Flooding, tornados, severe storms, and other catastrophic losses present unique complications when evaluating potential for subrogation recovery. In 2011, there have been many catastrophic losses: flooding in Australia with 35 fatalities and overall losses at $7.3 billion; severe storms and tornados affecting Missouri, Oklahoma, Arkansas, Minnesota, and Kansas, including a devastating twister that leveled the town of Joplin, Mo. on May 22. There were 170 fatalities
related to U.S. severe storms, with overall losses at $7 billion.
Separately, 330 tornados hit five southern states between April 22 and 28, 2011, impacting towns in Mississippi, Oklahoma, Georgia, and Tennessee, resulting in 350 fatalities, with overall losses at $7.5 billion. New England also sustained a 6. 3 magnitude
earthquake, resulting in 181 fatalities and overall losses estimated at $20 billion. The
enormity, scale and shortage of available resources in the loss areas further complicate
CAT Subrogation Training
Most property insurers have CAT team members pre-designated to respond to catastrophic losses. Those CAT teams should receive pre-deployment subrogation issue-spotting training, which should occur prior to responding to the loss site to ensure
potential subrogation opportunities are evaluated by the on-scene CAT team member.
It is important to keep in mind the basis for subrogation, which was developed to
ensure a party who causes a loss is held responsible. It is not a rigid concept; it changes
as justice dictates. As one court noted, “Subrogation advances an important policy ra-
tionale underlying the tort system by forcing a wrongdoer who helped to cause a loss
to bear the burden of reimbursing the insurer for payments made to its insured as a
result of the wrongdoer’s acts and omis-
sions.” State Farm Gen. Ins. Co. v. Wells
Fargo Bank, N.A. (2006) 143 Cal.App.4th