Hurricane Irene Insurance Lawsuits Likely To Follow Coverage Denials

A deluge of insurance coverage lawsuits are likely to come in the wake of Hurricane Irene, according to a recent report. 

Hurricane Irene ravaged the eastern coast last week, causing billions of dollars in damage due to flooding, rain and high winds from North Carolina through Maine.

According to a recent report by Reuters, a large number of lawsuits over insurance coverage disputes following Hurricane Irene are likely to be filed on behalf of homeowners who have their insurance companies deny coverage for damages.

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Hurricane Irene insurance lawsuits are likely to filed for coverage denials involving disputes over whether property damage was caused by rain damage and high winds, or flooding, which is excluded from many policies.

A similar influx of insurance litigation was seen following Hurricane Katrina in 2005, which caused widespread damage throughout the gulf coast, from central Florida to Texas. Hurricane damage lawsuits were filed after a number of insurance companies attempted to deny coverage, arguing that claimed property damage was caused by floodwaters.

In particular, many of the hurricane lawsuits following Katrina dealt with whether a wind-powered storm surge should be classified as wind or water damage. Storm surges are waves of water pushed ashore specifically because of high hurricane winds, unlike real flooding which is caused by rising water levels, usually due to heavy rains. Hurricane Irene had both.

More than 50 insurance companies faced or still face Hurricane Katrina insurance claim lawsuits, some of which were individual lawsuits, some of which were class action hurricane lawsuits and some of which were filed by attorneys general from states hit by Katrina on behalf of their residents.

Even in cases where homeowners specifically carried hurricane insurance, some companies may try to avoid paying for storm surge damage from Hurricane Irene, despite the fact that storm surge is a specific phenomenon and known aspect of hurricanes.

The number of insurance coverage lawsuits following Hurricane Irene could far exceed those filed after Katrina, as the area hit is far more densely populated, containing 20% of the population in the United States.

With laws varying from state to state, and the U.S. government having its own flood insurance program and rules requiring many flood cases to be filed in federal courts, the lawsuits over Hurricane Irene insurance coverage could take years to resolve.


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