Somebody is going to take it in the old Knickers.

It was predicted by several old timers, and will have a long lasting effect on our industry.

I saw reference to the coverage issue being a directed judgement. Unsure what that means in Ms. It appears from the reports the onus will be one the insurers to prove beyond a reasonable doubt that surge (flood) was the cause. Lawyer DS will be able to buy his own insurance companies when the dust settles. (He may have to to find someone willing to write insurance on the Gulf Coast)

I had heard that SF had reserved their entire EO Policy. I understand it is only a billion.
This might not be correct, any insight?

David Houtz

Here is a link with the same story. It will make a strong closing buzz for the NACA convention. It was good to get to see Roy Cupps again as he was one of the Crawford reps in their booth and meet Debbie for the first time in her Claims Mentor booth. We got to sit in the TWIA session today and the entire conference was well attended being in the heart of TX. : )

 

http://www.cnn.com/2007/LAW/01/11/katrina.insurance.ap/index.html?eref=rss_topstories

Jury hits State Farm for $2.5 million in Katrina case

 • NEW: Jury awards Biloxi, Mississippi, couple punitive damages
• Judge rules State Farm is liable for $223K in storm damage to home
• Insurer had argued it wasn't liable for damage caused by water
• Ruling could affect hundreds of other cases

Let's not all rush to judgement over this "directed verdict" which means the judge declared the verdict rather than allowing the jury to render one. Directed verdicts are typically rendered when the evidence is so overwhelming that a judge determines there is no other reasonable outcome. The corollary is that the party ruled against can claim they were deprived of their right to a trial by jury. A directed verdict obviously biases a jury for the remainder of the proceedings (i.e assessment of punitive damages). We don't know what the evidence presented may have been and we don't know how the verdict was determined. Further, this may very well be a case that merited a directed verdict (if there was no evidence to support the defendant's position) but this in absolutely no way can reflect on the merits of any other case. Each and every case must be evaluated on the merits of the evidence of factual occurrence. A coverage disclaimer (denial) can be supported if evidence exists to support that position.

The  HO-3 is in peril. Only a named peril policy can stop these type verdicts. Mississippi will have to go back to  the 165 line fire & extended coverage forms with endorsments.

Conditions Applicable Only to Windstorm, Hurricane and Hail: this company shall not be liable for loss.............................................................., nor (b) any snow storm, tidal wave, high water, or overflow, whether driven by wind or not;  nor for  any loss caused by rain, whether driven by wind or not; unless the wind or hail shall first make an opening in the walls or roof of the building.

This was the language in Camille(1969) and we always found some wind damage as well as a lot of" wave wash". But very few law suits. No wonder the judge ruled like he did. Did the defense attorney's use words like ?  "Comparative Causes" . We did 36 years ago right in downtown Gulfport.  

Decisions from Judge Senter's court in Leonard v. Nationwide and now Broussard v. State Farm demonstrate how different these claims, trials and decisions can be.

Anyone care to comment on what this latest verdict means to the working adjuster who does not work for Pilot, Worley, Crawford, Eberle, Etc.

sure Chuck, I'd say they will be getting a lot more work coming there way..... Seriously it is hard to say how this will affect the vendors doing that work. It is probably too early to say also in that you can guarantee it will be appealed. I have a transcript of the judges comments that he made on the record that I will put onto this forum later tonight or tomorrow as it makes interesting reading. It is 5 pages or court reporter paper and I will try to reduce it down to such as it will be more concise. If someone can clue me in on how to download the full document into this site and put a link into the forum I'll do it that way. It may be a PDF doc, but it isn't off the web that I have it so I can't give a link on the web itself.  (I have added the pdf below.Tip: use "Add Reply" instead of "Quick Reply" and then message attachments to add files to post. RC)

And Ray in response to your note, you will see that the ruling addresses the all risk aspect of it, but this mindset may apply equally to a named peril policy that has wind coverage. The emphasis of the DV was that there was wind and flood that damaged/destroyed the house. The damage aspect of the loss was stipulated by both sides and was not in controversy, and they also stipulated that the damages were a direct result of hurricane Katrina which destroyed build and contents and the values of those were agreed to. The insured has the burden to of proof to show that there was the damages which it had done, and the burden shifts to the carrier to prove that the damages are from an excluded cause of loss. If the carrier states a specific exclusion under the policy, the burden of proof clearly shifts to them to prove that the damages are a result of that exclusion. This case was one where it was basically a slab case and SF's own expert stated that it was more then likely that there was some wind damages to the roof of the dwelling. He was unable to acertain the extent of the wind damages to the property before the storm surge hit. Since the insd has met their burden of proof, it became the burden of proof on the part of SF to prove up how much of the damages were from wind (covered) and how much of it was from water (not covered). in a nutshell that is it, but there is some reasoning and case history also in the ruling that tells why and how this DV was made. More later.

