Insurers See Storm as Two Separate Events: separate "Great New Orleans Flood" could save insurers billions

AOL News - Insurers See Storm as Two Separate Events: "Insurers See Storm as Two Separate Events
By JOE BEL BRUNO, AP

NEW YORK (Sept. 9) - Insurers are potentially facing billions of dollars in losses from Hurricane Katrina claims, and battle lines have begun forming as carriers argue they aren't responsible for flooding excluded from standard homeowners policies.

The majority of homes in areas slammed by the hurricane have policies that cover wind and rain damage, but relatively few had extra insurance to cover flooding. Insurers are posturing to limit the amount of damages by saying massive flooding in storm-ravaged New Orleans is a separate event from the hurricane itself.

This distinction could save insurers billions of dollars more from a catastrophe billed as the costliest natural disaster ever to face the industry. Some carriers have even adopted the phrase "The Great New Orleans Flood" in an effort to make that distinction more tangible.