Submitted as comment, this review of the Corban video is a must-read that contributes much to the discussion. h/t Brian Martin
Aside from interesting reading, these comments provide background for the post I’m writing on cases currently in litigation and I’ve taken the liberty of adding links and bringing the comments forward as a post.
I recommend the video of the oral arguments.
USAA’s attorney tries to make their position seem reasonable by acknowledging some burden of proof in the oral arguments though he did not acknowledge that burden in motions and USAA has not applied that burden in practice.
Nationwide’s attorney then clumsily stated ACC the way most companies actually applied it and the Justices jump all over him.
USAA says it has the burden to prove that flooding contributed to the damage in order to exclude coverage, and presents a hypothetical case in which neither the wind nor the flood applied enough pressure independently to break a window, but the combination did so.
Under that scenario, USAA says it would not pay and flood would pay. That would be billing NFIP 100% for damage that was partially caused by wind.
What USAA’s attorney did not say was just how ridiculous it is to suggest that anyone could know just how many psi the wind and the water were putting on the window at the time it broke. In most cases we don’t know exactly how or when any damage occurred, and we especially do not know exactly at what second each window, wall, door, roof was breached and what was the exact force on it at the time. The whole argument is absurd.
USAA also insists that they can always distinguish the wind damage from the flood damage, which also is an absurd statement.
The so called proof that USAA is offering in this case, as with other insurers in other cases, is recent expert testimony that was bought three years after Katrina as the case got nearer to coming before a jury. The adjusters that paid policy limits on the flood policy and pennies on the wind policy did not estimate the maximum psi of the wind before the arrival of the flooding or do any determination of “proof” that flooding was all or part responsible for the loss.
USAA, as with others, saw that there had been some flooding and paid out NFIP limits.
Note that in every insurance case, when the companies are forced by the courts to prove that flooding was responsible, they are not presenting any determination of “proof” that happened in 2005 when the flood claim was paid and the wind claim was not paid.
What experts offer is not proof. Experts try to propose plausible scenarios by cherry-picking the available evidence and ignoring the evidence to the contrary. They don’t know much and they don’t prove much. I am amazed that insurance companies and their lawyers do not see from the jury cases that when they pretend to prove that wind caused no damage, they forfeit any credibility they had.
Please watch the Nationwide attorney’s disastrous argument. He went up there to defend the 5th Circuit’s idiotic Leonard decision, which is what USAA asked for originally in motions but had the good sense not to defend in oral arguments.
One justice asked Nationwide whether ACC would exclude coverage in a case where a home was 95% destroyed by wind before any flooding. The response was that if Nationwide could prove that the flooding was strong and high enough to have destroyed the home anyway, then the wind coverage was excluded. According to him, it does not matter what actually caused the damage. If the subsequent flooding would have caused it, the damage is covered by NFIP and not Nationwide.
Unfortunately, no one was there representing federal taxpayers to ask him why NFIP should pay for a house that was destroyed by wind.
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