Insurers Drop Man-made Floods from Policies

According to a recent report by the Times-Picayune, insurers plan to specifically exclude flooding caused by man, such as levee and dam breaches. Insurers opted to change their policies as a result of Hurricane Katrina related litigation over engineering failures in the levee system.

The change will begin taking effect for homeowners and businesses across the country and extend to Guam, Puerto Rico, and the Virgin Islands in January 2009.

The impact of the policy change remains to be seen. Just as an example, much of southern Louisiana's wetlands are controlled by some form of man-made systems. Does that effectively rule out flood insurance for half of the state?

If levees send rising water downstream and cause a flood in a community with no levee system further down a river or on a tributary, does that constitute man-made flooding?

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