The 5th U.S. Circuit Court of Appeals today overturned a lower court decision that would have allowed a policy holder’s lawsuit to continue against Sate Farm Fire & Casualty Company for denied coverage after losses suffered by Hurricane Katrina.
State Farm used an “anti-concurrent cause” provision to deny coverage to hundreds of policy holders. Using the clause, the insurance company said if storm damage was caused by a combination of wind and flood water, it was excluded from coverage. Plaintiffs John and Claire Tuepker, a Mississippi couple, contended the anti-concurrent cause language was ambigious because another part of the policy expressly allowed coverage for wind damage and aspects of hurricane related events. A district court judge agreed and said the clause was unenforceable.
On appeal, a three judge panel for the 5th Circuit reversed.
Sources:
http://www.ca5.uscourts.gov/opinions/pub/06/06-61075-CV0.wpd.pdf
