The interplay between wind and flood coverage after a catastrophic storm is always of interest to Hawaii insurance law because we live in a state prone to hurricane damage. The latest case to address the dichotomy between wind and flood coverage is Ragas v. State Farm Fire and Casualty Co., 2008 U.S. Dist. LEXIS 10285 (D. La., Feb. 11, 2008).
Hurricane Katrina’s high winds and flooding from damaged the insured’s home in New Orleans. State Farm paid the limits of her flood policy, $105,000. The insured also filed a claim under her homeowner’s policy, which covered wind damage. After State Farm inspected, it paid $28,183.43 for wind damage.
The insured then filed suit, claiming her home was rendered a total loss prior to any flooding. She demanded the limits of her homeowner’s policy ($90,090 for structural damage and $61,425 for contents). State Farm argued this would amount to a double recovery. The insured’s complaint claimed her total damage was $112,450; State Farm had already paid a total of $133,183.43.
The Court sided with State Farm, a determination that seems logical and correct. The insured was not entitled to a windfall, double recovery by now re-characterizing as wind damage those losses for which she had already been compensated by previously attributing to flood waters. The insured could not retain the flood payments while seeking damages under her homeowner’s policy for the very same losses for which she had already been compensated under her flood policy. Therefore, the insured was precluded from claiming and receiving additional amounts for structural damage under her homeowner’s policy.