In court, plaintiffs' lawyers are likely to claim negligence: Insurance agents and brokers didn't explain what an ACC clause is. According to one estimate at this year's s annual III meeting, less than half of those who buy a home insurance policy actually u nderstand what is included in their coverage. Even the chief executive of The Hartford, Liam McGee, said that agents haven't done a good enough job explaining their products.
Policyholders victimized by ACC and other legal language probably should have shopped around for a policy with fewer restrictive clauses, kept better track of their losses and, if possible, remained in their home with a measuring tape, camera and stopwatch to record what damage occurred at what time by wind and tide.
But all that is water under the floor, so to speak. Now the only answer may be to challenge your insurer in court, using a lawyer and an independent claims adjuster.
Even if the case is lost, it could be won later in another court. Since insurance is state-run, a state court decision may trump a federal one, as it did in Mississippi. The whole issue is now so "bastardized," in the words of Mark Bell in the
Connecticut Insurance Law Journal
, that lawyers seeking to find precedents will instead find an "untraceable mess."
Other states, other perils
If New York courts decide in favor of insurers, policyholders may still have the last word. New York Gov. Andrew Cuomo appointed J. Robert Hunter, CFA's director of insurance and a critic of tactics such as ACC, to a
commission on natural disasters.
And the state's Department of Financial Services says it is watching the situation and will "intervene" if the issue becomes problematic.
The more people hurt by ACC, the more likely politicians will take action, says Bach. Although Californians don't face hurricanes, earthquakes and mudslides are considered "uncovered perils." So it comes as no surprise that California has one of the nation's tightest restrictions on ACCs.