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Katrina Still Wreaks Havoc – from Water Damage to Insurance Damage
Hurricane Katrina still blows ill-wind in Louisiana these days. The Louisiana Supreme Court rejected contentions of homeowners that insurance companies should pay for water damages resulting from levee breaches at the height of Hurricane Katrina. The state high court’s reason: water damage was brought about by floods which are not covered in the insurance policy.
The 2005 calamity accounted to around $100 billion in water damage and the death of at least 1,836 people, making it the costliest natural disaster in US history and the deadliest U.S. hurricane since 1928, when the Okeechobee Hurricane (also called Hurricane San Felipe Segundo) killed at least 4,078 people. Three years have passed but the effects of Hurricane Katrina are still very much felt by Louisiana residents. The extensive water damage wrought by Katrina in the area has left thousands of displaced people still dwelling in tents. Recovery from water damages has been slow for these people.
Now, it seems their miseries have even intensified with the recent Supreme Court decision that reversed the verdicts of both the state trial and appeals courts regarding the New Orleans resident Joseph Sher’s hazard insurance claim against Lafayette Insurance Co. This is another major blow to Katrina’s victims who would welcome any form of consolation for traumas suffered from Katrina’s water damage. And insurance pay out would have been a great help.
Hundreds of policyholders have cases still pending in lower courts. These claimants for water damage were watching the Sher case closely and were hoping that the Supreme Court would support the plaintiff’s argument that the definition of the word "flood" was ambiguous in Sher's insurance policy with Lafayette. The state trial and appeals courts decided earlier in favor of the claimant but the higher court decided that Sher’s homeowner policy was not ambiguous and it stated clearly the exclusion of coverage for a flood, also adding that lower courts overlooked the “plain, ordinary and generally prevailing definition” of the word “flood.”
The Supreme Court also reasoned out that the meaning of flood does not depend on whether the cause of a large amount of water engulfing an otherwise dry area is a natural disaster or caused by man. Flood or not, man-made or not, the policyholders felt the effects of water damages keenly and felt they should have to be compensated.
The state law says that if the stipulation of policies being used by the insurance industry is found to be unclear, the interpretation of the policy holder will be favored. This won’t be the case for the poor water damage victims of Katrina. It was a unanimous decision from all seven Supreme Court Justices. Hapless homeowners may rue the day Katrina ravaged their homes and wrought extreme water damage, but the Supreme Court decision was but copying a similar ruling from the 5th U.S. Circuit Court of Appeals which has all three Texas judges agreeing to uphold that “a flood is a flood”.
While water damage may be at the heart of the issue, politics seems to rule this case, as many sees the decision as a compromise to keep insurance companies from leaving the Louisiana market altogether, at the great expense of water-damaged victims.
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National Weather Alerts
Winter Weather Advisory issued February 09 at 4:06PM AKST expiring February 10 at 5:00AM AKST by NWS Anchorage http://pafc.arh.noaa.gov
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Wind Chill Advisory issued February 09 at 2:14PM AKST expiring February 10 at 11:00AM AKST by NWS Fairbanks http://pafg.arh.noaa.gov
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