New Orleans residents who had insurance policies that excluded water damage lose in court

Saw this on the net today:


NEW ORLEANS — Hurricane Katrina victims whose homes and businesses were destroyed when floodwaters breached levees in the 2005 storm cannot recover money from their insurance companies for the damages, a federal appeals court ruled today.

“This event was excluded from coverage under the plaintiffs’ insurance policies, and under Louisiana law, we are bound to enforce the unambiguous terms of their insurance contracts as written,” Judge Carolyn King wrote for a three-judge panel of the 5th U.S. Circuit Court of Appeals.

As a result, the panel found those who filed the suit “are not entitled to recover under their policies,” she said.

More than a dozen insurance companies, including Allstate and Travelers, were defendants.

The decision overturns a ruling by U.S. District Judge Stanwood Duval Jr., who in November sided with policyholders arguing that language excluding water damage from some of their insurance policies was ambiguous.

Duval said the policies did not distinguish between floods caused by an act of God — such as excessive rainfall — and floods caused by an act of man, which would include the levee breaches following Katrina’s landfall.

But the appeals panel concluded that “even if the plaintiffs can prove that the levees were negligently designed, constructed, or maintained and that the breaches were due to this negligence, the flood exclusions in the plaintiffs’ policies unambiguously preclude their recovery.”

Court rules against Katrina victims in flood insurance case

Who in their right mind would NOT buy insurance that covers flood damage if you live in a flood prone area like the bowl we call New Orleans?

No one would.

Then again, if you live in a flood prone area – you can’t get regular insurance coverage for water damage. You must buy flood insurance from the federal government.

My guess is average people don’t know that and I also guess that some of that info may have been withheld so the broker could make a sale on the policy. It wouldn’t be the first time.