An "Act of God" can neither be planned for nor prevented. Bycontrast, a flood caused or contributed to by an act of negligence,even if the negligence simply exacerbated the flooding, may presenta recovery opportunity. The Hurricane Katrina litigation is proofthat flood recoveries are possible: the Army Corps of Engineers washeld responsible for failing to maintain and operate properly anavigation channel (MRGO). This breakdown was a substantial causeof the failure of the Reach 2 levee, which contributed to theflooding of the plaintiffs' properties. The question was notwhether the defendant caused the flood, but rather whether thedefendant's negligence contributed to the damage to the plaintiff'sproperty.

Since 2000, the National Flood Insurance Program (NFIP) has paidmore than $25 billion in claims, and claims are expected to grow insize and number. While flood claims present challenges for allinsurance professionals, they also present recovery opportunities.Some simple, common-sense guidelines will enhance recoverypotential for flood subrogation claims.

Determine Subrogation Potential Early On

When considering recovery, it is critical to identify the sourceof the flooding: a restriction or obstruction in a waterway causinga water backup (a downstream problem) or excess water supplycausing increased water flow (an upstream problem).

Even before this, an adjuster's first responsibility is toevaluate recovery potential through the available information anddetermine if an engineer or lawyer should be involved. Was theflood caused by an Act of God, foreclosing recovery, or was some(or all) of the flood damage caused or contributed to by thenegligence of some person or entity? Was the storm foreseeable, andcould it have been planned for, or was it impossible to predict,plan for or prevent?

While a determination in this regard may be difficult, somethings to look for are: a difference between the rainfall and therise in the water level or stream flow; flooding that seems to beout of proportion to the rainfall; flooding in one area but not inanother that received similar rainfall; and obstructions in thewaterway. Typically, media reports exaggerate rainfall data. Only acareful scientific evaluation of the rainfall and stream flow datacan determine if the damage was the result of rainfall or thecombined effects of rainfall and bad planning. If the flood causessignificant damage to insured property, then there is littledownside in involving an engineer or other recoveryprofessional.

Evidence and opportunity can be lost if decisions are not madepromptly. The best time to measure the water and its effects isduring or shortly after the storm and flood. Rainfall and streamflow data can be gathered later as it is compiled and archived invarious databases, such as FEMA and the National Weather Service;however, prompt, on-the-scene investigation can provide valuablefactual details that can help prove a case years later. It is easyto attribute flood damage to excess rain, but often floods arecaused by subtle problems with bridges, streambed maintenance, orin changes in upstream land use. Catastrophic property damage canbe the result of an inch of water in the wrong place at the wrongtime, reaching a hospital's technical center, or the computer datacenter of a manufacturing facility.

Hire the Right Experts

Just as it is critical to fast-track the investigation, it iskey to retain the right experts. The adjuster may need the help ofan expert such as a hydrologist, the most important member of theteam, in the initial investigation. Making the investigationinvestment is an important step in identifying and understandingthe design criteria for waterways and surrounding structures, andin determining the adequacy of these designs. A hydrologist canevaluate the movement, distribution and quality of water. Thisprofessional can also calculate, measure, and evaluate rainfall andstream flows to determine the size and intensity of storms andtheir contribution to floods. Hydrologists can calculate peak waterdischarges (water volume) and determine watershed discharge byanalyzing precipitation runoff. In addition, they may interpret andextrapolate data. These calculations and opinions are based onaccepted scientific principals and theories, and should thus beadmissible in court.

The hydrologist can test different variables in channelconfigurations, including channel width, depth and bottom surfaces,to evaluate the stream bed and maintenance. It may be necessary toconsider the addition or removal of obstructions such as bridges,highways, or utility conveyances to judge their impact on waterflow and elevation. Computer models can enable the hydrologist toevaluate these different scenarios. With a model, the engineer canmanipulate the configuration of the channel to pinpoint how achange affects the water level at the insured property. He or shecan determine if the channel was maintained properly, and if not,demonstrate how the lack of maintenance affected the water level.These tools have been used to successfully demonstrate, even in500-year storms, how a lack of maintenance caused the flood watersto be several inches higher at an insured property causingsignificant damage. An effective hydrologist can describe in vividbut concise detail what caused the water to enter the specificproperty and how changes (sometimes minor) in a stream bed orwatershed could have prevented the damage.

Other scientific disciplines may be used in flood litigation; ameteorologist who can testify about weather patterns and rainfalllevels; a surveyor who can verify elevations taken in the field bythe hydrologist; and a municipal liability expert who isknowledgeable about the standards for waterway maintenance. Inaddition, civil engineers for dam and obstruction cases, zoningexperts in cases involving over-development of the watershed andgeotechnical engineers may be called upon to testify regardingdams, levees, and earth movement. The goal is to coordinate all ofthese specialties and develop and present a coherent case.

