Insurance Law

Likely Hurricane Sandy Coverage Issues Include Extent of Flood Exclusion, Multiple Causation, Mold

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Although losses this week from Hurricane Sandy, which hit the Northeast hardest, are still being calculated, it appears that they will likely dwarf the billions racked up by Hurricane Irene, according to the Financial Times.

But as individuals and businesses deal with the latest storm damage, many may also have to decipher a potential insurance issue: It’s not the wind so much as the water that often causes the most havoc in a major storm. And, because most property insurance policies exclude flood damage, this can make it difficult even for legal experts to determine what should and should not be covered under various policies.

For homeowners who have flood insurance, often purchased through a federal government program, the claims process can be fairly straightforward, according to the Associated Press. A Reuters article provides helpful step-by-step instructions for filing a claim that is likely to pass muster.

For those without flood insurance, it may still be possible to get help dealing with some water-related losses from the Federal Emergency Management Agency, or under state disaster relief programs.

A FEMA page focusing on the National Flood Insurance Program and a New York Times article offer additional details.

For businesses and hard-hit homeowners, insurance issues may be more complex. While a flood exclusion may apply to some damage, it could be that damage was caused by multiple perils, in which case it could be important to determine whether damage was simultaneous or sequential, according to Westlaw Insider, which offers a helpful primer of insurance terms and coverage issues.

Compliance with governmental requirements and damage, such as mold, that can arguably result from inadequate mitigation efforts can also be important in determining coverage issues, the article notes.

Related coverage: “ABA Groups and Members Offer Help to Those Affected by Hurricane Sandy” “What Katrina Can Teach Lawyers About Disaster Preparedness; FEMA Grants $1.7M to Preserve Records”

Daily Finance: “Hurricane Sandy the Frankenstorm Is Coming: Do You Have Flood Insurance?”

Los Angeles Times: “Hurricane Sandy is a reminder of how travel insurance can help”

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