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Ruling by Federal Judge Suggests Flood Exclusion is Valid and Enforceable

The American Insurance Association (AIA), the National Association of Mutual Insurers (NAMIC), and the Property Casualty Insurers Association of America (PCI) have issued the following statement in response to a recent ruling by the U.S. District Court for the Southern District of Mississippi denying a motion by Allstate Insurance Company to dismiss a lawsuit concerning the cause of damage to a home resulting from Hurricane Katrina. All three national trade groups have filed an amicus brief in the case.

“While we would have preferred that the motion for judgment on the pleadings be granted at this stage, the underlying opinion is good because it strongly suggests that the Court understands that the explicit water damage/flood exclusion in this policy does exclude coverage for hurricane driven water (also known as “storm surge”). This part of the decision is positive for insurers and other businesses that rely on the integrity of their contracts in Mississippi because it recognizes this contract provision is valid, enforceable and applicable in this case. It also demonstrates that, notwithstanding the challenges and devastation confronting this family and the entire Gulf Coast, contracts can still get a fair reading in the courts. That fact should encourage the entire business community, not merely insurers and their policyholders, to remain committed to the state.”

For further information, contact
Rick Nelson, APR, CAE
(317) 875-5250 Tel
(317) 879-8408 Fax

Posted: Wednesday, March 29, 2006 12:00:00 AM. Modified: Wednesday, March 29, 2006 3:39:24 PM.

317.875.5250 - Indianapolis  |  202.628.1558 - Washington, D.C.

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