Judge: Insurance policy excluded flood damage

[Guest guest]

Judge: Insurance policy excluded flood damage

Ruling could set a precedent for hundreds of other court challenges

http://news.netscape.com/viewstory/2006/08/15/judge-rules-new-

orleans-flooding-not-covered-by-insurance/?url=http%3A%2F%

2Fwww.msnbc.msn.com%2Fid%2F14362386%2F & frame=true

GULFPORT, Miss. - A federal judge ruled Tuesday that an insurance

company's policies do not cover damage from flood waters or storm

surge in a decision that could affect hundreds of upcoming cases

related to property damage from Hurricane Katrina.

U.S. District Judge L.T. Senter Jr. ruled that a Mississippi Gulf

Coast couple cannot collect damages from storm surge caused by

Katrina because Nationwide Mutual Insurance Co.'s policies do not

cover wind-driven water damage.

Senter Jr. said and Leonard of Pascagoula could be

compensated for damage that they could prove was caused by high

winds, however.

" Almost all the damage to the Leonard residence is attributable to

the incursion of water, " Senter wrote in the 13-page decision.

Senter's ruling could set a precedent for hundreds of other court

challenges to the insurance industry for denying billions of dollars

in claims after the Aug. 29 hurricane ravaged the coasts of

Louisiana and Mississippi.

Although Senter ruled that Nationwide's policies do not cover damage

from storm surge, the judge also concluded a key policy provision

the company has used to deny coverage is ambiguous.

Nationwide and other insurers say their homeowners policies cover

damage from a hurricane's wind, but not in cases where it resulted

from a combination of wind and water.

" This reading of the policy would mean that an insured whose

dwelling lost its roof in high winds and at the same time suffered

an incursion of even an inch of water could recover nothing under

his Nationwide policy, " he wrote.

" From our perspective, it lifts a very large cloud of uncertainty

that has been hanging over the insurance market of the Gulf Coast, "

ph Annotti, spokesman for the Property Casualty Insurers

Association of America, said in reaction to the ruling. " A healthy

insurance market is absolutely key to a rejuvenated economy down

there. "

Shares of most property and casualty insurers rose following the

ruling, amid a generally surging stock market.

" It's a favorable first decision for the industry, " said Fox-Pitt

Kelton analyst Ransom. " I never really had much doubt that this

was the way it was going to work out. There's a lot of precedent for

this. It's not like we're interpreting these contracts for the first

time. "

The Leonards had estimated the total damage to their home at

$130,253. They said $47,365 in damage was caused by wind. Nationwide

paid only $1,661, blaming the remainder on the storm surge.

The couple's attorneys had asked for more than $158,000 for the

damage to the house and its contents, plus interest and attorneys'

fees and expenses. Senter, however, ruled that Nationwide only owed

the Leonards about $1,228 more than what the company already has

paid them for wind damage.

Both sides claimed victory in the wake of Senter's ruling.

" The Leonards did not win as much money as I hoped they would have,

but they won this case, " said one of their attorneys,

" Dickie " Scruggs. " It's always great to get a win in the

first game of the season, whether it's by one point or 30 points. "

Leonard, a police lieutenant, acknowledged that an extra $1,228

only covers a fraction of the repair costs for his home, but he also

considered Senter's ruling a victory.

" I believe anybody in a civil trial asks for the moon and is able to

live with what they get, " he said.

The Leonards claimed a Nationwide agent, Jay Fletcher, told them

they didn't need flood insurance.

Senter rejected the Leonards' claim that the agent's alleged

assurances make Nationwide liable for damage from both wind and

water. Leonard mistakenly inferred that his policy covered

water damage, the judge ruled.

" Fletcher did not materially misrepresent the terms of the

Nationwide homeowners policy to the Leonards, and Fletcher did not

make any statements which could be reasonably understood to alter

the terms of the Nationwide policy, " Senter wrote.

The couple's lawsuit was the first among hundreds of Katrina

insurance cases to be tried since the storm slammed into the Gulf

Coast nearly a year ago, demolishing tens of thousands of homes.

Senter presided over an eight-day trial without a jury last month.

He is hearing virtually all the Katrina insurance cases in

Mississippi, so his ruling will be scrutinized by thousands of Gulf

Coast homeowners as well as the nation's top insurers.

[Guest guest]

I'd like to know why there was not a manditory flood policy included

with their insurance from the get go. swamp ground, they knew sooner

or later, oops I forget, this is insurance we are talking about. not

the helping hands, roof over your head,shelter when you need it kind

of thing, but the double talk full of crap policies that in the end

cover zilch, and you never get what you pay for. really makes me

never want to have insurance again! just take those payments, put

them in a can and dig a

hole.

