"Wind-Driven Water Damage"

If you have homeowner's insurance like me, you had better do some double-checking on the details of your policy....and don't take your agent's word for it. Unfortunately, you just nearly have to have a law degree anymore to decipher it accurately. That of course partly due to a defensive reaction stemming from our litigous-frenzied society in which people sue for anything and everything including spilling hot coffee in your crotch. The policy legal complexity also better allows insurance companies to screw people over by denying coverage. Here is a perfect case in point:

Hurricane Katrina Court Battle

The dispute centers around an ambiguous clause that the insurance company, in this case "Nationwide", carefully worded in the policy to exclude coverage for "wind-driven water damage". This is being used to deny a Hurricane Katrina victim's claim for wind damage. Unfortunately, a judge ruled in the insurance company's favor. So, out of about $130,000 damage, they are only going to get $3,000 for "wind damage". The rest of the damage, as I read it, is a result of "wind-driven rain" or storm surge.

So, as the article points out, you lose your roof by wind, that's covered. But the "wind driven rain" soaking the rest of the house, inside and out, isn't covered. Nationwide and other insurance carriers claim that their policies do not cover a combination of wind and water damage. Again, that is very vague and allows them plenty of room for legal maneuvering based on semantics.

Residents in tornado alley should pay heed because if a tornado rips your roof off and then two inches of rain soaks the interior and ruins it, are you fully covered? I used to think so, but not any more. Regulations vary in each state and this particular policy in Mississippi might not even be an issue elsewhere in other states which might require more explicit language and prohibit such shenannigans. But, it certainly should be a wake up call to double check. Insurance companies are always working hard to pry open legal loopholes in state regulations.

I thought flood insurance was just that...for floods. I also know that as a result of the "black mold" hysteria in Texas a few years ago, you must purchase additional water damage insurance in this state to cover things like busted faucets, water heaters, etc. ...but the last time I checked, it wasn't required for house less than 10 years old like mine. I wonder if that is still true?

So, the insurance shell games continue unabated. It's fast becoming one of the headaches of being a homeowner as well as the MOST important thing to consider and monitor. As the victims listed in the news story found out, all of your equity and investment that you work so hard for most of your life can disappear in the blink of an eye...never to be recovered.....all thanks to a greedy insurance company and it's legal minefield of exclusions and exceptions. A company whose mottos might be:

"Like a good neighbor, State Farm is there"

"Nationwide is on your side"

"You're in good hands with Allstate"

I disagree with the judge's ruling. Although I certainly didn't preside for 8 days over this case and immersed in all of the details and legal arguments from both sides, there is a tried and true legal precedent that I think he is not considering. That is "the intent and spirit" of any agreement should weigh heavily in a decision. Here, with such an ambiguous policy statement as the judge himself pointed out, I would weigh the intent and spirit of the policy agreement in this case in favor of the policy holders who were only asking for 1/3 of the total damages related to wind. I can't help but think that this is a fair settlement for both sides.

I would hope that ethical lawyers (is that a contradiction, or what?) somewhere, or at least a lawfirm short on it's required pro bono quota, will pick up this case and escalate it to a higher court and overturn this judge's poor decision.

Now, the insurance companies have a "precedent" in which to fight other homeowner policy claims for hurricane damage. I'm certain that they'll turn their vulture eyes upon other "opportunities" with various types of storm-related damage all around the country. We should all beware and read through our homeowner policies with a magnifying glass and ask questions...lots of questions...and from several different insurance company representatives. Call it a "proactive defensive measure". The time to ask questions and learn the details is not when you need to make a claim. Not to sound preachy here, I'm also talking to myself. ;-)