Water/Wind Dispute: The Eye of the Insurance Storm
In a hurricane, no one can predict with accuracy whether wind or water or both will damage or destroy a property.
Because the property insurance industry continues to cherry pick portions of the market it wants, home and business owners remain burdened with a patchwork maze of insurance options which often are quite limited and expensive for the 55%of Americans who live within 50 miles of the nation's beautiful coastlines.
As long as the insurance industry is allowed to require home and business owners to purchase separate wind and flood policies from different carriers--some private sector and others public being state and government property insurance policies, the artificial question of whether wind or water caused the property damage will continue to be a property owner's financial nightmare.
The Legal Quagmire In the aftermath of a hurricane, what American property owners know is that they bought all of the insurance coverage available. Faithfully, they paid their premiums, and now it is time for their insurance companies to make good on their end of the contract. They expect to be in good hands, to be treated like the good neighbor they themselves have been, to have their side the insurance company to whom they have been a good customer.
Because of the patchwork nature of property insurance coverage, determining which insurance policy covers which part of the hurricane-caused damage is the legal quagmire in which home and business owners find themselves. This nightmarish quagmire begins and ends with determining the amount of wind versus the amount of flood damage that a hurricane inflicted on a property. America's unsuspecting home and business owners find themselves in unchartered waters. To hear the insurance industry tell the tale, as long as a drop of water came on the property, the amount of wind damage becomes irrelevant. Armed with its hidden concurrent causation clause buried deep inside the multi-page insurance contract, insurance companies wield its powerful weapon against America's trusting home and business owners. With its weapon in hand, the insurance industry implements the four Ps to ensuring obscene profits and bonanza-like CEO bonuses.
1.Pockets the premiums 2. Prevents legitimate claims payouts 3. Pads its profits 4. Passes out big bonuses to its CEOs
Water? Wind? Given this artificial distinction between homeowners policies which cover wind damage and flood insurance policies which cover flood damage, the legal question of responsibility becomes a choice between the following. Does the homeowners insurance company have to prove how much damage was caused by flooding in order to exclude wind coverage?
OR
Does the policyholder (America's home and business owners) have to prove how much damage was caused by wind in order to collect on a wind policy?
Homeowner Insurance Companies Tell Court They "Wouldn't Pay a Dime" . . . Unless Sued!
July 1, 2009
The State Farm Example Instead of attempting to prove how much damage had been caused by flooding in order to justify denial of wind claims, State Farm paid only where it could prove the flooding was not the cause. With that justification, State Farm gave itself all the benefit of the doubt and left its policyholders flapping in the wind. As a result, many coastal residents who had bought all the wind and flood coverage that was available to them, received only payment form their flood policies.
In most cases, the flood insurance policies did not come close to covering the full replacement value of their homes. Residential flood policies are limited by statue to $250,000 for the structure and $100,000 for the contents, with no coverage for additional living expenses or loss of use. Through wrongfully and deliberately denying wind-related claims, State Farm and other insurance companies essentially transferred to the American taxpayers corporate bills for the cost-of-living expenses the companies owed to those policyholders. In other words, the insurance company gave itself an unstated government bailout. With neither the state Department of Insurance nor FEMA required insurance companies to prove how much damage was caused by flooding. State Farm and other companies were free to end and delay claims for wind losses. Meanwhile, companies conspired with adjusting and engineering firms to rig damage assessments. Read more at Evidence of Defrauding the National Flood Insurance Program (NFIP). Since Hurricane Katrina, the insurance industry has shown that it is not willing or able to offer adequate coverage in coastal communities across America. Aside from jacking up premiums or backing out of the market altogether, the insurance industry does not honor its obligation to cover wind-related property damage for which home and business owners pay their premiums faithfully.