>

> Judge: Insurance policy excluded flood damage

> Ruling could set a precedent for hundreds of other court challenges

>

> http://news.netscape.com/viewstory/2006/08/15/judge-rules-new-

> orleans-flooding-not-covered-by-insurance/?url=http%3A%2F%

> 2Fwww.msnbc.msn.com%2Fid%2F14362386%2F & frame=true

>

> GULFPORT, Miss. - A federal judge ruled Tuesday that an insurance

> company's policies do not cover damage from flood waters or storm

> surge in a decision that could affect hundreds of upcoming cases

> related to property damage from Hurricane Katrina.

>

> U.S. District Judge L.T. Senter Jr. ruled that a Mississippi Gulf

> Coast couple cannot collect damages from storm surge caused by

> Katrina because Nationwide Mutual Insurance Co.'s policies do not

> cover wind-driven water damage.

>

> Senter Jr. said and Leonard of Pascagoula could be

> compensated for damage that they could prove was caused by high

> winds, however.

>

> " Almost all the damage to the Leonard residence is attributable to

> the incursion of water, " Senter wrote in the 13-page decision.

>

> Senter's ruling could set a precedent for hundreds of other court

> challenges to the insurance industry for denying billions of

dollars

> in claims after the Aug. 29 hurricane ravaged the coasts of

> Louisiana and Mississippi.

>

> Although Senter ruled that Nationwide's policies do not cover

damage

> from storm surge, the judge also concluded a key policy provision

> the company has used to deny coverage is ambiguous.

>

> Nationwide and other insurers say their homeowners policies cover

> damage from a hurricane's wind, but not in cases where it resulted

> from a combination of wind and water.

>

> " This reading of the policy would mean that an insured whose

> dwelling lost its roof in high winds and at the same time suffered

> an incursion of even an inch of water could recover nothing under

> his Nationwide policy, " he wrote.

>

> " From our perspective, it lifts a very large cloud of uncertainty

> that has been hanging over the insurance market of the Gulf Coast, "

> ph Annotti, spokesman for the Property Casualty Insurers

> Association of America, said in reaction to the ruling. " A healthy

> insurance market is absolutely key to a rejuvenated economy down

> there. "

>

> Shares of most property and casualty insurers rose following the

> ruling, amid a generally surging stock market.

>

> " It's a favorable first decision for the industry, " said Fox-Pitt

> Kelton analyst Ransom. " I never really had much doubt that

this

> was the way it was going to work out. There's a lot of precedent

for

> this. It's not like we're interpreting these contracts for the

first

> time. "

>

> The Leonards had estimated the total damage to their home at

> $130,253. They said $47,365 in damage was caused by wind.

Nationwide

> paid only $1,661, blaming the remainder on the storm surge.

>

> The couple's attorneys had asked for more than $158,000 for the

> damage to the house and its contents, plus interest and attorneys'

> fees and expenses. Senter, however, ruled that Nationwide only owed

> the Leonards about $1,228 more than what the company already has

> paid them for wind damage.

>

> Both sides claimed victory in the wake of Senter's ruling.

>

> " The Leonards did not win as much money as I hoped they would have,

> but they won this case, " said one of their attorneys,

> " Dickie " Scruggs. " It's always great to get a win in the

> first game of the season, whether it's by one point or 30 points. "

>

> Leonard, a police lieutenant, acknowledged that an extra

$1,228

> only covers a fraction of the repair costs for his home, but he

also

> considered Senter's ruling a victory.

>

> " I believe anybody in a civil trial asks for the moon and is able

to

> live with what they get, " he said.

>

> The Leonards claimed a Nationwide agent, Jay Fletcher, told them

> they didn't need flood insurance.

>

> Senter rejected the Leonards' claim that the agent's alleged

> assurances make Nationwide liable for damage from both wind and

> water. Leonard mistakenly inferred that his policy covered

> water damage, the judge ruled.

>

> " Fletcher did not materially misrepresent the terms of the

> Nationwide homeowners policy to the Leonards, and Fletcher did not

> make any statements which could be reasonably understood to alter

> the terms of the Nationwide policy, " Senter wrote.

>

> The couple's lawsuit was the first among hundreds of Katrina

> insurance cases to be tried since the storm slammed into the Gulf

> Coast nearly a year ago, demolishing tens of thousands of homes.

>

> Senter presided over an eight-day trial without a jury last month.

> He is hearing virtually all the Katrina insurance cases in

> Mississippi, so his ruling will be scrutinized by thousands of Gulf

> Coast homeowners as well as the nation's top insurers.

>