Katrina Victims Lose Insurance Appeal

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A federal appeals court ruled today against victims of Hurricane Katrina who sought insurance coverage for damage caused by broken New Orleans levees.

Exclusions for flood damage in the plaintiffs’ insurance policies “unambiguously preclude their recovery,” Judge Carolyn King wrote in her opinion (PDF) for the 5th U.S. Circuit Court of Appeals.

The plaintiffs had contended their damages were caused by negligent construction of levees rather than an act of God. They claimed their policies were ambiguous on the issue of coverage for floods caused by negligence and should be read to allow coverage.

The ruling by the New Orleans-based appeals court overturned a decision by U.S. District Judge Stanwood Duval Jr. that had found the flood exclusion was ambiguous, the Associated Press reports. Duval had said the policies didn’t distinguish between floods caused by an act of God and the negligence of man.

The appellate panel ruled in four appeals that were among more than 40 cases consolidated for pretrial purposes in the Eastern District of Louisiana.

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