could bail out Bear Sterns and CitiBank then they need to give the folks in NO's what they lost.

[pitohui]

19. well there is at least one such lawsuit going forward

i know someone who was hired as an attorney to work on that lawsuit, but honestly, if it were me, i wouldn't count on seeing any $$$ from it in my lifetime

there are people from exxon valdez who still haven't collected for what they loss on their fishing leases from the oil spill in the 1980s! trying to sue a large powerful entity, it's likely that the fight will go on for years until any $$$ received will be too late to help the victims, it will only serve to enrich attorneys

if you expect justice in america, you're going to be disappointed, is about what i've learned in this life

very sad

[TreasonousBastard]

24. Yeah, but perhaps the best thing is to put...

collecting cash on the back burner and work on putting their lives back together. A quick look through history shows that responsible parties rarely pay for what they did, and hanging your future on waiting for them to pay is simply not the best way to go.

"Victims" cry over the past. "Survivors" deal with the future. If you are lucky enough to have that choice, go for it.

[lastliberalintexas]

26. Incredibly ignorant and thoughless post

While I agree with your analysis vis a vis the flood coverage and its exclusion from standard homeowners insurance, I must say it's obvious that you have never been devastated by such a storm. A mere month after Katrina hit the Delta, Rita hit SE Texas and SW Louisiana. We had trees through our roof, tens of thousands in damage- and thankfully had both homeowners and flood insurance and were covered regardless.

And yet, even still, we had to fight the insurance company to get sufficient funds to repair our home, had to find temporary housing for 5 and 1/2 months and almost divorced from the stress. AND WE WERE SOME OF THE LUCKY ONES.

There are still people in this area who are still fighting insurance companies for money even though the vast majority of claims from Rita should be covered since the most damage here was from wind claims. Yet people still don't have money, have been evicted from FEMA and other temp housing, don't have extra money lying around for repairs. I'm sure they'd love to put their lives back together. Unfortunately it isn't as easy as you seem to want to pretend.

[TreasonousBastard]

28. Three years ago I lost everything...

I owned and was unemployed and homeless. I lost my car and the stuff I had in a storage locker was auctioned off because I couldn't pay for it. And I had no government or insurance payments coming in-- not even unemployment.

I have a hint what people are going through. I know the crushing feeling when your life has just become impossible. I know what it's like to jiggle 35 cents in your pocket and not have the slightest idea how to get more.

I'm talking about fundamental attitudes, though-- very fundamental. I was never a victim, no matter what happened or who did it ot me. Nobody owed me a damned thing, although I was happy to take whatever was offered and occasionally ask for more. When I say nobody owed me anything, I mean just that-- nothing heroic, but just not a damn thing I could hope to cash in on. I forced myself not to regret things, like a lifetime collection of thousands of photographs lost, and to just think about what I could do tomorrow.

I'm still not out of it even though now I'm working two jobs and a gig and have a roof, so save the ignorant and thoughtless condemnations for someone else.

As I was saying, keep fighting for any money actually owed, but getting the money isn't everything. The real fight is for your future, with or without the money. Victims are always looking for the next payoff. Survivors take what they can get and move on.

I've been there, and after it's over, it's not really that bad. Sucks, maybe, but life goes on until you die.

[Ian David]

5. More Loyal Bushies on the bench! Heckuva job, judges! n/t

[rocktivity]

6. No flood coverage because the flooding was cause by the hurricane

and no hurricane coverage because the damage was caused by flooding?

:crazy:
rocknation

[flashl]

9. And, no mention of man-made causes.

Its as if no one watched the levee Congressional hearings.

[L0oniX]

8. Indeed...home owners should purchase flood insurance even if they are not in a flood prone area.

Hurricane/wind damage insurance does not cover damages from water as a result of wind damage to the roof of a home. People in Florida who didn't purchase flood insurance were screwed during the last bout of hurricanes. In some cases the insurance company gave the home owners only a few days to cover up damaged roofs before the company would reject further damage claims claiming that it was negligence on the part of the home owner that cause damages from rain water. Damages from rain water are considered to be flood damage. Snap!