Roy attached the pdf to my post above for review.

I contend the most broad policy written is the family automobile policy. We have never had to try a case that I can recall under the language with is all risk (with exclusions) on the Comprehensive Coverage section. This is why attorneys do not take first party cases on coverage in auto claims.

I worked Inland Marine losses for several years before the Homeowners Policy was written. The old Personal Property Floater policy (PPF) was truly an all risk and had very few exclusions. the key was sudden, accidental, unforseen, not expected. Flood was a covered peril

The named peril policy always spelled out windstorm, but the rising water covered, what tidal surge did not.

The underwriters worked the "flood" claims that were excluded on a compromise basis and paid for the wind damage that could have occured and most claims were settled.

After reading the ruling of the court, I can now understand the judges thinking. The experts may never recover from some of their reports.

Ray, I have to agree with you, as far as the beach front properties. Your right, we had no problems working Camille, cut and dried claims. The HO-3 could be written that would have a specific flood, wave wash, tidal surge, and rising water exclusion. It would, however, have to be very well thought out. Then the claim arises, and here come the law suits anyway. I don't think there is an answer, when politics are in play and I suspect politics are in heavy play with this situation. I would like to think they weren't, but I strongly feel politicians have been involved in this since Trent Lott started crying in his milk. The rule of law no longer governs our judicial system.

I believe we will see other states do what Texas did. The HO-B was never to have covered mold claims until the courts ruled that it did. The HO-B was one of the best policies written nation wide. I am not aware of any insurance company in Texas writting an HO-B any longer. The HO-A replaced it and it is a named peril policy. I have had three slab leak claims in the past 30 days that had serious foundation damage and interior cosmetic damage. The policyholders are shocked when I tell them the slab leak repair is covered but the foudation damage and the cosmetic damage are not. I believe the states that have the high court awards we are seeing will see their states go to a named peril Homewowners policy

Most claims on dwellings are one of the named perils, fire-lightning, windstorm, plumbing leaks, theft.

In the 2nd level would be smoke, vehicle and V& MM. The carriers will pull back/out from the Atlantic/Gulf Coast States. The dumb jury verdicts resulting in crack slabs from plumbing leaks, mold that has been present for 20 years, ALE for evacuation etc will have to be rewritten.

If I was a policy holder in the arid desert states I would not buy a Homeowners.

Gale, Thanks for your comments above about the NACA convention. For those of you that haven't had the opportunity to meet Roy Cupps in person, here are a few great photos of him from the NACA convention. He is with Kit England in one photo and James Shafrath in another- both are also members of CADO and ClaimSmentor. Roy was working the booth across from us in the Crawford booth. I already thought very highly of Roy prior to meeting him in person but I can't say enough great things after meeting him in person at the NACA convention!

Roy is on the left in the top photo with JimS and on the right in the bottom photo with Kit England.

They may be "On the Run" in Mississippi:

http://insurancenewsnet.com:80/article.asp?a=top_news&id=74333

This is as posted in the Claims Magazine. It is rather disturbing that politicians, who cannot run this country right, now feel they must venture into another area they know nothing about'

quote:

Fallout Begins from Mississippi Verdict

<script language="JavaScript" type="text/javascript"></script>

Claims News Service, Jan. 15, 11: 34 a.m. EST — In response to the recent verdict in the case Broussard v. State Farm Fire & Casualty Co ., in which a judge ruled that State Farm failed to pay a family for the loss of their home, Mississippi Congressman Bennie G. Thompson has announced plans for a formal Congressional investigation. Thompson is the c hairman of the Committee on Homeland Security .

 

" This ruling is just the latest example of insurance companies engaging in a systematic effort to avoid paying Katrina victims for destruction caused by wind damage,” said Thompson, in a statement. “Congress will not sit idly by while insurance companies ― who are making record profits ― continue to shift the costs of this national disaster to the American taxpayer.

 

“ Working with other Committees of jurisdiction, I will be investigating the assertions that insurance companies are wrongfully passing the costs of Katrina onto an already-burdened federal flood insurance program . "

Where was Roy's famous CADO cap. He looks much better with it, LOL.