Friday, August 3, 2007
On August 2, 2007, the 5th Circuit decided In re: Katrina Canal Breaches Consolidated Litigation, No 07-30119, ___F. 3d ___(5th Cir. 2007) which is a 52 page slip opinion holding that policyholders in Louisiana are not entitled to insurance coverage under homeowners, renters or commercial property policies for flood damages caused by breaches in New Orleans’ levees during Hurricane Katrina.
The panel reasoned that even if the policyholders could prove that the levees were negligently designed, constructed or maintained, the flood exclusions in the policies clearly preclude coverage regardless of what caused the flooding. Most insurance policies exclude coverage for floods
“Regardless of what caused the failure of the flood-control structures that were put in place to prevent such a catastrophe, their failure resulted in a widespread flood that damaged the plaintiffs’ property. This event was excluded from coverage under the plaintiffs’ insurance policies, and under Louisiana law, we are bound to enforce the unambiguous terms of their insurance contracts as written,” the panel said.
Mitchell H. Rubinstein