The Mississippi Supreme Court has overturned a judgment in favor of an insurance company in a wind versus water case. A Pascagoula home was hit by 6.3 feet of storm surge during Hurricane Katrina in 2005, resulting in severe damage. The National Flood Insurance Program paid Michael Robichaux and his wife, Mary, who has since died, policy limits for the loss of their home and its contents — $136,500 for the home and $70,400 for contents. At issue in the lawsuit was whether Nationwide Mutual Fire Insurance Co. owed the Robichauxes any money for wind damage.

It was contended in the lawsuit that the homeowners were owed at least $60,000. Nationwide denied their claims, but for different reasons than the company used in 2009 in an earlier wind versus water case. Even though Nationwide paid neighbors on each side for wind losses, the insurer claimed the Robichauxes had no such damage. Alternately, Nationwide argued the National Flood Insurance Program has already fully reimbursed the Robichauxes and that the homewoner can’t collect twice for the same loss.

The Mississippi Supreme Court ruled that the trial judge erred in dismissing the case. Justice Jim Kitchens, writing for the Court, said there were “genuine issues of material fact” over whether structures and personal property covered under the Robichaux’s policy “were damaged by wind prior to the destructive force of the storm surge.”

In the earlier wind versus water case, the Supreme Court decided Mississippi law requires insurance companies to prove that a hurricane’s tidal surge, rather than wind, caused a loss in order to deny coverage. Wind and water are separate forces, the Court reasoned, that cause different types of damage. Wind damage is covered under an all-perils policy.

In the Robichaux case, Nationwide contended storm surge caused all the damage to the home, based on expert reports. The case was remanded on the issue of whether wind was a proximate cause of damage prior to the destruction of the other structures and personal property by storm surge. The Court said Nationwide has the burden of proving that the other structures under Coverage B were damaged by an excluded peril. Justice Kitchens wrote in the opinion:

The converse is true with regard to the Robichauxes’ burden of proving that personal property under Coverage C suffered accidental, direct, physical loss as a result of one of the enumerated perils, namely windstorm.

This ruling by the Supreme Court is good news for policyholders who have had difficulty with their insurance companies. I am not sure how many claims will be affected by the ruling, but there are bound to be a good number.

Source: Insurance Journal