Florence is the first major hurricane in the Atlantic season and is expected to cause some $18 billion in damage. There could be more. August through October is often the most active hurricane period. By the time Florence hit, it was only a category one hurricane, the least destructive, and it was soon downgraded to a tropical storm. However, the storm then slowed to a crawling 2 m.p.h. while dumping rain and with sustained winds of 50 m.p.h.
Who knows when the next one will strike? What we do know is that the number and intensity of storms are rising. Some blame climate change and there’s plenty of evidence that climate change is causing more hurricanes. But the cost of cleaning up after a hurricane is increasing as well, and it’s not just because there are more storms. More people are moving to areas likely to be impacted by hurricanes despite the risks. Also, we own larger houses and more property than in years past and our homes are more densely packed. Thus, when a hurricane hits us now it costs far more than it used to in the past.
You would think with the national attention that hurricanes get that people would not buy property in hurricane-affected areas. But there is a phenomenon called “hurricane amnesia”. People forgot how destructive hurricanes can be because they rarely make landfall and cause damage. Top this off with more people who have never even experienced a hurricane moving to coastal cities in search of jobs, retirement, or lifestyle and you have the makings for an economic disaster.
Many homeowners think that if they get a good insurance policy then it doesn’t matter. They’ll cover the cost of the damage and people can continue to live in hurricane-prone areas. However, there’s a sneaky clause that homeowners may find that their insurance policies are refusing to cover damages caused by hurricanes. This is because of something hidden in many insurance policies called the “ACC” clause.
What is the ACC clause? ACC stands for anti-concurrent cause. Many homeowners policies have ACC clauses. Basically, an ACC clause works like this: if a policy covers flood damage but does not cover wind damage and the flood and wind damage are the result of the same storm, the policy does not have to cover either. The order in which the damage occurs is irrelevant. And since hurricane damage is a combination of strong winds and flooding, sometimes this clause is used to escape payment.
This has become especially problematic as more and more people move to hurricane areas. Insurers are being forced to tighten up contracts and raise deductibles. Many insurance contracts contain so much legal jargon that a policyholder may not even be aware their policy contains an ACC clause.
“Consider have an attorney explain terms and clauses you don’t understand before buying insurance,” says Jim Parrish, a personal injury lawyer in Fairfax, VA. “Clauses like these are becoming more common in insurance policies as the companies try to control costs.”