Insurers, policyholders brace themselves for Hurricane Laura claims

Insurers, policyholders brace themselves for Hurricane Laura claims

| Sep 10, 2020 | Insurance law

The destruction of Hurricane Laura, the category 4 storm that ripped through Louisiana last week, has been catastrophic. In addition to displacing numerous people and claiming 10 lives, the hurricane also wrought an estimated $4 to $7 billion in property damage.

As survivors struggle to pick up the pieces of their lives, they also face the long road of filing insurance claims to recover compensation for their damages. Likewise, insurance companies nationwide are bracing themselves for the inevitable onslaught of claims. Louisiana courts will face heightened public scrutiny as well as pressure to award coverage to hurricane victims.

Courts and insurers face public pressure

The public places massive scrutiny and pressure on courts and insurance providers alike to find coverage for victims, even if a policy does not stipulate it. Cases in which the court would typically favor defendants may tip toward the favor of the plaintiff. In situations where a policy has two or more reasonable constructions, courts tend to favor coverage.

For example, Louisiana allows unambiguous flood exclusions in insurance policies. As long as a policy has a clear plain-language flood exclusion, the court will likely enforce it. However, high-profile natural disasters such as Hurricane Laura can sometimes prompt courts to grant more leeway to claimants.

What providers and claimants should consider

As the claims roll in, insurance companies should put extra consideration into the coverage they grant. Though a clause may deny coverage at face, the provider should weigh whether a disputed claim may result in litigation that could result in an unfavorable verdict.

Claimants who receive a denied claim or a settlement they feel is unjust may have a better chance of success at trial. They may also have greater power in negotiations with their insurance provider.