In light of the recent historic rainfall and flooding in South Carolina, Nexsen Pruet’s property subrogation and recovery team would like to advise you of potential subrogation opportunities that may otherwise go overlooked.
Generally, in the absence of flood insurance endorsements or specific coverage in their homeowners or property insurance policies, insureds will not have insurance coverage for flood-related damage due to express policy exclusions. However, even if flood insurance coverage exists, subrogation opportunities will be limited because the flooding will have been caused by historic rainfall, which defendants will attempt to characterize as an Act of God. In South Carolina, a valid Act of God defense defeats a viable subrogation claim, but the Act of God must be the sole cause of the damage.
If property damage is caused by rainfall and not by flooding, insurers may have a subrogation claim if there are construction deficiencies or other negligent work that caused or contributed to the property damage. For example, an insurer may have a viable claim if a defectively installed roof or other construction defect allowed rain to damage a house or its contents. This is especially true where construction is new or recent. Moreover, if flood damage in a particular area occurred because of some man-made work or developments, a viable subrogation claim may exist in a situation where flood coverage is provided in a policy. Each potential claim will need to be evaluated on its own merits.