This year, Hurricane Ian swept through the Southeastern United States, causing extensive damage to property in the affected areas. While obtaining insurance recoveries for any loss can be a complex endeavor, recovery for hurricane loss is particularly complex, as it typically involves a mix of covered and excluded perils. Most standard homeowners or other property insurance policies provide coverage for wind-related losses, but exclude coverage for loss caused by flood. While some policyholders may have purchased standard flood insurance policies that provide coverage for flood losses; many have not. Whether the policyholder has a homeowner’s or general property policy, a flood insurance policy, or both, the question of recovery for damage caused by mixed wind and flood forces requires a complex analysis as both covered and uncovered causes may contribute to the damage to insured property.
Analyzing combined causes of loss
Where a loss stems from multiple causes, some covered and others excluded, coverage will depend on whether the causes are contributing, or separate and independent causes of loss.
Where separate perils combine to create one indivisible loss, these will be considered combined or contributing causes of loss and courts will generally apply one of two tests:
- A majority of jurisdictions apply the efficient proximate cause test. This test permits recovery for loss caused by a combination of covered and excluded perils when the efficient proximate cause, i.e. the primary event producing the loss, is a covered cause of loss.
- The concurrent cause doctrine, the minority approach, provides coverage for combined-peril claims so long as a covered cause of loss is a contributing cause of the loss, regardless of whether it is the primary cause or not.