Once the property is lost, then how do I regain it to lose it again with water?

Judge Randolph’s question was the first thing that came to mind after reading Did insurers testimony show guilt? h/t Y’all Politics

Recent arguments in a Mississippi Supreme Court case offer proof that private insurers are improperly pushing storm damage claims from their books to the government-backed flood insurance program, Rep. Gene Taylor, D-Bay St. Louis, said in a telephone interview.

“It confirmed, under oath, what we have been saying all along: that the taxpayers got stuck with paying bills that the insurance industry should have paid,” said Taylor, who has long maintained that it’s a conflict of interest for insurers to be responsible for handling homeowner policies and flood policies for the same property…

With Nationwide’s startling admission, too little has been made of the testimony given by USAA attorney Charles Copeland, AKA the King of Flip-Flops.

Charles Copeland, a lawyer for USAA, a Texas-based financial services company and insurer, did not go as far as Landau but said that a policyholder would not be entitled to collect if the storm damage were due to “the combined concurrent force of wind and water.”

In a June 18 letter to Taylor, Copeland said that USAA does not shift coverage for wind damage to the flood insurance program.

“Shift” is the key word here – USAA does not “shift” because, according to Copeland’s testimony, Congress intended for the flood insurance program to pay for more than “flood only” damage.

Mr. COPELAND:   …What is the jury to do when they go back in the jury  room, and they say, Well, maybe it was caused by both at  the same time?’ They need direction. They need direction. The policy sets that direction. That, by what Ms. Guice said, was the purpose of this clause. It put that middle concurrent or synergistic or contributing cause but for; it put that one little piece of loss outside this policy because it went into it…

This coverage was allocated to the National Flood  Insurance policy. That’s where you find that coverage for… — flood or the combination…

The issue of billing the NFIP for combined wind and flood came up again in the testimony given by Copeland after the break.

JUSTICE CHANDLER:  But now as I understood the Plaintiff, the Plaintiff is going to argue that, if there are combined forces, then they are entitled to payment  because the per square inch of force from water alone is insufficient to cause the damage.

MR. COPELAND: Yes, sir.

JUSTICE CHANDLER: That’s really the disagreement between the two sides that matters; is that correct?

MR. COPELAND: Yes, sir. And that’s what this second sentence in this policy addresses.

JUSTICE CHANDLER: I’m looking at it.

MR. COPELAND: And it was — it had to go somewhere.

It did not go in the homeowner’s policy. It went in the National Flood Insurance. That’s what Congress did.

We all subsidize that by 25 percent. It benefits from the spread of risk because it’s a nationwide spread of  risk.

What you’re simply saying, if you force flood insurance for that combined flood insurance into this policy, you’re double covering it with the National Flood Insurance Program. And what you’re doing is you’re double covering it at a much higher premium…

The article in the Mississippi press concludes with a clarification of the issue from Corban v USAA currently before the Mississippi Supreme Court :

The issue for the state’s high court, which has not yet ruled, involves the interpretation and application of “anti-concurrent causation,” a policy clause that generally allows insurers to avoid paying a claim if they can show that at least some of the loss resulted from a factor not covered by the policy.

Justice Dickinson had a different take:

JUSTICE DICKINSON: I think what we’re concerned  about is that, in a hurricane, you’ve got wind, and you’ve got water.


JUSTICE DICKINSON: And for an insurance company to just walk in and say, ‘Well, there was wind, ‘ or, ‘There was water, so we don’t cover anything,  doesn’t address the problem.

According to Justice Randolph, “the problem” is “once the property is lost, then how do I regain it to lose it again with water?”

He  certainly can’t pose that problem to the members of the 5th Circuit; but, Congressman Taylor has known the answer all along – and offered the only real solution.  Property owners need multi-peril coverage for multi-peril events.