NEW YORK, Aug 31 (Reuters) - As the water recedes from Hurricane Irene, lawyers are expecting disputes over coverage to pour in.

The biggest fights will stem from arguments over property damage and whether it resulted from wind or water -- like Hurricane Katrina six years ago -- legal experts said. Disputes over the extent of coverage and the reimbursement amounts also are expected as property owners deal with soggy basements, shattered windows and tree-beaten roofs.

Battles over who pays for what will start funneling into state courts, federal courts and arbitration forums in the coming months, said attorneys and scholars. But the first step in the process will be for policyholders to make a claim. "A flood of claims may lead to a river of litigation," said Tom Baker, a professor at University of Pennsylvania Law School who teaches courses on insurance law.

Homeowners insurance policies usually cover wind damage, but they do not cover flood damage. And while homeowners in flood-prone areas usually are required by mortgage providers to buy separate policies issued through the National Flood Insurance Program, property owners in other areas -- including those in upstate New York, Connecticut and Vermont -- often don't have flood insurance. Insurance companies historically have not provided flood insurance because of widespread and costly destruction created by floods.

Insurance policies can be hyper-detailed and insurance laws vary state-to-state, so it's difficult to predict exactly when any litigation will begin. But most cases are bound to be very fact-specific, with coverage hinging on experts and eyewitnesses, said Wayne Lee. He is a partner New Orleans-based Stone Pigman Walther Wittmann and represented insurers defending class actions after Hurricane Katrina. One issue "extensively litigated," he said, was whether wind-driven flooding-including storm surges -- was covered by flood insurance. Generally speaking, it wasn't. "Courts, at least in Louisiana, said a flood is a flood," Lee said. More difficult questions, he said, arise when a home has been completely swept away. Determining the cause of the destruction is tough when nothing is left.

Another factor that will affect the volume of litigation is whether individual jurisdictions allow policyholders to recover attorney's fees, said Amy Bach, executive director of United Policyholders, an insurance consumer advocacy group. Parameters vary widely, however, based on factors such as the dollar amount of claims. New York, Vermont and North Carolina, for example, usually allow attorneys to recover costs and fees, but the standards for recovery are different in each state.

"If I can't recover my attorney's fees, I'm probably not going to bring the case," Bach said.

Individuals with separate policies for homeowners insurance and flood insurance could find themselves in both state and federal court, Lee said. Federal courts have exclusive jurisdiction over disputes arising from coverage under the national flood insurance program. A fight over a claim made against an insurer based in the same state as the policyholder could end up in state court.

It's also conceivable that states could consolidate lawsuits with a particular judge or establish arbitration forums, Baker said, although it is too soon to know. What differentiates Irene from other hurricanes is that she struck densely-populated regions of the upper East Coast, said Michael Troisi, a partner at Rivkin Radler in Uniondale, N.Y. His practice focuses on insurance defense. With more claims being made, more disputes will arise, he said. He also said that residents had a lot of preparation time, which may have reduced damage.

Disputes over claims are by far the exception, said Baker. "Insurance companies have their reputations to consider," he said. Even so, the lawsuits are coming. And when they'll be resolved? "It could be years," he said.

(Reporting by Leigh Jones)

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