[pitohui]

18. not the same circumstance at all

in louisiana if the water falls from the sky, then it is covered by homeowner's insurance

water rising from the ground (tidal surge, dam or levee breaking, 22 inches of rain in a day, storm drain backs of the street, whatever) --RISING water is considered flood

maybe what you describe is true in florida but it is not true in louisiana as i know from certain personal experience

after katrina, there were areas that were under mandatory evacuation into early december, keeping in mind that the storm occurred in late august, people who could not return to their homes and secure their roofs were not told "too bad so sad you are not covered"

if your roof was torn off and your house rained into, the insurers paid, in my case, in countless of my friends and neighbor's cases, that i know for a certain fact seen and experienced with my own eyes -- it happened to me, it happened to just tons of people i know myself -- no insurer to my knowledge dared argue that if you lost your roof they didn't have to pay to fix your floor when the storm rained in through the missing roof! that's just craziness and if florida allows that, then florida is more fucked up than even i had imagined

insurers did NOT pay if the water came from the broken floodwalls or from the storm surge, which is traditional flooding rising from the ground -- in that case you can't collect from your homeowner's insurance, you instead collect from the national flood insurance program

the problem with the nat'l flood insurance program is that it's a gov't program designed to stop people from being wiped out by flood, but it doesn't make them whole, because coverage is limited to $250,000 and even in louisiana, these days, a modest home can be worth quite a bit more than that -- whereas homeowner's insurance you can buy as much as you need to cover the full value of your home -- homeowner's insurance is therefore a better place to collect from if you quality

unfortunately i think this homeowner's lawsuit was always a longshot at best, i don't agree w. their attorneys that there was any ambiguity in their coverage, but you can't blame a person for trying when they've lost everything

[OneBlueSky]

13. when it's the people against the corporation, the people ALWAYS lose . . .

and that, bottom line, is what's wrong with this country . . .

we no longer have government "of the people, by the people, and for the people" . . .

we have government "of the corporation, by the corporation, and (most definitely) for the corporation" . . .

until that changes, nothing else will change -- not war, not healthcare, not food contamination, not the economy, not energy, not anything . . .

[Supersedeas]

15. just remember this ruling when watching all the smiling Insur. Co. ads on TV

[pitohui]

16. homeowner's insurance has never covered flood damage

while i sympathize with these homeowners, homeowner's insurance has never covered damage due to floods -- the language wasn't ambiguous, it was standard, but the homeowners are naturally desperate and looking everywhere for help

i know someone well who has an expensive home insured thru lafayette and it did pay for the damage (extensive) caused by wind

the federal gov't and the army corp of engineers should be the ones to pay for the damage/flooding caused by their negligence, i'm fairly sure that lafayette insurance has never had any control over the actions of the federal gov't nor any ability to stop them from building shitty floodwalls

[flashl]

20. There are insurers who participate in NFIP ...

Flood Insurance

To get flood insurance that is backed by the NFIP your community must participate in their program. If your community does not participate, contact your local government officials to see what can be done.

Flood insurance is available through almost 200 companies, including:

* Allstate
* American Family
* First American
* Prudential
* State Farm

[pitohui]

22. to clarify a little bit

the national flood insurance program is a gov't program, it is not a private program, yes, if you ask, the company that sells you your homeowner's insurance will handle the paperwork for you and help you thru the steps to get and keep flood insurance but it's separate from your homeowner's insurance

if you are not getting two different bills and policies, one for your homeowner's, one from the national flood insurance program, don't assume you have flood insurance

i recommend everyone to call and find out today if they have any doubts, spring flood season is here and soon it will again be hurricane season

[darue]

21. that's fine, all the homeowners should be sueing the Army Corp

it's the Corp's fault the levee's failed, and that is already 100% proven.

[samsingh]

23. a republican nominee no doubt

[Acadia Blue]

25. We are on our own folks.

[PetraPooh]

27. So does this mean they should all file suit against Louisiana for not maintaining the levees?

[DCKit]

29. I've heard complaints about the insurance industry for years...

had some minor issues of my own, then saw how the insurers were weaseling out of paying of damages of various kinds, under-paying claims, canceling policies of "problem" clients and dramatically raising rates for no apparent reason. Then, when a friend couldn't get their insurance to help negotiate with a neighbors company to pay for damages that were clearly the neighbors responsibility, I canceled my policy. Of course anyone with a mortgage can't do that, but once enough people realize they're paying for protection they don't have, it's going to get rough for the insurers.