Insurance Coverage Turns On Distinction Between Flood Damage And Mechanical Issue

dsc05934_0-scaledDealing with the aftermath of a flood is never fun. This is especially true when the flood damages one of your vehicles. This is the situation Michael Jacobs found himself in after one of his cars was damaged in a flood. After a long fight with his insurance company, he eventually prevailed and was awarded damages. 

Jacobs owned multiple vehicles that GEICO insured. His parish in North Louisiana was affected by heavy flooding. When the flooding started, Jacobs and his brother tried to move the vehicles from his house to higher ground but were unable to remove them before the floodwaters rose, so they could not drive up to the house. Jacobs waded through the floodwater to retrieve one of the vehicles, a 2001 Honda Accord. In the days following the flood, the Honda kept overheating. Jacobs claimed this had only occurred after the flood. 

Jacobs submitted a claim to GEICO for the damage to the vehicle. The insurance inspector did not identify any flood-related problems and determined the upper radiator hose had blown out. Another mechanic gave Jacobs an opinion and concluded there were issues with his spark plugs. GEICO ultimately denied Jacobs’ claim because it had suffered a mechanical failure that was not flood-related. Jacobs filed a lawsuit against GEICO, alleging his Honda had been damaged from the flooding. At trial, the court ruled the Honda had suffered water damage and awarded vehicle property damages and attorney fees. GEICO filed an appeal.

On appeal, GEICO argued the trial court erred in finding it was liable because the relevant insurance policy had not been provided as evidence. The trial court record indicated GEICO had not raised issues related to insurance coverage at trial. GEICO had also not objected to letters it had sent to Jacobs recognizing “flood damage” insurance being entered as evidence. Therefore, the assumption at trial was Jacobs had flood damage coverage but not coverage for mechanical issues with the vehicle. An appellate court will generally not consider issues raised for the first time on appeal. See Costello v. Hardy. As a result, the appellate court held that the insurance policy was not introduced as evidence did not make the ruling wrong.

GEICO also argued the trial court erred in finding the flood had damaged the Honda. The appellate court pointed to conflicting testimony at trial from different witnesses about the cause of the Honda’s damage.  An appellate court can only overturn a trial court’s factual finding if it is manifestly erroneous or clearly wrong. See Cole v. State, Dept. of Public Safety and Corr. The trial court appeared to have found the witness who testified the flooding had caused the Honda’s damage to be more credible. Because there was nothing clearly wrong or erroneous in the trial court’s finding, the appellate court did not disturb the trial court’s finding.

As seen here, although GEICO initially denied Jacobs’ claim, Jacobs prevailed at trial. If you feel like your insurance company has improperly denied a claim, an experienced attorney can advise you on possible legal remedies. 

Additional Sources: Michael J. Jacobs v. GEICO Indemnity Co.

Article Written By Berniard Law Firm

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