Trends in Weather-Related Insurance Filings in Federal Courts – Insurance



The United States federal justice system periodically publishes reports (called “Just the Facts”) dealing with trends facing the federal justice system. On November 16, 2021, the US courts released their latest “Just the Facts”, natural disasters. This latest report focuses on insurance cases (defined as cases alleging breach of an insurance contract) from fiscal year 2000 to fiscal year 2020 and the relationship between these cases and natural disasters. As a caveat, although this latest report does not clarify, it appears that the “statements” refer to the original statements. and actions deleted.

So what does the data show? Not surprisingly, deposits increase after weather disasters, typically a year or two after the event. For example, after Hurricane Katrina hit the Louisiana and Mississippi Gulf coasts in 2005, insurance claims peaked in fiscal 2007 and 2008 in the past 20 years, the Eastern District of Louisiana reporting more insurance claims in FY06 and FY07 and FY08 than any other US district court.

Likewise, following Storm Sandy in 2012, insurance claims increased in the District of New Jersey and the Eastern District of New York. A large percentage of those Sandy’s filings were for claims filed under flood insurance policies issued under the National Flood Insurance Program. In 2017, in the aftermath of Hurricane Harvey, which made landfall in Texas, and Hurricane Irma, which hit southern Florida, fiscal year 2019 saw the Southern District of Texas and the Southern District of Florida directing all other district courts in insurance cases, many of which also involved flood policies.

A surprising fact about this latest “Just the Facts” is that after Hurricane Maria, which devastated Puerto Rico in 2017, there was no spike in insurance claims in the Puerto Rico District. The reason for this lack of peak deposits is unclear, but it could be due, in part, to Puerto Rico’s 15-year limitation period for breach of contract claims (which has since been changed to 4 years). for contracts executed after 2020). So, we could still see an increase in insurance deposits in Puerto Rico in the future.

The time between a catastrophic weather event and an increase in the number of insurance claims depends on several factors. The statute of limitations in each state is one of the driving forces behind the deadline for filing an insurance-related lawsuit. In addition, the legislation sometimes comes after catastrophic weather events that lead to an increase in litigation. But, overall, it appears that increases in insurance claims are a common result following catastrophic weather events.

Of course, more recently federal courts have been inundated with insurance cases dealing with coverage for COVID-19 issues. While these filings do not fall under the “weather catastrophe” category and apparently weren’t included in this recent “Just the Facts”, federal court data for FY20 and FY21 is expected to show a similar spike in insurance deposits.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.



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