2 Key Katrina Insurance Cases Go Before Louisiana’s Highest Court

February 27, 2008

  • February 27, 2008 at 11:29 am
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    he’s 92 years old and a holocaust survivor. (Age corrected as per yesterday’s local news report)

  • February 27, 2008 at 1:31 am
    caveat emptor says:
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    No insurance company has never approached the water issue with a more common sense approach. Instead of putting it in the policy, require the insured to sign a waiver as an endorsement to the policy, written in very plain english that states that under no circumstances whatsoever will any water damage be covered to your real or personal property, regardless of the cause or source of the water. They should also include language to the effect that the insured agrees he has been advised of the availability of flood insurance and that it is his ONLY option for coverage of water damage but has chosen not to get that coverage. Of course, that would mean rain through a broken window and the like would now not be covered but it’s a small price to pay to avoid all doubt on the water issue.
    Just my thought I guess…I know nothing about contract law except that in auto insurance we use waivers all the time and they hold up well in court.

  • February 27, 2008 at 1:40 am
    lastbat says:
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    The waiver bit makes sense to me.

    I thought they settled this last year; that a flood is a flood no matter the source. I must be wrong on that one.

  • February 27, 2008 at 1:52 am
    Tom says:
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    The federal district courts and court of appeals all along the Gulf have ruled, usually in well-written and exhaustively researched decisions, that a flood is a flood is a flood…..

    The research covers literally dozens of cases from all over the country, spanning decades, and they all say the same thing.

    Apparently the plaintiffs believe that the state judges in Louisiana have a totally different view of the English language, regulatory approvals, judicial process, etc. Unfortunately, so far they have been right. I’m not sure whether the state courts are corrupt or incompetent, or both, but this situation is nothing short of absolute insanity.

    Does anyone really think the insurance industry is going to have any interest in doing business in Louisiana if the state supreme court doesn’t get this right?

  • February 27, 2008 at 1:59 am
    N. Judge says:
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    They didn’t put it in the policy because they thought flood encompassed all flood. And certain water damage is covered. If you said the policy doesn’t cover you for “ordinance or law regulating the construction, repair, or demolition of a building or other structure…”, if you didn’t say an ordinance for repair of the roof, would you think that would be excluded or that you would have to specifically name what type of repair for the exclusion to apply?

    The Federal appellate court said a flood is a flood. Here the LA Supreme Court gets to have the final word on how state law will be applied. The federal courts will have to follow unless the US Sup. Ct takes the case. On State law, that is unlikely.

    When is flood not a flood: maybe when nature causes the levies to break and your home is inundated with water. Could have fooled me but it won’t be the first time. Seems to me, no matter how you slice this, it was caused by mother nature. But for Katrina, these homes would not have flooded. We can only hope the Justices do the right thing and recognize that they all had the chance to purchase flood insurance. I met a woman who had her home repaired by flood insurance money because she refinanced shortly before Katrina and her finance company insisted she have flood insurance. Where was everyone else? Lott has a $6M beach home but he doesn’t think he needs flood insurance? He didn’t want to pay for it.

  • February 27, 2008 at 2:04 am
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    I wonder why they couldn’t make carrying flood insurance at equal limits, part of the homeowners underwriting requirements. It would certainly help the homeowner’s carriers with some headaches. Flooding happened before, and it will happen again.

    http://www.geocities.com/twincousin2334/NO_1947_hurricane

    http://www.geocities.com/twincousin2334/NO_Betsy.html

    http://www.geocities.com/twincousin2334/Soul_of_a_City

  • February 27, 2008 at 2:17 am
    Tinkerbell says:
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    The max flood on bldg you can buy is $250k & $100k max applies to contents in personal residential properties. If flood is attached to a home that is valued @500k and it is totalled in a flood loss, in order to be fully compensated, the owner would have to buy excess flood. Excess flood is not subsidized by the feds. This is dicey. B/C in this scenario, don’t you think a legal battle would ensue b/c the homeowner would want the HO portion of the policy to pay the damages so he could be made reasonably whole again?

    As for a water damage waiver, that would not work. What homeowner would agree to having any & all water damage claims excluded? A typical water damage claim that is covered by the HO contract is a burst pipe. This type of loss causes a flood in the house that IS covered by the typical HO form. Why would you want to give up that coverage?

    The water damage waiver will not work. It seems to me that the HO contract language clearly states that flood losses are excluded and then defines ‘flood’. What more do these people want? They chose not to buy flood coverage in the first place & now expect the HO carrier to pay flood losses? Ridiculous this sense of entitlement that pervades American society. I agree that insurers who denied claims that should have been paid should be taken to task for bad faith, but I don’t believe losses where an explicit exclusion appears should be paid. You want to talk about mass exodus of insurers from the market.

  • February 27, 2008 at 2:48 am
    N. Judge says:
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    I like the idea of requiring a flood policy but some of these folks had flood insurance, oddly enough. With large deductibles for hurricanes, other exclusions they still weren’t made 100% whole. And some just want to double dip. The future is going to be taken care of because a lot of insurers will pull out until they can feel they’re not going to have to cover something they did not intend to cover. The question will be how many will survive anywhere if they are made to pay for these losses, particularly if the VPL is said to require the insurer to pay full policy limits. A lot riding on the outcome of these cases.

  • February 27, 2008 at 5:38 am
    R. Giessner says:
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    “One thing is certain: the Louisiana Supreme Court makes Louisiana law, not the 5th Circuit,” Garner said.

    That’s an interesting statement. The legislative process makes the law in most states. Must be the ideal situation for lawyers.

  • February 28, 2008 at 2:40 am
    SP says:
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    Unfortunately, flood insuurance does not always make you hole. In many states, including California, the max limits on flood are ridiculously low. It is almost a waste of money on a $1mm home.

    After every flood disaster there will be extensive court cases over flood vs. water vs. fire, etc until the NFIP program increases their limits and all homeowners are required to carry flood.



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