Law 360

Homeowners, businesses and other policyholders impacted by Hurricane Harvey’s destructive impact need to begin considering how their insurance coverage may assist in their recovery from the storm. Following a major storm, policyholders and insurance companies inevitably find themselves in disputes about historically complex issues, such as the cause or causes of the property damage (and whether they are covered or excluded), valuing the loss, and the relative responsibilities of the policyholder and insurer. A challenging issue many policyholders will also need to consider is whether there was a single or multiple occurrences (or events) due to Hurricane Harvey making multiple landfalls in Texas and Louisiana. The answer to that question will directly impact the amount of each insured’s insurance recovery.

Even seemingly clear policy language defining an “occurrence” can be difficult to apply, if a large hurricane such as Harvey causes extensive damage due to various weather elements over an extended time period, with multiple landfalls. Here, because Harvey made multiple landfalls and caused damage to property during a multiday period, Hurricane Harvey will present some policyholders with the opportunity to present their claim as a loss caused by multiple occurrences. Thus, some insureds may have the opportunity to access additional or multiple limits, albeit with the potential for multiple deductibles or retentions to apply.

From the insurers’ perspective, there may be an effort to minimize the amount of coverage available for losses caused by Hurricane Harvey by limiting the policyholder’s claim to a single occurrence (i.e. a single limit of liability). Some insurers may improperly attempt to require a policyholder to incur more than one deductible or retention before providing any coverage. Where a deductible or retention is very large relative to the size of the loss, application of multiple deductibles or retentions can be akin to a denial of coverage.

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