This ruling specifically upholds concurrent causation language: the damage from the excluded loss is not covered, even though it occurred in combination with a covered loss from wind. The covered loss, however, is still covered.
The company set itself a trap by first finding there was a covered wind loss, then refusing to pay anything for wind damage.
If the company had made some reasonable estimate of the wind damage, say $10,000 for roof and window damage, then it probably would have at least avoided punitive damages and might have avoided paying the full value of the home.
The judge only awarded the full value of the home because the insurance company insisted there was no way to tell how much of the loss was covered and how much was excluded. In which case, it\’s settled law that ambiguities in contracts of adhesion are interpreted in favor of the customer.
The blatant wrong the company did was to admit that there was wind damage, then refuse to pay anything because the damage was all caused by water.
The contract says they pay for wind damage.
The company\’s testimony and experts agree there was wind damage.
The company refused to pay anything.
Therefore, company has willfully violated its insurance contract with its customer.
It might have been different if the company had reasonable evidence the damage was all due to water. Then it would be a question of facts. But when the company\’s own experts said there was wind damage, and the contract says wind damage is covered, the company needs to pay *something* for wind damage or else it is intentionally breaching its contract with the insured.
Does anyone have the actual ruling or is the article it? Because the article doesn\’t state the insurer found wind damage. It states the customer claimed wind destroyed the home and the insurer claimed water destroyed the home.
Also, what\’s with the all or nothing ruling by the judge. I\’m curious if any expert was able to say the house was destroyed by wind. However, I\’m sure experts on both sides can state the flood damage was significant enough to destroy the home.
Regarding all the houses that were destroyed (blown or washed away for arguments sake), if the company paid for everyone\’s roof, windows, and nonmasonry siding, would you have sided with the carrier, found them not guilty and awarded no damages?
The good thing about mutual companies is they are not answerable to investors. Also, if you look around your home, I\’m sure every room in your home (not to mention all the family-owned, farm produced items in your fridge) contains items from companies that appreciated family.
Also, check out the salaries of StateFarm execs. No Enron or NASDAQ nonsense there.
Well stated. Your statement hits this point right on.
This is what many are missing. There is a contract in place and you can\’t have adjusters \”guessing\” what happened. The claim can only be paid or denied on reasonable facts.
Round 1 is over. I\’m sure the attorneys for these folks have already let them know this will be moving to a more unbiased court.
IJ\’s article was pretty light on details. I\’m sure more will come out later.
Quoting from the New York Times:
[Begin Quote]
After Hurricane Katrina, State Farm and other insurers balked at paying claims, arguing that much of the damage to houses was caused by flooding, which is not covered by a typical homeowner policy. Many insurers also contended that if any damage to a home had come from water, it nullified the basic coverage for wind damage.
Judge Senter agreed in a ruling that the insurers were not obligated to pay for flood damage. But he said that when both wind and water damaged or destroyed a house, it was the burden of the insurance company to prove how much of the loss was because of water and pay for any wind damage.
A clerk for Judge Senter said in a telephone interview from Gulfport that experts for State Farm acknowledged in court documents that some damage to the Broussard’s home had come from wind. But, he said, “they did not offer evidence during trial” showing how much of the damage was from water and how much from wind, as Judge Senter had required.
Ultimately, he said, the judge ruled that State Farm was liable for all the damage because the insurer had not provided enough evidence “the jury could use to segregate” the wind from the water damage.
[End Quote]
Quoting the Associated Press:
[Begin Quote]
State Farm and other insurers say their homeowner policies cover damage from wind but not from water, and that the policies exclude damage that could have been caused by a combination of both, even if hurricane-force winds preceded a storm\’s rising water.
Senter, however, ruled that State Farm couldn\’t prove that Katrina\’s storm surge was responsible for all of the damage to the Broussards\’ home. The judge also said the testimony failed to establish how much damage was caused by wind and how much resulted from storm surge.
[End Quote]
One point both articles make in different ways — insurers claimed their concurrent causation clauses applied to damage that \”could have\” been caused by either excluded water or covered wind. But none of the concurrent causation clauses I\’ve seen actually say that — they exclude damage that *was* caused by the excluded peril. \”could have been\” and \”was\” are two very different standards of evidence.
Gulfport Visitor asks: \”if the company paid for everyone\’s roof, windows, and nonmasonry siding, would you have sided with the carrier, found them not guilty and awarded no damages?\”
Who can say?
Is there a claimant out there who has video of a tree falling through their house before the storm surge arrived? If so, that\’s clearly wind damage, not water/flood damage.
Claims need to be settled case-by-case, on the facts of each situation. If the company\’s own engineering reports show wind damage, they\’d better pay for wind damage. If they can show it\’s all flood damage for a particular home, they shouldn\’t have to pay. If they adopt a blanket policy of saying everyone in the surge zone had no covered wind damage, they should expect to be called on it.
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If it\’s so obvious that it wasn\’t wind damage, why did the company say there was wind damage then refuse to pay for a covered claim??
