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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: patron_anejo_por_favor who wrote (40674)9/1/2005 10:34:19 PM
From: orkrious  Read Replies (3) of 110194
 
Homeowner's doesn't cover flood damage, and they owned 'em free and clear so they couldn't get flood coverage...

I used to be in the insurance business. I am not so sure many of these losses won't be covered by their homeowners or rental dwelling policies.

Flood is excluded by the standard property and casualty contracts, however, wind and wind blown water is covered. Also, the standard contracts have a clause called concurrent causation. This means that if a loss is caused by an excluded peril (flood) but that peril is caused by a covered peril (wind), coverage is provided.

If it is determined that the counterclockwise hurricane winds caused Lake Pontchatrain to overflow the levees, the policy holders have a legitimate chance of collecting. I haven't seen this discussed in the media, but I guarantee there will be court cases and I won't be surprised if the policyholders prevail.

Note that with all of the problems in Florida the property policies most insurance companies write there exclude wind as a covered peril. Consequently, it's more of a non-issue in the sunshine state. But given the lack of recent New Orleans problems, it may be that the policies there don't exclude wind. It sure won't surprise me if that's the case.

I have no idea about this for the Mississippi gulf coast.
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