Posted On: August 16, 2006, 5:34 pm CDT

Posted By: Cat Adjuster

It is up to the policyholder - READ THE POLICY AND UNDERSTAND YOUR RESPONSIBILITY!!

As a Cat Adjuster, I see it over and over again - not just with regard to the Flood Exclusion in every standard Property Policy I have ever read - but also with regard to the limits they pay insurance on. People not only have to READ THEIR POLICY but have to keep tabs on increasing costs of rebuilding (something rarely done). It is truly heartbreaking to have to meet with an insured who has just lost their home and all their belongings to a fire or other insured loss and have to tell them that they are insured for only a fraction of what the replacement will be. Replacement cost endorsements (if you purchased one) sometimes covers the difference but usually for only a percentage on the building (ie - 20 or 30% extra) and rarely applies on the contents coverage.

The agent is always the first to be blamed but, for residential policies, it is extremely rare for an agent or insurer to send out someone to do the valuations. It is simply too expensive and the cost would be tacked onto premiums people are already complaining about.

In the future we may see requirements for policyholders to sign a waiver when they refuse additional coverages, such as Flood. This would be a good idea to protect the insurer and agent and to make the policyholder stop and think for a moment before he declines the coverage. Hopefully, the policyholder will realize the importance of these additional coverages. The agent cannot force someone to purchase coverage and it is ridiculous to think he would spend the time to try to talk them into it. His job is to simply offer it.

In any event, an insurance policy is a contract. Where else in business do people think they have the right to waive conditions on a contract that they have read and signed? What other business is there where, when handed a contract that they are supposed to read before signing, they feel that they can ignore reading and simply ask the agent what it means, and actually think they have a legal leg to stand on when something goes wrong?

As a police officer, Mr. Leonard should certainly be smart enough to read an understand the policy. When you live so close to the Gulf you have to expect the potential for flooding.

As far as "winning" the additional $1,200.00, I am sure the insurer would have been more than willing to look at additional wind damage costs. I suspect the judge allowed this so that the insurance company would end up paying for the Plaintiff's substantial legal costs, given what they were already out.

Finally, be thankful the ruling went the way it did. If the Leonard's were awarding the $158,000., how many insurers do you think would be left in this area of the U.S.?