Florida Weather Damage. Are losses covered by insurance?

The photos and videos we are seeing in Florida as a result of Hurricane Ike, are disheartening.  I watched Greg Kelly the other night bring a guest on his show who was a congressman representing the Fort Myers area.  He said that, as a result of previous hurricanes, the State of Florida had improved and strengthened its building codes but no building codes ever anticipated the devastation caused by flooding. 

Are such losses covered by insurance?  I have adjusted commercial claims that include amounts available for flooding.  As an example, I adjusted a claim with a seven million dollar policy limit, yet there was only $50,000 allocated for flooding.  It isn’t much but, unless a policy indicates the amount is per location on a multiple building commercial policy, that is all that is available for flood. 

Homeowners insurance policies are not that generous.  Most homeowner policies provide nothing for flooding or water damage. Some policies, however, do have a separate policy included with theirs that insures against flood by the National Flood Insurance Program (FEMA).  That is another reason to view your policy and know what is in it. But, here is a twist:  if the water damage is accompanied by another peril, such as wind, there will be coverage.  Here is how that works:  If wind rips off a roof and water floods the home, there will be insurance coverage BUT THE WIND HAS TO GET THERE BEFORE THE WATER.  Insurance Companies will retain engineers to determine if it was water or wind causing damage FIRST.  If it was water first, I am sorry to tell you there is very little hope I can give you.  If an engineer comes to your home or business, ask him or her for their opinion ON THE SPOT.  State Farm got in trouble after Hurricane Katrina for faking engineering reports showing water got there first.  As a matter of fact, just last month, State Farm had to pay $ 100 million for those false Katrina claims.  State Farm’s actions were first discovered  by an insurance consumer who got an engineer to disclose to her that it was indeed, and that had destroyed her home allowing water to enter. (AP News 2022). 

While water damage is excluded in most insurance policies, many insurance policies do cover for the loss of frozen items in a refrigerator or freezer when electrical power is lost.  You will want to check your policy for this or ask your agent if such a provision is in your insurance policy.  Further, even though water damage is an exclusion in insurance policies, this is not always the case.  I have seen some older Foremost policies that provided for flood damage.  Always review your policy thoroughly and, if you are uncertain as to what is covered, get someone to read it to you.  You may be surprised to learn that, ”in a majority of the courts that have been called on to interpret an insurance policy, the person seeking insurance must read the insurance contract or, at the very least, have a lawyer or professional insurance read, understand, and explain the policy to the person acquiring the insurance.” (Zalma, 2020).     

Brown – O’Haver professionals can assist in reviewing your policy. 

References 

State farm subsidiary to pay $100m for false katrina claims. (2022, August 24). AP NEWS. https://apnews.com/article/lawsuits-mississippi-hurricanes-legal-proceedings-d8ca251ec9f6e6ead832c7b6577bd9a3 

Zalma, B. (2020, January). Insured’s obligation to read the insurance policy. International risk manager institute. https://www.irmi.com/articles/expert-commentary/insureds-obligation-to-read-the-insurance-policy