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Oil could be covered by federal flood insurancePosted On Mon, June 7, 2010
The recent oil spill in the Gulf of Mexico had many people worried about the consequences of a hurricane blowing some of that oil inland.
But, Louisiana Insurance Commissioner Jim Donelon told radio station WWL 870, FEMA-administered flood insurance will cover both damage and cleanup costs from oil that lands inland as a result of a storm.
"It is clear as day to me, that the oil in the water, if it is part of the flooding of an insured building, will be covered by a flood insurance policy," Donelon told the station. He also noted that FEMA has yet to take an official stance on the matter.
However, damage to yards or any other part of the property that is not part of the home structure itself will not be covered, he told the station. Any such damage could require legal action against British Petroleum, he said.
A Wall Street Journal article said that the oil spill, along with the volcanic ash in the North Atlantic, might provide insurance companies with enough justification to raise their rates for some kinds of coverage.
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