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For Katrina Insurer, One Win, One Loss

In the first federal trial over Hurricane Katrina damage, a Louisiana jury ruled against State Farm insurance company Wednesday, finding that wind, not water, destroyed the New Orleans home of plaintiffs Michael and Judy Kodrin. According to Associated Press:

The couple claimed winds destroyed their house hours before water topped a nearby river levee and flooded their Plaquemines Parish neighborhood in August 2005. But State Farm, which says its homeowner policies cover damage from wind but not rising water, denied the couple's claim, concluding storm surge destroyed the house.

The jury took more than four hours to reach a verdict after a two-day trial. The award remains to be calculated but is estimated to be $350,000.

Just the day before, the 5th U.S. Circuit Court of Appeals handed State Farm a Katrina-related victory. In Tuepker v. State Farm, the circuit court reversed the district court's refusal to dismiss a case brought by homeowners John and Claire Tuepker and upheld the insurer's denial of coverage under their policy. At Insurance Coverage Law Blog, David Rossmiller explains:

The Fifth Circuit ... reversed a lower court's ruling that State Farm's anti-concurrent cause language was ambiguous.  The court also upheld State Farm's flood exclusion as applying to hurricane storm surge, and said that the anti-concurrent cause language in State Farm policies overturns a common law doctrine of property loss causation called 'efficient proximate cause.'

Rossmiller calls the ruling both a huge win for State Farm and "a victory for clear, concise writing and reasoning."

Posted by Robert J. Ambrogi on November 9, 2007 at 05:37 PM | Permalink | Comments (0)

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