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3 Key Insurance Questions Lingering after Florence


As Hurricane Florence's devastating floodwaters recede and residents of the Carolinas start picking up the pieces, many affected homeowners may find that their damage claims fall into gaps in their insurance, while some business owners may face resistance from insurers on claims for lost profits due to the interruption of their operations.


Homeowners lacking flood insurance in coastal areas may be able to secure coverage under their standard home policies if they can show that storm-force winds, which are generally a covered peril under such policies, contributed to their loss, experts say. However, Florence’s winds tapered off quickly as the storm pressed deeper into the Carolinas, so it is unlikely that homeowners further inland will be able to point to wind damage to press claims under standard insurance, according to Blank Rome LLP partner John Heintz.

“The fact of the matter is here, aside from the immediate areas around the coast that clearly saw wind damage, what we are really talking about is an extraordinary rain event with a huge amount of water,” Heintz said. “Some of the power outages were wind-driven, but it is flooding that is having a major impact.”

Will Florence Spur Flood Insurance Reform?

Florence’s destruction may stoke some lawmakers’ long-running efforts to overhaul the beleaguered NFIP, which is currently more than $20.5 billion in debt to the U.S. Treasury after years of payouts on hefty claims from ruinous storms such as hurricanes Katrina and Harvey and Superstorm Sandy, but experts say it is unclear whether Congress will have the appetite to plow ahead on comprehensive reform in the near future.

“The NFIP is in desperate shape,” said Alan Rubin, a member of Blank Rome Government Relations LLC’s severe weather emergency response team. “This is really a nationwide crisis. These dollars are eventually going to run out.”

"3 Key Insurance Questions Lingering after Florence," by Jeff Sistrunk was published in Law360 on September 19, 2018.