Do not think that just because you have homeowners insurance, hurricane damage is covered. That question is anything but simple.
Typical homeowner policies do not cover flooding, but do cover damage from wind, flying debris, fire, lightning, hale, and more. But these coverages can be complicated by what is called the anti-concurrent causation clause. These clauses generally state that when a covered peril like wind combines with an excluded peril, like flooding, there is no coverage for the resulting damage. That, unfortunately, is exactly what tends to happen in hurricanes. Anti-concurrent causation clauses came into great controversy after Hurricane Katrina. As property insurance laws are made at the state level, states have taken varying approaches. Some states ban them; some limit them; and some allow them to take their full effect. Some states have addressed the issue by court-made law, others by legislatures.
If you live in a high-risk flood area and bought your home with a mortgage backed by the federal government, you should have flood insurance through the National Flood Insurance Program (which is often sold through private carriers). The NFIP, however, provides low maximum limits, often what is below what is actually necessary to rebuild, especially considering the cost and availability of labor in post-hurricane areas. Whether you live in a high-risk zone is, unfortunately, determined before the hurricane hits, not after. Recently, hurricanes have had a tendency to hit in what were previously not designated high-risk zones. And if you do not have a flood policy now, you will not have time buy one last minute – they come with a waiting period to prevent being overloaded with new claims due to people buying insurance when they know a hurricane is coming.
Even if you have the insurance, there are other barriers that can frustrate the claims process. Insurance companies typically do not staff enough handlers and adjusters to handle the number of claims that come in after hurricanes. Although they often attempt to round up adjusters from other locations, you may still find yourself with an unreachable and slow moving adjuster. You may also find yourself being propositioned by those seeking to take advantage of your loss, such as unlicensed public adjusters and contractors.
If you were in the path of Harvey, or are in the path of Irma, there is little more tragic than losing your home, and little more frustrating than finding out your insurance does not cover the loss. It is important to have an idea what to expect beforehand, so you can plan to spend the proper time dealing with likely complications with your insurance claim, and can locate resources that can assist.
Ivo Labar and Dan Veroff are trial attorneys at Kerr & Wagstaffe LLP specializing in insurance policyholder rights. To learn more about the attorneys and their insurance practice, please explore the links at the top of this page.