In This Issue:

- What Law Applies When A Flood-Related Disaster Hits?

- Farm Odors and Coverage Issues Arising from “Pollutant” Property Damages.

Excerpt from What Law Applies When A Flood-Related Disaster Hits?

In June 2011, we discussed the rising cost of a flood-related disaster and the difficulties insureds often face when trying to obtain flood insurance. In that article, we noted how, despite the potential hardships in acquiring flood insurance, flood insurance may be a necessity for many homeowners and businesses, since flood insurance is the only policy that covers direct damage from flooding. We also discussed that the National Flood Insurance Program (NFIP) is responsible for paying claims submitted under a flood insurance policy.

Since the federal government, through the NFIP, subsidizes the vast majority of flood insurance policies, and since private insurance companies generally only sell and administer these policies, it seems axiomatic that only federal law would apply when a dispute in regard to a flood insurance policy arises between the insured and the insurer. In fact, the standard NFIP flood insurance policy includes a provision that expressly states that “all disputes arising from the handling of any claim under the policy are governed exclusively by the flood insurance regulations issued by FEMA, the National Flood Insurance Act of 1968 . . . and Federal common law.” So all flood insurance disputes must be analyzed under federal law, right?