Impact of Hurricane Ian

When Hurricane Ian made landfall as a Category 4 storm last month, it had windspeeds that reached 150 mph, tying it for the fourth-strongest hurricane in history to strike Florida. The destruction was severe, with many analysts pointing to a minimum of $20 billion in insured losses. Days after the storm, we spoke with Taylor L. Davis, partner at Clyde & Co US LLP, who has written about hurricane claims challenges, to get her initial thoughts on what insurers can expect.

As we speak, Hurricane Ian is just exiting Florida. What are your initial thoughts on the storm?

The fact that we almost made it through September 2022 without a major storm had us all hoping for a benign hurricane season. But, of course, Ian turned out to be a very strong storm, nearly a Category 5, with high storm surge and heavy wind and rainfall. It has had, and will continue to have, a major impact on Florida and beyond.

You wrote a piece for CLM Magazine’s September 2022 issue that looked at the legislative and regulatory changes to property insurance that Florida recently implemented. How effective do you think these changes will be?

Some of the recent legal changes are likely to cause shifts in the claims and litigation trends of years past, and some probably will not. For example, the law on repair versus replacement of roofs should reduce the number of full-scale roof replacements. On the other hand, the new notice requirement seems unlikely to reduce the volume of lawsuits filed in the wake of this storm.

Given the flooding damage that we’re seeing, is anti-concurrent causation policy language likely to come into play?

Anti-concurrent causation language may well come into play with Hurricane Ian claims. The Florida Supreme Court held in Sebo v. American Home Assurance Co., Inc., 208 So. 3d 694 (Fla. 2016) that because the insurer did not “explicitly avoid” applying the concurrent causation doctrine, the policy did not preclude recovery for the insured’s claimed damage caused by excluded and covered causes, including defective construction, rain, and wind.

What other issues do you feel may come up during the adjustment and litigation process?

Much of the state is without power and will be for some time. Given the humidity in Florida and the lack of air conditioning in the coming days or weeks, mold growth is likely. There may also be a scarcity of resources and labor to complete repairs. On the litigation front, it will be interesting to see whether the recent changes relating to assignment of benefits result in fewer assignments than in years past and whether the restrictions on recovery of attorneys’ fees will affect litigation strategy.