Going to the Source of the Flood

A recent ruling by a federal appeals court has left Katrina victims essentially homeless nearly two years after a hurricane ravaged the Gulf Coast.

The ruling overturns a decision by a district court judge which said that insurance companies were responsible for covering damages that ensued from the flooding that occurred after the levees gave way in 2005. The insurance policy language, the district court judge ruled, was ambiguous in that it did not distinguish between naturally occuring floods and those resulting from faulty levees or human error.

However, the federal appeals court declared that although ambiguous the policy is very clear about excluding homeowners from protection against any sort of flooding. Obviously there is disagreement among the judges about how to interpret this insurance policy.

But apparently the policy and the text of the policy is quite clear. The text of the appeals court decision by Judge King reads:

"Each plaintiff in this case is a policyholder with homeowners, renters, or commercial-property insurance whose property was damaged during the New Orleans flooding. Despite exclusions in their policies providing that damage caused by “flood” is not covered, the plaintiffs seek recovery of their losses from their insurers. Their primary contention is that the massive inundation of water into the city was the result of the negligent design, construction, and maintenance of the levees and that the policies’ flood exclusions in this context are ambiguous because they do not clearly exclude coverage for an inundation of water induced by negligence. The plaintiffs maintain that because their policies are ambiguous, we must construe them in their favor to effect coverage for their losses."

Therefore the jurisprudence is sound. But justice does not seem to have been served. The people at fault should be the ones paying for the damage to these houses--not those victims of the hurricane who are now left with more worries than fears allayed nearly two years after they lost their homes and way of life.

For more, read the NY Times article here.