Just the Facts: Insurance Case Filings Spike After Natural Disasters
Just the Facts is a feature that highlights issues and trends in the Judiciary based on data collected by the Judiciary Data and Analysis Office (JDAO) of the Administrative Office of the U.S. Courts. Comments, questions, and suggestions can be sent to JDAO.
In the U.S. district courts, filings of civil cases involving insurance typically have surged following weather catastrophes. Over the past 20 years, devastating hurricanes and severe floods have resulted in the Eastern District of Louisiana processing the most insurance cases of any district court. Spikes in filings following weather-related disasters also have occurred in other states, including New York and New Jersey after Superstorm Sandy, and Texas and Louisiana after Hurricane Harvey.
Background
Civil cases addressing insurance are actions alleging breaches of insurance contracts.1 These cases involve disputes related to car insurance, life insurance, or less common types of insurance, such as flood insurance. Following weather catastrophes, U.S. district courts often help resolve disputes involving insurance claims. Map 1 displays insurance filings by judicial district between fiscal year (FY) 2000 and FY 2020.
Facts and Figures
- Over the past two decades, annual insurance case filings have ranged from 7,459 to 13,496 filings annually, as indicated in Figure 1 below. Between FY 20002 and FY 2020, the highest numbers of insurance cases were filed in FY 2007 and FY 2008. In each of those years, the Eastern District of Louisiana reported more insurance case filings than any other district court, with totals of 5,438 filings in FY 2007 and 4,708 filings in FY 2008. In Figure 2 below, the circuit and district heat maps display monthly and annual insurance filings for each U.S. district court.
- Some insurance filings involve flood insurance, a type of insurance managed by the Federal Emergency Management Agency (FEMA). The National Flood Insurance Program (NFIP) was established following the enactment of the National Flood Insurance Act of 1968 (NFIA; 42 U.S.C. §4001 et seq.). The NFIP makes flood insurance policies available to property owners in high-risk areas, often through government-approved private insurers. The NFIP also maintains flood hazard zone maps and adopts standards for floodplain management to reduce flooding in high-risk areas.3 A flood insurance claim can be appealed within one year of an initial denial and must be filed in the district where the damages occurred (42 U.S.C. § 4072, 44 C.F.R. § 62.22).
- Figure 3 displays NFIP claims filed from FY 2000 to FY 2020. During this period, more than 100,000 claims were submitted in each of three years: FY 2005, FY 2013, and FY 2017. The large numbers of claims filed during these years stemmed primarily from the effects of Hurricane Katrina, Superstorm Sandy, and Hurricane Harvey, respectively.
- Weather disasters vary with regard to the magnitude and duration of their impacts on civil caseloads in the federal courts. Some events, such as Hurricane Katrina, can create large spikes in filings years after the disasters occur. Other disasters may have less significant impacts on the courts due to regional differences in insurance laws and coverage.4 Local laws may affect how insurance cases move through the courts.5 Following weather disasters, legislation may be passed to provide additional relief to people who suffered damage from the disaster, leading to spikes in filings long after the weather events end.6
- In FY 2005, 251,618 NFIP claims were submitted (see Figure 3 below), primarily as a result of losses associated with Hurricane Katrina.7 In the next three years, the Eastern District of Louisiana received more insurance cases than any other district court, with filings totaling 1,885 in FY 2006, 5,438 in FY 2007, and 4,708 in FY 2008 (see Figure 2 below).
- In FY 2013, 168,850 NFIP claims were filed (see Figure 3 below), largely as a result of Superstorm Sandy.8 In FY 2014, the district courts with the highest numbers of insurance cases were the District of New Jersey with 1,442 filings and the Eastern District of New York with 1,295 filings. The District of New Jersey also received the most insurance cases of any district court in FY 2015, with 693 filings.
- In FY 2017, 168,842 NFIP claims were filed (see Figure 2 below), largely as a result of the destruction caused by Hurricane Harvey and Hurricane Irma throughout the southern and eastern United States. In FY 2018, the Middle District of Louisiana processed 1,184 filings,9 the Southern District of Florida had 794 filings, and the Southern District of Texas received 691 filings (see Figure 3 below). In FY 2019, the Southern District of Texas and the Southern District of Florida had the most insurance case filings of all districts, with 1,131 and 1,012 filings, respectively.
Note: Click on the tabs below to view the figures and map.
1 Here an insurance case is an action alleging a breach of an insurance contract, tort claim, or other cause related to an insurance contract, except for a maritime insurance contract.
2 In the Judiciary, the fiscal year runs from Oct. 1 – Sept. 30. All data sources in this document use this fiscal year calendar for reporting.
3 For more information on flood insurance, visit the Federal Emergency Management Agency flood insurance website: https://www.fema.gov/flood-insurance. Retrieved March 11, 2021. For information on the National Flood Insurance Program, see the following Congressional Research Service report: U.S. Congressional Research Service. Introduction to the National Flood Insurance Program (Jan. 5, 2021), by Diane P. Horn and Baird Webel. https://crsreports.congress.gov/product/pdf/R/R44593. Retrieved March 11, 2021. For more details on federal disaster assistance, see U.S. Congressional Research Service. Federal Disaster Assistance: The National Flood Insurance Program and Other Federal Disaster Assistance Programs Available to Individuals and Households After a Flood (July 31, 2018), by Diane P. Horn. https://crsreports.congress.gov/product/pdf/R/R44808. Retrieved March 11, 2021.
4 Hurricane Maria, which devastated Puerto Rico and other Caribbean islands in Sept. 2017, has not to date caused a spike in insurance case filings in the District of Puerto Rico.
5 Following Hurricane Katrina, Superstorm Sandy, and Hurricanes Harvey, Irma, and Maria, legislation addressing disaster relief was passed by state and federal governments. For more information on The Post Katrina Emergency Reform Act of 2006, the Sandy Recovery Improvement Act, and the Disaster Recovery Reform Act of 2018, see the following report from the Congressional Research Service: U.S. Congressional Research Service. The Disaster Relief Fund: Overview and Issues (Nov. 13, 2020), by William L. Painter. https://crsreports.congress.gov/product/pdf/R/R45484/25. Retrieved March 11, 2021.
6 The “Road Home” litigation in the Eastern District of Louisiana resulted in a large increase in insurance cases in 2013, eight years after the Hurricane Katrina occurred.
7 iii.org/fact-statistic/facts-statistics-flood-insurance#National%20Flood%20Insurance%20Program,%201980-2018%20(1). Retrieved March 11, 2021.
8 iii.org/fact-statistic/facts-statistics-flood-insurance#National%20Flood%20Insurance%20Program,%201980-2018%20(1). Retrieved March 11, 2021.
9 The spike in filings in the Middle District of Louisiana during FY 2018 was related to catastrophic flooding that occurred in the state during Aug. 2016.
Related Topics: Statistics