State Farm Wins Katrina Coverage Case

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A federal appeals court has upheld language in State Farm insurance policies used to deny Hurricane Katrina claims.

The policies cover wind but not water damage. The insurer says damage caused by a combination of the two is not covered because of “anti-concurrent cause” language in the policies, the Associated Press reports.

The New Orleans-based 5th U.S. Circuit Court of Appeals agreed with State Farm in yesterday’s ruling (PDF posted by the Biloxi Sun-Herald). The court ruled in a case filed by State Farm policyholders John and Claire Tuepker, whose Mississippi home was destroyed in the hurricane.

A statement by the Scruggs Katrina Group, which represented the policy holders, issued a statement that said the ruling was limited, the Biloxi Sun-Herald reports.

“Although the 5th Circuit held the [policy language] was technically ‘unambiguous,’ it severely limited its application only to cases where wind and water caused the exact same loss at the exact same time,” the law firm said in the statement. “That never happens in a hurricane.”

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