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Hurricane Insurance Claim Denials: Insurers Using Anti-Concurrent Cause Language

UPDATED: February 20, 2013

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Although it's been several years since Hurricanes Wilma, Rita and Katrina, lawsuits continue over whether insurance companies can point to anti-concurrent cause language to avoid liability. Here's a closer look at what it means and how adjusters determine whether wind or flood water was the proximate cause of damages.

Anti-concurrent cause

Anti-concurrent cause clauses were introduced back in 1995 after policyholders were winning cases in which they claimed that wind and water damage from a hurricane occurred concurrently and damaged their homes. The insurance industry fought back and created anti-concurrent clauses which basically say a loss will not be covered if water and wind damage happened at the same time, or concurrently. Instead, it must be determined if wind or water was the moving, or proximate cause of the damage.

Attorney R. Jason Richards

R. Jason Richards, a Florida attorney whose firm represents victims of hurricane fraud and bad faith insurance practices, says that insurance companies have developed techniques to determine the proximate cause of the damage. He explained:

In concurrent causation cases where the structure remains intact, insurance companies typically rely on a high "water mark" to determine damage. Flooding usually produces a water mark or debris line on the walls of structures after it recedes, which provides information regarding how high the flood waters were in the structure at its peak. Items damaged at and below the high water mark are typically attributed to flood damage and items damaged above the water mark are typically attributable to wind damage.

Problems arise, however, when the structure has been completely destroyed and only a slab remains. In these cases, insurance companies will look to other forms of evidence, such as debris marks on surrounding trees or vegetation as well as meteorological data to estimate water height in the affected area. Based on these "rough" estimates, the company will seek to assess damage and liability.

Policyholders responsible for managing rebuilding process

Whose responsibility is it to oversee the repair or rebuilding of a home after a hurricane? Although many policyholders believe that their insurance company will manage the rebuilding process, that simply isn't the way it works. Richards explained:

Policyholders have certain obligations under the policy. Unfortunately, many policyholders often don't read their policies. They get it in the mail, pay the premium and then file it in a drawer without reading it.

While the insurance company can, and often does, assist them in walking them though the process regarding completing proofs of loss and claims forms and informing the policyholder to keep all receipts, at the end of the day it's up to the homeowner to make sure that the home was repaired properly, that the contractors are hired and paid and things of that nature.

The insurance company doesn't have any real obligation beyond assessing the damage and paying for the damage that they're required to pay under the policy. That's about where their liability ends. Everything else is on the homeowner.

Richards says that if the policyholder doesn't agree with the adjuster's estimate, they need to get their own bid and then submit it to the insurance company. However, the burden is on the policyholder to do what they're required to do under the policy, such as make repairs and preventing further damage, file proofs of loss, and document all their expenses related to relocation.

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