The two major legal efforts on behalf of homeowner hurricane damage claims==which insurers say will fail because of flood exclusions==have a good chance of success, according to policyholder advocates speaking at a conference yesterday.
At issue are lawsuits by Mississippi Attorney General Jim Hood and private attorney Richard Scruggs that seek to compel insurers to honor hurricane water damage claims.
J. Robert Hunter, insurance director for the Consumer Federation of America, said that while he is not an attorney, his group had done research on the Hood and Scruggs complaints, which insurers have suggested have no merit. "It's not true. They aren't frivolous and they shouldn't be tossed out. Some of them they will win and some of them they will lose," he predicted
Mr. Hunter was speaking at the Policyholder Advisor Conference in New York put on by the Anderson Kill and Olick law firm.
Robert. M. Horkovich, a shareholder in Anderson Kill, said insurers know that if the cases involving hurricane damages come before juries in the hurricane-damaged states of Alabama, Louisiana, Texas and Mississippi, "they're toast."
"You are going to win the case if you can get it to the jury," he said.
He said after his talk that Mr. Scruggs' actions on behalf of Gulf Coast homeowners who retain his firm are in essence defective product lawsuits, while Mr. Hood's suit is directed at anti-consumer practices.
A key point at issue, he said, is that insurers make a distinction between tidal surge and flooding from rising waters. "That fact has not been made well known," said Mr. Horkovich, explaining that the distinction means they could have excluded the peril from wind-driven storm surge.
According to Mr. Hood's action against insurers in the state, the standard homeowners policy that purports to insure against loss and damage from windstorms and hurricanes contains water damage exclusion language that is ambiguous and violates the state consumer protection law.
Mr. Scruggs has accused insurers of misleading buyers about their protection by selling policies that purported to cover damage typically caused by hurricanes.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.