Subrogation attorneys are seeing more property damage claims from natural disasters than ever before – a trend that will not slow down any time soon. Climate change isn’t just about warming; the damage to our environment throws everything else off – winds, currents, atmospheric CO2 – which is why we’re seeing extended hurricane seasons across the Gulf, snowfall in the South, uncontrollable wildfires from California to Canada, and rising sea levels toppling coastal homes into the ocean.
All this catastrophe leads to catastrophic influxes of high-cost claims for insurance carriers. And when the obvious tortfeasor is an agitated Mother Nature, there’s no avenue to recovering subrogation claims damages. Carriers face huge losses that cause them to hemorrhage money and curb property damage policies in order to stay afloat. But a second look at subrogation potential, even in these “acts of god” situations, can still reveal avenues to recover loss.
In this article, we provide a primer on the Act of God defense and discuss strategies for maximizing subrogation recovery in these disastrous property damage claims.
Understanding the “Act of God” Defense
The Act of God Defense is an affirmative defense meant to protect parties from liability when the cause of loss was a force of nature outside of anyone’s control. It typically applies to property damage claims for natural disasters, freak weather events, and things like fallen trees. It typically does not apply to property subrogation claims for fire or utilities.
Many courts don’t require case precedent to raise this defense, but they will look at whether or not the party(ies) did have control over or should have expected the situation. But it’s up to the carrier’s subrogation department or contracted law firm to look at whether or not nature was the only tortfeasor. And often, the subrogating party will find that at least part of the property damage is manmade.
For an in-depth discussion on the Act of God defense, read our article: When Finding a Liable Party in Your Subrogation Pursuit is a Divine Mystery, and the accompanying episode of our YouTube series On Subrogation: Act of God Defense.
Avenues to Subrogation Recovery After Hurricane Damage
High winds from hurricanes can result in millions of dollars in property damage claims overnight. In 2024, Hurricane Helene alone caused an estimated $250 billion in damages. According to the NOAA, from 2020-2022 there were 60 hurricane/cyclone events that caused over $1 billion in damages, with an average of 18 of these events per year.1
Between 1980 and 2022, hurricanes have caused well over $2.6 trillion in damage.1 A sizable chunk of that $2.6 trillion fell on insurance carriers handling private property damage claims. But just like there were major human-caused factors to why Hurricane Katrina so devastated New Orleans in 2005, there are measures carriers should take after each hurricane to determine liability in subrogation pursuit. Consider:
- What were sustained wind and gust wind speeds? Check these against roof and window ratings. Did they hold up to the specifications advertised?
- What was the total rainfall? Were safety features like flood barriers and drainage systems properly installed and maintained?
For instance, a Florida subrogation lawyer post-Helene should review engineering reports, maintenance records, NWS information on the storm, and other relevant information to identify possible liable parties. These could include contractors who installed hurricane-proof windows incorrectly, roofing manufacturers who sold products with defects, landlords who failed to properly maintain a levee outside an apartment building, etc.
Finding Potential for Subrogation After Earthquakes
Earthquakes are not something people immediately think of as affected by climate change, but they are. Melting of glacial ice changes the pressure on different tectonic plates, changing the activity at fault lines. Oil drilling and fracking also contribute to erratic seismic activity. This leads to high numbers and higher-intensity earthquakes that may affect areas not usually prone to serious shaking.
Besides damages caused from seismic activity, resulting landslides, debris flows, and subsidence can cause even more damage, leading to high-ticket claims for insurance carriers. In 2017, earthquakes caused the US $6.1 billion in damages. By 2023, that number had spiked to $14.7 billion.2 That’s several billions of dollars in private property damage claims literally swallowed by the earth. However, there are still places to look for liability, and reasons to take a second look at subrogation potential post-earthquake:
- Check the USGS rating of the earthquake. Was the building up to local seismic code and/or did it meet the specifications it promised?
- Did the building have seismic protection devices? If so, were they up to code and properly installed? Did the product have any defects?
There may be liability with a manufacturer, contractor, or even a utility company, if a poorly-maintained gas line broke during the event. When considering secondary effects of earthquakes like landslides, subrogation attorneys can look to the engineering quality of retaining walls, or adherence to the geological survey recommendations pre-construction.
Possibilities for Subrogation Claims Post-Wildfire
If there’s anything the last few years have taught us, it’s that we can no longer predict when or where wildfires will occur, let alone how much damage they’ll wreak. Consider California, whose dry climate and susceptibility to the Santa Ana winds contributes to their being the posterchild for US wildfires. But nowadays there’s more to it than that.
The LA wildfires of early 2025 are a perfect example of how a host of factors can come together at once to create a perfect storm – or devastating wildfire, in this case. California suffered a serious drought season. This caused overgrown vegetation – a purposeful wildfire safety measure – to essentially become tinder. Add gale force winds and you get absolute, uncontrollable catastrophe unlike anything we’d seen before.
For property damage claims that were not in the direct path of a wildfire, however, there may be opportunity for recovery with California’s subrogation laws. For instance:
- If a neglected power line arched as a result of a failure some miles away, or if they failed to de-energize the lines when the wildfire became imminent, there’s liability there.
- Another instance of possible liability would be if the city had failed to clear dead brush after tree trimming around a neighborhood’s power lines and traffic corners.
Unfortunately, natural disaster subrogation is one of the fastest-growing sources of insurance claims. While there is no way to recover all of your losses from these massive and complex natural disaster subrogation claims, failing to look into every detail of a case is a mistake. Carriers and subrogation attorneys must be proactive about their strategies so these potential financial disasters end up as potential sources of subrogation damages recovery.
Learn More About Rathbone Group’s Subrogation Services
References:
1NOAA