Wind, Water, and the Causation Question
A homeowners policy on a $300,000 dwelling in Lafourche Parish has a 5% hurricane deductible, replacement cost coverage, and a flood exclusion. Hurricane winds peel back shingles over the kitchen; rain enters and damages ceilings and cabinets. Later, 18 inches of storm surge enters the same room. The insurer's engineer reports 'water damage throughout' and denies the entire claim, citing the flood exclusion. The insured has a separate NFIP policy with a $250,000 building limit. The public adjuster documents $40,000 of roof damage, $60,000 of interior damage (some from rain, some from surge), and $30,000 of flood-only damage. The insurer has paid nothing. The insured wants the adjuster to demand the full $130,000 from the homeowners insurer because 'the wind started it.' The policy contains no appraisal demand yet, and the proof-of-loss deadline is 60 days away.
1. Analyze the homeowners and flood coverage. Can the insurer deny the entire claim because water was present?
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No. The homeowners policy covers wind, and rain entering through a wind-created opening is generally treated as wind damage, not flood. Rising storm surge is flood and is excluded under the homeowners policy but may be covered by the separate NFIP policy. The insurer's statement that there was 'water damage throughout' does not by itself prove that every dollar of damage was flood.
The key issue is causation language. If the policy contains an anti-concurrent causation clause, the insurer may exclude damage in which flood and wind concurrently contributed, even if wind also contributed. If the clause is narrower, the insured may recover the wind-caused portion. The insured bears the burden of showing a covered peril; the insurer bears the burden of proving an exclusion applies.
The evidence should separate the losses: roof damage from wind, interior rain damage through the wind opening, and damage from standing surge. The adjuster should obtain a meteorologist or engineer report, photographs of water lines, debris patterns, and a timeline. The $130,000 demand is not supported; the proper approach is a documented allocation to the homeowners policy and a separate NFIP claim for flood-only damage.
2. How should the hurricane deductible be applied, and what is the role of appraisal?
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The 5% hurricane deductible is calculated on the dwelling limit, so 5% of $300,000 is $15,000. It applies to the covered wind loss under the homeowners policy, not to the separate flood claim. If the covered wind loss is, for example, the $40,000 roof plus the portion of interior damage proven to be rain-driven, the deductible reduces that covered amount. The deductible does not reduce the NFIP payment, which has its own deductible.
Appraisal is available to resolve the amount of loss when the insurer and insured disagree, but it does not decide coverage or causation. The adjuster should first demand a written coverage position and preserve the appraisal right. If the insurer continues to deny coverage altogether, appraisal may not be appropriate until the coverage dispute is resolved. If the insurer accepts wind coverage but disputes the dollar amount, appraisal can break the impasse. The proof-of-loss deadline should be protected by requesting an extension in writing and submitting a documented claim rather than waiting for appraisal. The adjuster should not sign a proof of loss that mischaracterizes flood damage as wind damage.