somebody explain to me...

[Flasch186]

how can a person have flood insurance, pay the premium, think that they are covered and then the company says that theyre not going to cover flood damage from a hurricane? Shouldnt that be illegal?

[rkmsuf]

only regular floods count

[gottimd]

reminds me of the time I bought cloud insurance.

[Flasch186]

so if a hurricane hits, causes "rising waters" that is NOT considered flooding? Yet that also would not be covered under Hurricane damage? So its impossible to recoup damages or protect fromt his?

[Subby]

"think they are covered"

KNOW YOU ARE COVERED, BITCH!!!!

[Ksyrup]

This argument, or variations on it, has been going on for years. Before Florida started the quasi-public Citizens Property Insurance Corporation a few years back to be the state's insurer of last resort for all homeowners who couldn't get insurance through the voluntary market, the state had both a P&C JUA for the underlying homeowners coverage, and a Windstorm Pool for the wind portion of their coverage. So, people would have to get coverage with both in order to have "full" coverage.

Problem was, though, that both entities would claim that damage caused by "wind-driven rain" was the other guy's problem. On one hand, it was caused by the wind, so it should be covered by the wind policy. On the other hand, the damage was actually caused by the water, not the wind, so it was the underlying policy that covered it. People actually got screwed out of coverage on this basis. If your house was totally destroyed, you were OK; however, if rain seeped in through blown out windows or doors, then the question arose. It was ridiculous.

They ended up combining the Windstorm Pool and JUA into Citizens, so that there would not be this kind of gap in coverage. But issues like that still happen in other areas of insurance. Not sure without more detail is that's what is happening here, but I bet it is.


EDIT: to note that the Windstorm coverage could also be pruchased in conjunction with a homeowner's policy from a regular insurance, but "X-Wind." So, people near the coast would have homeowner's coverage with State Farm and a Wind policy from the Windpool and both would deny coverage for damage resulting from "wind-driven" rain. So, thbis problem wasn't just limited to the state-run JUA.

[SnDvls]

how can a person have flood insurance, pay the premium, think that they are covered and then the company says that theyre not going to cover flood damage from a hurricane? Shouldnt that be illegal?

Is it through your home owner's policy or through the federal gov't.

You may have 2 policies. one for flood (through the gov't) and one on your house.

[sterlingice]

It's essentially because insurance is about the most crooked business out there.

What else do you expect from a business who hires lawyers to see if it would cost less to hire the lawyers and take it to court than to pay out.

SI

[Buzzbee]

The policy probably had some exclusions for natural disasters or acts of God. A heavy rain passing through causing the creek to rise probably wouldn't be considered a natural disaster or act of God. A category 4 hurricane causing levees to break and thousands of homes to be flooded probably would.

Just my guess.

[HomerJSimpson]

It's essentially because insurance is about the most crooked business out there.

What else do you expect from a business who hires lawyers to see if it would cost less to hire the lawyers and take it to court than to pay out.

SI


Yup.

[Ksyrup]

They pay those lawyers for shit, too. I do regulatory work and get paid well; insurance defense pays lousy.

[digamma]

What else do you expect from a business who hires lawyers to see if it would cost less to hire the lawyers and take it to court than to pay out.

SI
While insurance companies certainly hire more than their fare share of in-house lawyers, pretty much every decent sized company has a legal department that does risk/cost evaluations for potential or threatened legal claims.

[MrBigglesworth]

only regular floods count
What's a "regular flood"? When water decides on it's own to jump the riverbank?

If it is spelled out in the policy that there is no flood protections for "natural disasters", then the person is stupid for getting it. It would be like getting earthquake insurance that didn't pay out for anything having to do with "seismic anomolies".

[rkmsuf]

I have no idea what a regular flood is. Nobody does...it's perfect insurance speak.

[sterlingice]

What's a "regular flood"? When water decides on it's own to jump the riverbank?

If it is spelled out in the policy that there is no flood protections for "natural disasters", then the person is stupid for getting it. It would be like getting earthquake insurance that didn't pay out for anything having to do with "seismic anomolies". And I'm sure that the homeowner was informed of this paragraph on page 32b in 6pt font.

SI

[stevew]

I thought the issue was that people had paid for flood insurance cuased by a natural disaster/act of god, whereas the insurance companies were claiming the flood was not caused by the storm, but rather by the levee breaking. Which isnt their liability.

[I. J. Reilly]

The policy probably had some exclusions for natural disasters or acts of God. A heavy rain passing through causing the creek to rise probably wouldn't be considered a natural disaster or act of God. A category 4 hurricane causing levees to break and thousands of homes to be flooded probably would.

Just my guess.
So the insurance industries stance is that God handles the big stuff, but leaves the run of the mill stuff to a middle manager type?
I can see where that might take several lawyers to defend in court.

[Arctus]

This argument, or variations on it, has been going on for years. Before Florida started the quasi-public Citizens Property Insurance Corporation a few years back to be the state's insurer of last resort for all homeowners who couldn't get insurance through the voluntary market, the state had both a P&C JUA for the underlying homeowners coverage, and a Windstorm Pool for the wind portion of their coverage. So, people would have to get coverage with both in order to have "full" coverage.

Problem was, though, that both entities would claim that damage caused by "wind-driven rain" was the other guy's problem. On one hand, it was caused by the wind, so it should be covered by the wind policy. On the other hand, the damage was actually caused by the water, not the wind, so it was the underlying policy that covered it. People actually got screwed out of coverage on this basis. If your house was totally destroyed, you were OK; however, if rain seeped in through blown out windows or doors, then the question arose. It was ridiculous.

They ended up combining the Windstorm Pool and JUA into Citizens, so that there would not be this kind of gap in coverage. But issues like that still happen in other areas of insurance. Not sure without more detail is that's what is happening here, but I bet it is.


EDIT: to note that the Windstorm coverage could also be pruchased in conjunction with a homeowner's policy from a regular insurance, but "X-Wind." So, people near the coast would have homeowner's coverage with State Farm and a Wind policy from the Windpool and both would deny coverage for damage resulting from "wind-driven" rain. So, thbis problem wasn't just limited to the state-run JUA.

Ksyrup hit the nail on the head. I've done consultant work for FEMA before, and FEMA relief follows the same principles as this insurance issue. In 2001 Tropical Storm Alison (in Houston) was initially declared a flood disaster. This meant that only water damage caused by rising waters was eligible for relief. Water or other damages caused by high winds, or wind driven rain was not eligible for relief. Until FEMA later redefined the disaster to specifically include wind driven rain I was unable to even write a report on numerous state and municipal buildings that had extensive water damage, but no "flood" damage.