This ruling specifically upholds concurrent causation language: the damage from the excluded loss is not covered, even though it occurred in combination with a covered loss from wind. The covered loss, however, is still covered.
The company set itself a trap by first finding there was a covered wind loss, then refusing to pay anything for wind damage.
If the company had made some reasonable estimate of the wind damage, say $10,000 for roof and window damage, then it probably would have at least avoided punitive damages and might have avoided paying the full value of the home.
The judge only awarded the full value of the home because the insurance company insisted there was no way to tell how much of the loss was covered and how much was excluded. In which case, it\’s settled law that ambiguities in contracts of adhesion are interpreted in favor of the customer.
The blatant wrong the company did was to admit that there was wind damage, then refuse to pay anything because the damage was all caused by water.
The contract says they pay for wind damage.
The company\’s testimony and experts agree there was wind damage.
The company refused to pay anything.
Therefore, company has willfully violated its insurance contract with its customer.
It might have been different if the company had reasonable evidence the damage was all due to water. Then it would be a question of facts. But when the company\’s own experts said there was wind damage, and the contract says wind damage is covered, the company needs to pay *something* for wind damage or else it is intentionally breaching its contract with the insured.
Does anyone have the actual ruling or is the article it? Because the article doesn\’t state the insurer found wind damage. It states the customer claimed wind destroyed the home and the insurer claimed water destroyed the home.
Also, what\’s with the all or nothing ruling by the judge. I\’m curious if any expert was able to say the house was destroyed by wind. However, I\’m sure experts on both sides can state the flood damage was significant enough to destroy the home.
Did the company actually admit there was wind damage? Can someone show me the ruling/article where this is stated?
Bottom line, if the company could prove wind only, they would pay. But they can\’t. However, they can prove flood damage.
Regarding all the houses that were destroyed (blown or washed away for arguments sake), if the company paid for everyone\’s roof, windows, and nonmasonry siding, would you have sided with the carrier, found them not guilty and awarded no damages?
Just curious.
The good thing about mutual companies is they are not answerable to investors. Also, if you look around your home, I\’m sure every room in your home (not to mention all the family-owned, farm produced items in your fridge) contains items from companies that appreciated family.
Also, check out the salaries of StateFarm execs. No Enron or NASDAQ nonsense there.
Well stated. Your statement hits this point right on.
This is what many are missing. There is a contract in place and you can\’t have adjusters \”guessing\” what happened. The claim can only be paid or denied on reasonable facts.
Round 1 is over. I\’m sure the attorneys for these folks have already let them know this will be moving to a more unbiased court.
IJ\’s article was pretty light on details. I\’m sure more will come out later.
Quoting from the New York Times:
[Begin Quote]
After Hurricane Katrina, State Farm and other insurers balked at paying claims, arguing that much of the damage to houses was caused by flooding, which is not covered by a typical homeowner policy. Many insurers also contended that if any damage to a home had come from water, it nullified the basic coverage for wind damage.
Judge Senter agreed in a ruling that the insurers were not obligated to pay for flood damage. But he said that when both wind and water damaged or destroyed a house, it was the burden of the insurance company to prove how much of the loss was because of water and pay for any wind damage.
A clerk for Judge Senter said in a telephone interview from Gulfport that experts for State Farm acknowledged in court documents that some damage to the Broussard’s home had come from wind. But, he said, “they did not offer evidence during trial” showing how much of the damage was from water and how much from wind, as Judge Senter had required.
Ultimately, he said, the judge ruled that State Farm was liable for all the damage because the insurer had not provided enough evidence “the jury could use to segregate” the wind from the water damage.
[End Quote]
Quoting the Associated Press:
[Begin Quote]
State Farm and other insurers say their homeowner policies cover damage from wind but not from water, and that the policies exclude damage that could have been caused by a combination of both, even if hurricane-force winds preceded a storm\’s rising water.
Senter, however, ruled that State Farm couldn\’t prove that Katrina\’s storm surge was responsible for all of the damage to the Broussards\’ home. The judge also said the testimony failed to establish how much damage was caused by wind and how much resulted from storm surge.
[End Quote]
One point both articles make in different ways — insurers claimed their concurrent causation clauses applied to damage that \”could have\” been caused by either excluded water or covered wind. But none of the concurrent causation clauses I\’ve seen actually say that — they exclude damage that *was* caused by the excluded peril. \”could have been\” and \”was\” are two very different standards of evidence.
Gulfport Visitor asks: \”if the company paid for everyone\’s roof, windows, and nonmasonry siding, would you have sided with the carrier, found them not guilty and awarded no damages?\”
Who can say?
Is there a claimant out there who has video of a tree falling through their house before the storm surge arrived? If so, that\’s clearly wind damage, not water/flood damage.
Claims need to be settled case-by-case, on the facts of each situation. If the company\’s own engineering reports show wind damage, they\’d better pay for wind damage. If they can show it\’s all flood damage for a particular home, they shouldn\’t have to pay. If they adopt a blanket policy of saying everyone in the surge zone had no covered wind damage, they should expect to be called on it.