When does misrepresentation turn to fraud?
Misrepresentation?
When MetLife sold us content and loss of use insurance that included hurricane coverage, we thought we were covered for anything having to do with a hurricane. That is, we thought we were covered for anything that would normally be associated with a hurricane by a reasonable person.
The fact that there was no policy present, when we accepted the coverage over the phone, means we had to rely on full disclosure at the point of sale. Given MetLife NOW maintains our policy did not cover hurricanes, but only the wind associated with a hurricane, we believe they originally misrepresented the terms of their coverage. You are welcome to look at the cover page for our coverage here copied from MetLife’s web site. Scroll down to about the middle where two lines on the left list our deductibles. Would you think you had hurricane insurance?
Fraud?
This is the exclusionary statement MetLife relied on to deny our claim for both loss of contents and loss of use:
1. WE do not insure under any Section I coverage for any loss which would not have happened in the absence of one or more of the following excluded events. We do not insure for any such loss regardless of: (a) the cause of the excluded event; or (b) other causes of the loss; or (c) whether such causes acted at the same time or in any other sequence with the excluded event to produce or contribute to the loss.
D. Water Damage, meaning any loss caused by, resulting from, contributed to or aggravated by: 1. Flood, surface water, waves, tidal water or overflow of any body of water, or spray from any of these, whether or not driven by wind;
The way we read this, MetLife does not insure any loss which would not have happened in the absence of surge (spray from surge) that contributed to or aggravated such a loss, regardless of the time line of events.
That is, according to our reading, MetLife is not going to cover any loss of contents or loss of use on the coast due to hurricanes (at least not for a second floor condo in a six floor building)!
1. For winds to be of hurricane strength and strong enough to cause minimal building damage that might allow wind into a dwelling to destroy some contents (not much damage), there would, according to the National Hurricane Center and the Saffir-Simpson Scale (here), be a surge of 6-8 feet! That is, damage to windows and doors is not associated with anything less than a Category 2 hurricane which normally drives a surge of 6-8 feet. Gulf Coast residents live just above sea level. A surge of 6-8 feet would put water in many resident’s front and back yards.
2. Clearly a surge of 6-8 feet would produce spray that would contribute to and aggravate any wind damage to contents! The wind speed necessary for the minimal building damage associated with a category 2 hurricane is around 100 mph. Such winds would certainly send spray everywhere. To date, we know of no hurricane that was not associated with a storm surge and the spray that accompanies both surge and high winds.
3. Further, to cause loss of use, winds would need to be at least 155 mph (probably much higher). Fortunately, for MetLife such winds would be accompanied by a surge of more than 18 feet. Consequently, it appears MetLife would not cover the loss. Indeed, there would never be a situation where coastal winds were that high and there was no surge. Even trees that were uprooted and blown into someone’s home would have been pulled from ground that had been softened by surge.
4. In essence, MetLife offered no hurricane coverage at all to many coastal condominium residents, unless they were high enough in a building (we were on the second floor) to not be subject to spray from the surge. Even then, anything blown out of the building would fall into surge waters below, which would certainly contribute to and aggravate any damage (salt water is corrosive). That is, winds strong enough to cause loss of use by blowing everything out of a sixth floor condo would, by definition, blow everything into the surge below and void content coverage. The only time MetLife’s policy makes sense for condominium owners, is if it covers the contents (and loss of use) of a building that is far enough inland that there is no accompanying surge!
The issue seems quite simple. Clearly, here is the kind of catastrophic loss we wanted to be insured against and thought we had insured against. Can you imagine a reasonable hurricane scenario able to cause such a catastrophe due only to the forces of wind? Can you imagine a lesser catastrophe caused by hurricane force winds that were not accompanied by any surge or spray from surge (on the coast)?
As MetLife likes to advertise - Now that’s Insurance!
The question that begs to be answered:
How can they sell hurricane coverage and collect premiums, when there is no circumstance (for many coastal residents) under which the insurance companies would have to pay the full amount (a half, a third, or even a quarter) of our insured loss. That sounds like more than misrepresentation; it sounds like it just might be outright fraud to us. What do you think?