A public adjuster told Porters Neck CC in Wilmington, N.C. that it suffered more than $7.5 million in losses from Hurricane Florence, and that at least $6 million was covered by its insurance policy. The insurer paid $750,000 in November 2018 and refuses to pay more. The debate hinges on whether the damage was covered by wind and rain or by flooding, which was not covered by the policy. A similar suit filed in 2018 by Grey Oaks CC is awaiting a federal court’s decision on whether Grey Oaks’ insurer breached its policy.

Porters Neck Country Club in Wilmington, N.C. is taking legal action against its insurance company, claiming it owes the club more than $6 million to cover property damage from Hurricane Florence, station WECT in Wilmington reported.

The club also claims the insurance company authorized destruction of evidence that would prove it was required to pay for repairs, according to the WECT report. The club’s attorneys filed a civil action on March 20 outlining the complaints and requesting a trial by jury in U.S. District Court.

“[Porters Neck Country Club] has taken on substantial debt to finance the repairs, but available funds are nearly exhausted and [the club] is in dire financial straits,” the complaint stated.

In the legal documents, Porters Neck CC outlines its grievances against Allied World Assurance Company Inc., which was providing insurance coverage for the club when Hurricane Florence made landfall in September 2018, WECT reported.

“[The insurance company] has wrongfully and in bad faith refused to pay [the club’s] claim,” the complaint reads.

The dispute centers around whether most of the hurricane damage was caused by wind and rain, or by flooding, WECT reported. The club’s insurance policy did not cover damage by flooding.

“Multiple structures at the club were severely damaged, including the clubhouse, a 25,000- sq. ft. building at the heart of the club,” the complaint reads. “The clubhouse suffered severe damage on its first and second floors, due to high winds that damaged the roof and windows on both floors, and wind-driven rain that subsequently intruded into both floors through the damaged roof.”

The club’s maintenance office, pool bathroom, snack bar building, sports center, tennis courts and golf course were also damaged by the hurricane, WECT reported. Several days after the storm, a generator broke, causing a pond on the property to overflow, which caused more damage, according to the documents submitted with the lawsuit.

Porters Neck CC submitted a notice of loss on September 15 to the insurance company, according to the documents. A public adjuster told the club it suffered more than $7.5 million in losses and that at least $6 million was covered by the insurance policy, WECT reported.

The insurance company paid $750,000 in November 2018 and “refused to pay the remainder of the covered loss based in part on the policy’s flood exclusion, despite the club having been fully and completely damaged by wind and wind-driven rain days before any flooding occurred at certain structures,” the documents stated.

Based on guidance from the insurance company, the club hired a loss-mitigation company during the repair process, WECT reported. The club alleges the insurance company authorized the loss-mitigation company to remove or destroy clubhouse property that would show that wind and rain, not flooding, caused damage.

The insurance company has also not paid the club any money to cover the cost—more than $1.4 million—of engaging the loss-mitigation company, the documents stated.

Porters Neck CC said it has made multiple attempts to request clarification and payment from Allied World Assurance, which sent two aerial photographs and the opinion of its expert as evidence that flooding was the cause of the damage, according to the complaint.

“The club has lost current and prospective members,” the complaint added.

Porters Neck has also lost revenue from cancellations of weddings, parties and other paid events because of property damage, WECT reported.

“[The insurance company’s] legally and factually unsupported denial of coverage has forced [Porters Neck Country Club], a nonprofit corporation, into dire financial straits,” the compliant reads. “[Porters Neck Country Club] took out a substantial line of credit to finance the repairs, but that line is nearly exhausted and [Porters Neck Country Club] will very likely be unable to secure additional financing.”

WECT reached out to Allied World Assurance Company Inc., and a spokesperson replied that the insurer did not have a comment.

In a statement sent to WECT, a spokesperson for Porter’s Neck Country Club reiterated its claims against the insurance company and offered assurances that the club continues to offer services to members.

A restaurant at the country club is reopening April 5, according to its newsletter, and golf course repairs are ongoing.

“Repairs to the club are nearly completed, and they should be finished before the summer golf season,” the club’s statement reads.

“Our insurance carrier needs to meet its obligations to the club,” said Dave Adams, Porters Neck’s current President. “The insurance carrier’s failure to make payment on our claim is causing financial strain on this club. It is unfair and wrong.”

Added Marc Tingle, Porters Neck’s General Manager and COO: “We understand other clubs in our area are experiencing similar insurance claim problems coming out of Hurricane Florence. But the good news is that our members and guests are playing golf today and will continue to be able to use the club facilities, as the repairs are incrementally completed. We will be ready for the busy summer season, despite the insurance carrier failing to uphold its obligations to us.”

In a similar case, a Florida federal judge has ruled that Grey Oaks Country Club cannot yet press its claim that Zurich American Insurance Co. acted in bad faith by paying only $3.9 million of its “eight figure” demand for losses stemming from Hurricane Irma, saying the court must first decide whether the insurer breached its policy. Zurich also is accused of misrepresenting policy provisions and failing to adequately investigate the Grey Oaks’ claims.

“Zurich has made every effort to avoid its contractual obligations and force Grey Oaks into accepting a fraction of what is rightfully owed under the policy,” Miami attorney Walter Andrews wrote in the complaint filed Sept. 26, 2018 in Fort Myers federal court.