A question about Mississippi homeowner's insurance

[hedgehog]

There's a big lawsuit going to trial in Mississippi to determine whether the insurance companies will have to pay up for the flood damage from Katrina. My homeowner's policy in New York explicitly states in half a dozen places that water damage from a flood is not covered even if the water is wind driven. There is protection against wind damage, but the terms tornado or hurricane do not appear. I have a rider to protect against earthquake damage(New York is in an earthquake zone, believe it or not) and that rider explicitly excludes damage from a flood or tidal wave associated with an earthquake! My policy even recommends in plain language that should you want protection against flood damage, you should purchase a flood protection policy. Just what was written in the homeowners' policies in Mississippi that led people to believe that they had coverage against a flood? Do these policies specifically mention hurricane damage or do they differentiate wind damage from flood damage like mine does?

[nosillies]

1. That's why there's a lawsuit...it's confusing and debatable.

If the wind rips the roof off your house, and it happens to be raining, the rain will get in your house and damage everything. Sure that's water damage, but it's water damage that would have never happened if it weren't for wind, which is covered. Flood insurance won't cover this. But many homeowner's policies are trying to deny this also.

From the www.floodsmart.gov site:

Is flood damage from wind-driven rain covered?
No. When rain enters through a wind-damaged window or door, or comes through a hole in a wall or roof, the NFIP considers the resulting puddles and damage to be windstorm-related, not flood-related.

Flood insurance covers devastation caused by storm surge, wave wash, tidal waves or the overflow of any body of water over normally dry land areas. Although flood insurance specifically excludes wind and hail damage, the good news is that most homeowners insurance provide such coverage.

Emphasis mine

It gets really hard to prove if all that water damage was from a flood or from rain pouring in your uncovered house.

[pitohui]

2. this is why we have a court of law

it is claimed that the homes in question were destroyed FIRST by the leading edge of the storm (wind) before the storm surge washed them away

as in many areas of coastal mississippi no one could survive to give an eye witness account, it will have be decided by science and by jury

it is quite likely that many of the homes WERE first destroyed several hours before the storm surge and in those cases the homeowner's insurance will have to pay

example -- a friend's home was destroyed in lakeview, new orleans, where many were killed by drowning but where it was physically possible for some people to survive, it is known that his house was FIRST crushed by a tree and THEN subsequently flooded when the 17th street canal broke

it took time but in my friend's case he did get a partial settlement from his homeowner's insurance for the tree fall, in addition to the money he received from the flood insurance program

i have seen areas of mississippi where even the slabs did not survive, much less eyewitnesses, so it must go to court

[hedgehog]

3. That makes sense

Note that there was a partial settlement for the damage form the tree and a separate payment from a different policy for the flood damage.

My question was motivated by shots of houses with a clear high water mark from flooding and a homeowner claiming that he had hurricane coverage. There is no question in these cases that the damage is from a flood. The question is whether the insurance policy covers a flood caused by the hurricane. Since my homeowner's policy only mentions wind damage, not hurricane damage, I'm wondering if policies are worded differently in other states.

[pitohui]

4. i have not seen the photos in question

in the cases i'm aware where they have lawsuits going such as trent lott's home, nothing survived except a slab or even the slab was broken up, so it is a timing issue

similar to a probate dispute, if i die and my husband dies in the same accident, a judge or jury may have to determine from expert testimony which of us died first, because if i inherit from my husband and then die the money would go to a different heir than if it happened the other way round

if the damage is INDISPUTABLY flood damage, the plaintiffs are not going to get any settlement from their homeowner's insurance unless they can prove other fraud -- some are saying that their insurers told them wrongly that they did not need separate flood insurance and i believe them because i was told the same thing -- eventually i learned the truth and did buy separate flood insurance but i am aware that wrong information was FREQUENTLY handed out in ther 1990s

[hedgehog]

5. The real question is fraud.

As I said, my policy states in a big separate paragraph that if I need flood insurance, I should buy flood insurance. Is the wording different in other states or not? Does anyone know? It's possible that the wording on my policy is a result of one of those New York State rules and regulations that big business is always complaining about.

[nosillies]

6. Mine's from FL

It says:

"You may also need to consider the purchase of flood insurance from the national flood insurance program. Without this coverage, you may have uncovered losses."

Note the "mays" in there. I think there was a pattern of insurance agents telling folks who read this "hey, don't worry about it, you're covered enough, you're not in a flood plain." Now, should we ever take anyone's word that easily? No. Do we all do it pretty much every day? Yes. Try proving some of this in court, though.

[hedgehog]

8. I vaguely recall Metropolitan losing a big case some years back

It was proven that their agents had a pattern of lying to people by exaggerating the benefits of a long term annuity if I recall properly. If the wording on these policies was fuzzy enough and if the agents are shown to have deliberately mislead people, then there's a case here.

[pitohui]

7. i bet you bought your policy relatively recently

in the late 1980s and early 1990s apparently there were some FBI prosecutions, for fraud, of insurance agents selling flood insurance to people who didn't need it

i bought my house in the early 90s, i was told SPECIFICALLY i did not need it

my neighbor was told, in even stronger language, that it would be the criminal offense of FRAUD to sell her flood insurance, and she had to seek out several agents before she found one willing to sell her flood insurance even though we live in Zone C

her insistence saved her house, as our street flooded for the first time in the flood of 1995 and her home sustained a huge amount of damage

it is now easy for anyone here to buy flood insurance and as we are still Zone C, it is still quite cheap

the issue is that mississippi and louisiana are relatively immobile societies, w. many people who have been in their homes for many years, even decades, and they were given information during an earlier era

since the late 1990s, the nat'l flood insurance program has taken out ads and gotten insurers to place the language in the policies that you mention

but many of these people may have first purchased their policy in, say, 1989 when no such language existed and the insurance agents were too afraid to "oversell" insurance because of the prosecutions

we forget how much the world changes in just 20 years

despite all these barriers, louisiana had the highest per capita participation in the nat'l flood insurance program of any state, so it is not like we were all just sitting on our thumbs around here, but the reality is that you canNOT live your life assuming that every expert is a liar or an incompetent, if your bank (who views your house as collateral for money) thinks you don't need flood insurance and your insurance agent who stands to make money by selling you a policy doesn't, then why would you necessarily buy it unless you are butt-headed or psychic like my neighbor? i finally bought it because of my neighbor's experience, while all the "experts" were saying that it was money flung down the toilet

[hedgehog]

9. Our policy goes back to about 1988 or thereabouts.

My husband is a country boy who checked all the local maps before we bought our place. He's seen what a quiet creek can turn into when there's a heavy rain!