Lott and others paid their premiums, they deserve to get reimbursed and the insurance companies should be prosecuted for fraud.
They didn't pay for flood insurance. That's the point. If they wanted flood insurance they would have had to pay a rider.
I have State Farm and my agent made it quite clear to me that water falling from the sky is covered, water from broken pipes is covered, water from a backed up sewer was covered (although they ammended the policy later to limit that). However, water from or along the ground is not(!) covered and if I want it covered I should buy a separate flood insurance policy.
This is like someone buying liability only auto coverage and then wanting to force the insurance company to pay for his car's damage in a wreck.
If the contract doesn't mean what it says, who can guarantee that next time there is a disaster the insurance companies won't get out and bribe Congress to retroactively change the contracts to say that wind damage isn't covered either.
The insurance companies have a point. There is a difference between a flood and a storm surge.
The real issue is what the insurance companies meant BEFORE the storm hit when they sold flood insurance. If they can prove that they did not include "storm surge" as flooding, then they shouldn't have to pay.
That gets us to "hurrican coverage." If they sold hurrican coverage and specifically exempted "storm surge" from THAT, then they should not have to cover it.
Do they offer "storm surge" insurance? I'd say that NOT selling such coverage would indicate they had not considered it separate from either hurricane or flood insurance.
Most insurance policies specifically exclude damage due to floods. Owners can also buy flood insurance, but for considerably higher cost. Where is the fraud?
Lott was paid in full since he had National Flood Insurance. He's trying to double-dip.