Get to the Source

Whatever experts you retain, the threshold determination for arecovery claim is to understand the source of the flood water Oftenfloods have multiple sources and multiple causes. It is crucial tonote that the focus must be on the insured property and the waterthat damaged it:

• Did the water come from a nearby creek, stream, or river?
• Did it originate at an overflowing sewer system, a municipal watersupply, or a broken water main?
• Does the municipality have a combined sanitary/storm drain systemthat contributed to the flooding? Was the flood the result of toomuch rain in the storm system resulting in an overflow and/orbackup?
• Did a local water authority (or the Army Corps of Engineers)release water from a retention pond, catch basin, orreservoir?
• Did a dam leak or break, or was it intentionally relieved?
• Did a land developer neglect to install proper water retentionfacilities, causing excess water to run off land adjacent to awater way?

There are hundreds of similar questions that need to be raisedfor every flood loss. To a property owner with 6 inches of water inhis property, the difference between a 500-year flood and a1,000-year flood is unimportant. The owner wishes that either hisbuilding was 6 inches higher or the water was 6 inches lower.

Evaluate the Cause

Once the source of the water is identified, you can evaluate thecause. Was there a waterway restriction (a downstream problem) orexcess water supply (an upstream problem)?

Restrictions can be caused by blockage of the waterway, a lackof waterway maintenance, resulting in an inability of the channelto carry water, poor design of bridges or roadways, or waterwayconstruction resulting in a blocked or restricted channel. Anythingthat impedes the flow of water can contribute to floodingconditions upstream of the restriction.

Excess supply can be as simple as a historic rainstorm thatoverwhelmed all the systems. Or, it can be the result of improperupstream development, box store parking lots, apartment buildings,or other institutional development that alters drainagepatterns.

Typically a combination of factors, including historic rainfallsand negligent construction and maintenance, contribute to flooding.Replacing soil, grass, and brush with impermeable asphalt,blacktop, buildings, parking lots, and swimming pools changes thedrainage characteristics of the watershed. Therefore, suchdevelopment must be monitored and controlled. The enlightened viewis that storm water runoff is an asset, a natural resource that hasto be managed rather than a problem to be avoided.

Identify Responsible Parties

Responsibility may rest with local governments and governmentalentities, which are obligated to maintain waterways and appurtenantstructures. All states have statutes governing immunity, recoverycaps, notice requirements, and statutes of limitations for theseclaims. These statutes can compromise a viable recovery claim andmust be carefully considered.

If you are seeking recovery, then other potentially responsibleparties include contractors who negligently develop land orbuildings in the floodplain, waterway or watershed; engineers whocontributed to the negligent design or maintenance of a waterway,waterway obstruction (such as a bridge) or watershed development;railroads took part in negligently designing, constructing ormaintaining a bridge or other structure which might have obstructeda waterway or floodplain; and highway departments that designedhighways, ramps, bridges, or support structures that affectedwaterways or watersheds.

The Army Corps of Engineers (ACOE) participates in one way oranother in most major water projects in the United States. Theydesign flood control projects, operate dams, supervise creek andstreambed maintenance. Claims against the ACOE may be difficult, asthe ACOE often is protected by immunity. Section 3 of the FloodControl Act of 1928 (33 U.S.C. ? 702c) immunizes the U.S. and itsagencies from liability for any damage resulting from riverfloodwaters or the operation of a flood control project. There is alimited waiver of immunity in the Federal Tort Claims Act (FTCA),28 U.S.C. 1346(b) (Refer to the Katrina Opinion). The FTCA allowsprivate parties to sue the U.S. in federal court for tortscommitted by persons acting on behalf of the government. It islimited because it does not allow claims for discretionaryfunctions or other specified conduct.

In the Katrina litigation, U.S. District Judge Stanwood Duvalheld that the ACOE was not immune from claims that it failed toproperly maintain and operate a navigation channel (MRGO) that wasnot a flood control project. It was a cause of the failure of thelevee. The opiniondiscusses federal immunity in detail, expert testimony, and manytheories of flood liability. It is recommended reading for anyoneinvolved in flood litigation.

Most states have statutes of repose that protect designprofessionals and contractors. Many states require that a plaintifffile a notice of claim as a prerequisite for filing a lawsuit. Somestates have unique statutes of limitation and liability caps forclaims against governmental entities. Many of these defenses arepart of a state's sovereign immunity scheme. Sovereign immunity istypically codified in one or more statutes commonly known as TortClaims Acts -- for example, North Carolina's State Tort Claims Act(N.C.G.S 143-291). These acts must be considered when making claimsagainst governmental entities.

Flood claims present challenges but also opportunities.Following the steps above can help you minimize expense whilemaximizing recovery.

Further Reading

Stream gauges, rain gauges, flood maps, and a variety of otherresources are available -- and necessary -- to understand floodsand their causes. Much of this information is available online.There are numerous web sites that chronicle floods and theircauses. You may want to check out these resources: the Army Corps of Engineers,FEMA, the United States Geologic Survey, localwater authorities, and even YouTube. Additionally, the National Oceanic and AtmosphericAdministration maintains two services: the National Weather Service; and theNational Environmental Satellite, Data, and Information Service(NESDIS); both have a wealth of weather-related information usefulin evaluating flood related claims against either public or privateentities. The NESDIS National Climatic Data Center is availablehere.