After a hurricane, assessing damage caused by different perils, such as high winds or flooding, is especially challenging when all that is left after the storm is a structure's foundation. For these properties, there may not be enough physical evidence to determine the extent to which damage was caused by wind versus flooding. Private property-casualty insurers typically cover wind damage but exclude coverage for flood damage. The National Flood Insurance Program, administered by the Department of Homeland Security's Federal Emergency Management Agency (FEMA), provides federally backed coverage for flood damage. After the hurricane season in 2005, legal disputes arose between private property-casualty insurers and policyholders over interpretation of policy language that excluded coverage of damage caused concurrently or sequentially by a covered peril-wind-and an excluded peril-flooding.
