In THE PERFECT STORM: The Science Behind Subrogating Catastrophic Flood Losses, floods expert witness Richard Van Bruggen writes:
Most standard property policies and flood policies contain subrogation clauses which prohibit the insureds from giving up any rights to recover from any entities that may be responsible for a flood loss. Impairment of an insurer’s subrogation rights, which should be looked for in contracts, leases, or other agreements which the insured entered into, discharge the insurer from any obligation to make a payment under the policy. This became a big issue with Hurricane Katrina.
Owners and mortgagee should be careful not to sign releases that might impair the subrogation rights of their insurers.