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Court Denies Katrina Homeowners Insurance Coverage

A three-judge panel of the 5th U.S. Circuit Court of Appeals ruled today that hurricane Katrina victims whose homes were destroyed when levees broke are not entitled to coverage under their homeowner insurance policies. The policies contained exclusions for coverage of water damage due to flooding.

The decision overruled a lower court decision that found the insurance policies’ exclusions were ambiguous, since they didn’t distinguish between flooding due to acts of God and those caused by man. The appeals panel found the distinction between the cause of flooding irrelevant and found the policies to clearly exclude all water damage due to flooding. Today’s ruling is expected to save insurers $1 billion.

Source:

http://www.msnbc.msn.com/id/20093139/