Flood exclusions may not apply when floods are preceded by winds strong enough to independently cause the loss, according to a recent decision issued by the Western District of Louisiana. In Doxey v. Aegis Security Ins. Co., No. 2:21-CV-00825, 2021 WL 2383834 (W.D. La. Jun. 10, 2021), an insured sought coverage for wind damage sustained to his home by Hurricane Laura under a property insurance policy that excluded coverage for damage “caused by, contributed to or aggravated by” flooding. The policy also contained an anti-concurrent causation clause, which excluded losses caused by excluded perils “regardless of any other cause or event contributing concurrently or in any sequence to the loss.” The insurer denied coverage under the flood exclusion on the grounds that the covered structures were completely displaced and destroyed by the storm surge that followed the wind.
In support of its denial of coverage, the insurer provided an engineering report, which concluded that “it is more probable than not” that the covered structures were first damaged by winds and then “completely displaced and destroyed by the estimated 16.6 foot storm surge.” To contest the denial, the insured relied on an affidavit from an engineer, who opined that the wind force was sufficient to total all of the structures before the storm surge arrived.
Applying Louisiana law, the court denied both parties’ motions for summary judgment. The court noted that, according to the insured’s expert, the wind – a covered peril – was powerful enough to independently destroy the insured property before the arrival of the flood. Therefore, a question of fact existed as to whether the storm, an excluded peril, in any way caused or contributed to the loss. Accordingly, the court allowed the coverage dispute to proceed to trial.
Following the Doxey ruling, insurers should be cautious about relying on anti-concurrent causation clauses to deny coverage if a possibility exists that a covered peril was sufficient to independently cause the loss before the excluded peril arrived. In the context of flood exclusions, this means verifying that the winds preceding the flood left enough of the property intact that the subsequent flood at least contributed to the claimed loss.