- Anticipated damage from Hurricane Harvey is expected result from wind, wind-driven-rain, and flood. Under most policies, damage caused exclusively by wind or wind-driven rain is recoverable, but damage caused exclusively by flood is excluded or sub-limited. Where possible, Louisiana courts apportion between wind damage and flood damage.
- Where the same damage results from more than one cause of loss (i.e., an “indivisible” loss), Louisiana employs the “efficient proximate cause” doctrine.
- The efficient proximate cause doctrine permits an insured to recover for losses caused by an excluded peril if the covered peril is found to be the dominant cause of the loss. The efficient proximate cause doctrine can result in extensive litigation between the parties to determine the dominant cause of the loss.
- To avoid the issues associated with the efficient proximate cause doctrine, insurers commonly include anti-concurrent causation language. Typical anti-concurrent causation policy language provides:
We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss. These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area.
. . .
g. Water
(1) Flood, surface water, waves, tides, tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not . . .
- With respect to damage likely to have been sustained during Hurricane Harvey, if the insured is able to prove its property sustained damage from wind and rain, the burden shifts to the insurance carrier to prove that flooding also caused, concurrently or in any sequence, the damage at issue.
- If the carrier establishes that the excluded peril contributed to cause the same damage (an “indivisible” loss), the loss will likely be excluded by the anti-concurrent causation wording.
- If the insurer is unable to meet its burden (or the evidence is found to be insufficient), the anti-concurrent causation wording likely will not preclude coverage.
- Whether damage is capable of being segregated or is “indivisible” is often the subject of dispute. Prudent adjusters and insurers should thoroughly investigate and document the damage, through photographs and video, and expert assistance may be required.
For more information, please see "Hurricane Harvey and Concurrent Causation in Louisiana," authored by Jennifer Gibbs, published in Insurance Law360. Should you have any questions, please contact Jennifer Gibbs at jgibbs@zelle.com.
Posted by Jennifer Gibbs
Posted by Jennifer Gibbs
