One if by land, Two if by Sea: Different Types of Insurance Needed to Protect Against Storms

Although it has been half a decade since the devastation caused by Hurricane Katrina, the dangers Louisiana residents face from both unruly weather and their insurance providers are far from over. A new study released Monday reveals that New Orleans is one of the gulf cities most at risk for hurricane related damage. The study, available here, also reveals that the damage done by Katrina was primarily attributable to storm surges.

A “storm surge” is simply the rise of water caused by a storm. Storm surge damage refers to the harms caused by the flooding that results from this rise of water. This type of damage is distinct from the wind damage that may also be associated with a massive storm. The difference between flood damage and wind damage is important for a few reasons.

Primarily, the difference is important to insurance providers and their willingness to cover a claim in the event of damage to a home or property. Oftentimes general home insurance traditionally does not cover flood damage. As a result, separate insurance to protect against flood damage commonly must be retained by a home owner in order to cover storm surge damage. This is important because when a catastrophic storm hits there is no way of knowing what specific aspect of the storm will cause the eventual damage to a property or home. If a homeowner has failed to secure flood insurance they must prove that the damage their home suffered was as a result of wind (and not the storm surge) to recover under their insurance policy.

According to the article, and to the thousands of homeowners in New Orleans who faced similar battles while trying to collect on their claims, this problem is so serious because insurance companies will try to blame water damage on flooding and not the potential wind damage that led to flooding. Insurance companies may even require that homeowners acquire flood insurance before they are given coverage for wind damage in a homeowner’s policy because it is so difficult to distinguish between the two and trials often ensue that are a battle of expert testimonies. Sadly, in the wake of Katrina, many people who had lost their homes found themselves in court with the burden of proving that wind was responsible for the destruction of their house.

Further, it may be nearly impossible to prove what precisely was responsible for a home’s damage. Storm damages often occur so fast that it is extremely difficult to tell which aspect of the weather caused the harm. Also, once the house is destroyed most of the evidence will be lost – should there have been an evacuation of the area and nobody was around to witness the timeline of the damage, it is nearly impossible.

Although some federal judges in Mississippi have ruled that certain Gulf Coast homes were destroyed by wind, there is no way of knowing whether a similar ruling would be handed down in response to a similar disaster. Further, many insurance companies have taken every opportunity to delay payment to their clients when storms hit. For example, many victims of 2008’s Hurricane Rita are still awaiting their day in court as their insurance company refuses to pay for their property losses.

The article cited above lists the 70005 and 70003 areas of Metairie as the 14th and 15th cities most in danger of suffering extreme damage from storm surges. The article also says that both areas could suffer over $2 billion in damages each. With insurance companies looking at a bill of over $4 billion it is reasonable to expect, as they have done in the past, that they will do whatever it takes to reduce the money they must pay out to homeowners. These companies may delay payments for years or they may seek to target those without flood insurance.

What does this all mean to you? First, it is necessary that all Louisiana residents prepare themselves as best as possible for any major weather events. These precautions include the need to protect themselves, their property, and their loved ones in the legal system. In additional to the physical dangers presented by the storm, Louisiana residents are also threatened by the legal maneuvering of insurance companies. It is an unfortunate reality that getting the coverage necessary to protect your home or property is not always enough to get the claim you deserve.

If your insurance company attempts to withhold the money you are owed, you will need a competent attorney to recover what is rightfully yours. If your insurance company attempts to argue that only storm surges, and not wind, are responsible for your home’s damage, you will need a competent attorney to set the record straight.