Posted on 08/02/2007 2:24:04 PM PDT by tobyhill
NEW ORLEANS - Hurricane Katrina victims whose homes and businesses were destroyed when floodwaters breached levees in the 2005 storm cannot recover money from their insurance companies for the damages, a federal appeals court ruled Thursday.
The case could affect tens of thousands of rebuilding residents and business owners in Louisiana, Daniel E. Becnel, who represented 21 plaintiffs in the case, said. Insurers could have taken a “multibillion dollar hit” if the ruling had gone against the industry, said David Rossmiller, an insurance attorney and analyst.
“This event was excluded from coverage under the plaintiffs’ insurance policies, and under Louisiana law, we are bound to enforce the unambiguous terms of their insurance contracts as written,” Judge Carolyn King wrote for a three-judge panel of the 5th U.S. Circuit Court of Appeals.
(Excerpt) Read more at msnbc.msn.com ...
What about water damage caused by the Fire Department when putting out a fire?
It’s considered the initial cause, either water or other. In a fire the fire is the initial cause and in a levee breech it’s still water as the initial cause.
Personally if a flood hits my house I’ll need an arc, not flood insurance. (on top of a very tall hill)
A flood plain is not a good place to live.
When building below sea level, unless you are in Death Valley, you take your chances. They should just let this land go back to nature. It’ll happen again.
Standard American approach. Don’t get insurance, then whine when you house gets flooded until people give you money.
It’s pretty clear and well known that homeowners insurance doesn’t cover rising water.
That’s not flood damage. It would be situational and collateral damage to prevent a continued situation of peril resulting in loss of life and property. You’d be covered.
This is especially true when you are surrounded on three sides by large bodies of water.
This is a good thing, the way the court ruled that water damage no mater how it arrived was not covered.
In my personal experience it was covered without any problems. Water being sprayed from a hose is obviously not a flood.
These homes were obviously damaged by flood waters.
If you live in an area that is at risk for flooding, but flood insurance. Don't try and force insurers to pay when the insurance you purchased from them specifically excludes flooding. It is not the insurance company's fault that you chose not to purchase flood insurance, or even if you were unable to afford flood insurance.
It worked for Trent Lott.
We have a couple at our church who are Katrina VICTORIOUS survivors. Super positive people who have made new lives for themselves here in TX after their families had lived in NO for generations.
They say that the people who stayed are in total denial. They blame Bush, God, whites, you name it.
They said NO was a giant bowl just waiting for a few inches of water to take it out. Man thumbing his nose at all logic once again.
Sorry, I must disagree. Was it called “ Flood Katrina” or “Hurricane Katrina”? The wind and water surge of the hurricane breached the levees causing the water damage, the Mississippi River didn’t crest and flood the city. The hurricane was the cause. If high wind, like that from a hurricane, dislodges a tree and damages your house is it tree damage or wind damage? The tree, prior to the wind, was viable just as the levees, prior to the hurricane were viable. Typical instance of insurance companies screwing the little guy again. Hope it doesn’t stand up on appeal.
People like your friends are the kind of folks no one minds helping out.
I am not in any flood plain at all. My only risk is a sewer backup in the basement. The houses in my area were all built with out sump pumps and all the drain tiles and regular sewage are combined in to one system that also handles the drains in the streets. If the pumps for the sewers go out ... Last time we had a big power outage, the big one, from Michigan to New York, the city had generator trucks at all the pumps pretty quickly. I should call my agent and see if I am covered, honestly I have not spoken to him in over 10 years.
This is not some new legal precedence made up for Katrina.
I know a person who's home got hit by a storm surge from a hurricane in Florida. Everything below the high water mark was considered flood damage, damage above the high water mark was covered by regular home owner's insurance.
If the storm surge had completely washed the home away, is would have been considered completely destroyed by a flood and the home owner's insurance wouldn't have covered anything.
That is how it has always worked. That is how flood insurance was explained here in Ohio to me when I bought a house.
You can't parse words after the fact and try and make some company liable for something they never offered coverage for just because you feel sorry for the people who irresponsibly decided not to get flood insurance despite living below sea level.
Floods are always cause by storms. Suggesting that because there was a storm involved that it has to be covered despite an explicit exclusion of flood insurance is pure idiocy.
The wind and water surge of the hurricane breached the levees causing the water damage
That's called a flood.
Flood damage is excluded in homeowner insurance policies. If there is evidence that the damage was cause by a flood, it is excluded from coverage. That is how contract law works. You don't get to try and weasel around it an say it might have been damaged even if the flood waters didn't damage it.
If high wind, like that from a hurricane, dislodges a tree and damages your house is it tree damage or wind damage?
If your policy explicitly excludes "tree" damage, then the damage caused by a tree hitting your house would not be covered despite the fact that the wind blew the tree into your house. You could mitigate your risk by trimming or cutting down trees close to your house, but if your house is surrounded by trees, it would be foolish not to get a "tree" insurance policy to supplement your home owner's policy in that case.
Typical instance of insurance companies screwing the little guy again.
How are the insurance companies screwing "the little guy" by simply only providing the coverage that was paid for?
There is only one provider of flood insurance in the US, and that is the Federal Government. No private companies offer flood insurance on their own, because the Federal Government already subsidizes it so that the premiums are lower than a private company could afford to offer it at.
Private insurance companies flood insurance policies are simply the Federal Government's policies on which the private agents get a commission for selling the policy.
However, insurers are more than happy to make that commission by selling you flood insurance. They aren't hiding it from you. They aren't trying to keep you from getting it so that you lose your home in case of a flood. They make money signing you up for flood insurance.
The problem is that some people try and save some money each month by taking the risk that the flood that only hits their area on average once ever 60 or 100 years won't hit them or won't hit while they are there.
Then when bad luck strikes, they look for someone else to blame, or for someone else to pay for it.
They go after those big, faceless insurance companies. The liberal politicians show up to tell you how you need the government to protect you from the evil corporations that don't have your best interest in mind because they won't give you money to rebuild your home, even though you never paid for insurance against that particular risk.
Hope it doesn’t stand up on appeal.
If this doesn't stand up, you can pretty much kiss private insurance goodbye in flood areas, because it will be perfectly clear that contract law means nothing, and if a disaster occurs the government will step in and steal billions of dollars from private investors in those insurance companies and distribute it to those who didn't insure themselves against those disasters.
Insurance for all those in the area will skyrocket even higher as more insurers flee the region and competition decreases to those few insurance companies willing to risk the courts stepping in and stealing their money.
Insurance will end up getting subsidized by an even larger amount by tax dollars.
We will all get to pay for people to live in high risk areas.
If you want to live in a high risk area, you need to assume the responsibility for that risk, and insure yourself against it. It's part of the cost of owning a home. If you can't afford to insure your home against the risks involved, you can't afford that home, and if bad luck strikes you are likely to lose everything.
That's not the insurance company's fault if they don't cover you against that risk. It's not the government's fault. It's your own fault. The consequences are very harsh, but it is still no one else's fault but your own.
The reason I suggest getting it in writing is because the insurance agent might just think he knows the answer, but might be wrong, so you need proof that he as the representative of the insurance company, told you that you were covered, because years later if something happens, he might not be around, or he might not honestly remember what he told you. Or if he is dishonest, he might lie about what he told you to save his job.
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