I am just shocked

Closely on the heels of two hurricanes we now have the slimy trial lawyers moving in. They want to rewrite insurance policies to make the companies which have sold policies with flood exclusions for decades now pay for this form of damage. A tort kingpin by the name of Dickie Scruggs whose own home in Mississippi was damaged now promises to sue for deceptive business practices. He is arguing that since the wind pushed the water during the hurricane the flooding was in fact wind damage.This should be a non-starter since the policies exclude rising water no matter what caused it.

It is important for the insurance companies to win this battle. The way insurance works is the companies assess risk and when an incident occurs, they use the money gathered from the many to pay damage to the few affected. With flood insurance, the only people who will buy the coverage are those who have a risk to flooding. If it is found that legally, the companies writing policies for those in flood zones must pay regardless of exclusions written in plain English, they will be faced with bankruptcy and if they survive, they will have to charge all of us for flood damage, even if we live on mountain tops in the desert. The risk has to be spread in order to be real insurance.
There is an alternative, however. Rational insurance companies could well choose to simply stop writing policies in states like Mississippi where contracts are not worth the paper they are written on.