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Home / Insurance / Collapse from storm surge — Will National Flood pay these claims? | Property Insurance Protection Law Blog

Collapse from storm surge — Will National Flood pay these claims? | Property Insurance Protection Law Blog



Champlain Towers was a warning to aging condominiums to inspect and immediately repair structural compromises. Hurricane Nicole warned last week of structures along shorelines – will the structures be able to withstand rising sea levels and storm surges?

A New York Times the article went to the point:

As of Friday evening, Volusia County had ordered the evacuation of 27 condominiums and hotels, 22 of them in Daytona Beach Shores and five in New Smyrna Beach. They had been endangered by breached seawalls and water intrusion, prompting authorities to evacuate thousands of residents, according to county officials. Another 30 homes in Wilbur-by-the-Sea, an unincorporated community just south of Daytona Beach Shores, teetered on the edge of the dunes.

These condominiums and hotels were not structurally challenged and then evacuated due to wind damage from Category 1

Hurricane Nicole. Previous beach erosion from Hurricane Ian and storm surge from Hurricane Nicole are the initial short-term causes of damage. The rising sea level is the long-term secondary cause.

Flood insurance is the obvious coverage that most people think of when these losses occur. But will the National Flood Insurance Program pay for these losses?

Look at this language:

We do not insure for property loss directly caused by earth movements even if the earth movement is caused by flooding. Some examples of ground motions that we do not cover are:

1. Earthquake;

2. Landslide;

3. Land Settlements;

4. sinkhole;

5. Destabilization or movement of land resulting from accumulation of water in underground land areas; or

6. Gradual erosion.

We fought many of these insurance coverage battles in Hurricane Katrina, Hurricane Ike and Superstorm Sandy. We noted that New York’s governor came up with a financial aid program after Superstorm Sandy hit Governor Cuomo Announces Plan to Compensate Superstorm Sandy Victims Denied Coverage Based on FEMA Regulation:

Many Sandy victims were prevented from recovering from their flood losses despite having flood insurance under the National Flood Insurance Program (NFIP) based on what is commonly known as the “earth movement” exclusion. This exclusion, found in Paragraph C of the Exclusions section of every Standard Flood Insurance (SFIP)…

Thus, damage caused by movement of earth or soil is not eligible for coverage under the NFIP even if the movement was directly caused by flooding. As a result of this exclusion, many Sandy victims have been displaced and unable to rebuild their homes.

Governor Cuomo’s Home Rebuilding Program aims to address this gap in coverage by providing for rebuilding costs not covered by the FEMA plan. The program will be funded by federal hurricane grants and will provide much-needed funding directly to eligible homeowners.

I have no idea why we arguably allow the National Flood Program to not cover hurricane storm surge under these circumstances. I cannot predict the future, but the past warns of what may happen. This is another example of the need for reform of our national flood program.

Today’s thought

The basis of positive change, as I see it, is service to a fellow human being.
—Lech Walesa

The song of a flood


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