A major victory for insurance companies in the wake of Hurricane Katrina.
The Louisiana Supreme Court has ruled an insurer isn't obligated
to pay for water damage from the failure of New Orleans area levees
The ruling reverses a state appeals court decision that favored
a New Orleans property owner in his suit against Lafayette
In November, the 4th Circuit Court of Appeal concluded
Lafayette's homeowner policy failed to exclude all forms of
flooding because its language was ambiguous.
But the Louisiana Supreme Court disagreed, saying Lafayette is
entitled to limit its liability for damage from a levee breach.
Lafayette and other insurers say their policies cover damage
from wind but not flooding, including water from a levee breach.