A report in The Times-Picayune discusses different scenarios where insurance coverage has been denied in the aftermath of Hurricane Katrina and efforts to reverse the findings.

Greg Brady's house in the Barker's Corner area of rural northern St. Tammany Parish was virtually destroyed by Hurricane Katrina when trees crashed into the roof.

His homeowner's insurance policy would certainly cover the damage, Brady thought.

He was wrong.

Brady said he has been denied coverage because an insurance adjuster found cracks in the house's concrete slab and concluded that soil subsidence had compromised its structural integrity before the hurricane hit.

Citing a little-known clause found in most Louisiana homeowners' insurance policies, his insurer said that because the alleged soil subsidence is excluded from his coverage, he can't collect for the tree damage to his house, Brady said.

The clause, the bane of many Hurricane Katrina victims, is likely to become the focus of a pitched battle in the legislative session beginning March 27.

This week, Brady's soft-spoken, unemotional recitation of his ordeal seemed to galvanize more than 80 residents on hand Monday in Mandeville for the first of two public forums put on by a consumer activist group pushing for insurance policy reform in Louisiana. More than 70 people attended the second session Tuesday in Slidell.

Legislators on board

State Sen. Julie Quinn, R-Metairie, who introduced legislation at the special session in February to strike the "double anti-concurrent causation" clause, attended the sessions. After passing the Senate, most of Quinn's bill was eliminated by a House insurance committee during a hearing she said was stacked with insurance lobbyists.

The only portion of her bill that survived and has been signed into law is language that says insurance companies cannot automatically reject a claim based on a water line or if a house was knocked off its foundation. But she said that alone does not prevent them from still using the clause to deny payments.

Quinn said she will sponsor a new bill in the upcoming session that would strike the clause from all homeowners polices issued in Louisiana.

State Rep. Tim Burns, R-Mandeville, is sponsoring the legislation in the House.

"We have a huge battle on our hands and we need the voices of the people who are being denied claims for damage because of this clause," Quinn said. "You need to come to House and Senate insurance committee hearings when my bills come up and let them hear you. A lot of our legislators in areas not impacted by Katrina and Rita don't believe this clause is being used to deny payments."

Quinn and a team of consumer activists used the two forums to gather names and contact information to enlist people when they are needed.

Denying payment

"Using this clause, the insurance companies can deny claims if they can assert that 1 percent of your damage was the cause of a condition excluded from coverage. In most cases we are hearing, they are saying flooding was the cause and it is excluded even if 99 percent of your property was destroyed by wind," Quinn said.

And if the homeowner has no flood insurance policy to fall back on, he or she could be out of luck.

In Brady's case, alleged soil subsidence, not water, is at the heart of the battle.

He is convinced his slab was not cracked before Katrina, and that the force of trees smashing his roof led to the crack. "But they say that can't be proven, that the cracks that exist now are enough to apply the clause and deny me payment. I am now facing the only recourse left and that is to file a lawsuit," he said.

Several others, from St. Tammany Parish and other ravaged parishes, told similar stories.

Kenneth Campo said his Shell Beach house was destroyed by a tornado before the floodwaters rose. He said he has been denied any damage claim because when insurance adjusters arrived, they found water standing over the rubble of his house and his insurer applied the exclusion clause.

More horror stories

One resident on Carr Drive near Slidell said engineers have told him that a tornado destroyed his home but when an adjuster found standing water in the ruins the resident was denied coverage. He said he did not have flood insurance because he was told his elevated house was high enough to be out of harm's way.

A woman from the West Bank of Jefferson Parish and one from south of Slidell told similar stories about wind destroying their homes, but adjusters using traces of water in the ruins to assert the damage was caused by flooding, which is excluded from their policies.

At both hearings, each of the repeated testimonials elicited loud groans and then applause and heads nodding in agreement that change is needed in the language of insurance policies.

Former Mandeville Mayor Bernard Smith, one of those leading the effort to strike the clause, said he has an eyewitness who saw his Lakeshore Drive home in Mandeville reduced to a pile of rubble by a tornado during Katrina before the storm surge hit the house. But he said his claim for total loss has been denied because an adjuster, who arrived after Hurricane Rita had flooded the lakeshore a second time, concluded that floodwater destroyed his home.

To view the online article please click on the following link.

FEMA Insurance Coverage Disputes Update