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Court backs insurers over Katrina Insurers win Katrina court case
(about 10 hours later)
A US federal court has ruled that insurers do not have to pay for the flood damage in New Orleans following Hurricane Katrina in 2005.A US federal court has ruled that insurers do not have to pay for the flood damage in New Orleans following Hurricane Katrina in 2005.
Residential property insurance excludes flood damage, which is covered by a federal programme.Residential property insurance excludes flood damage, which is covered by a federal programme.
New Orleans residents and Xavier University argued that the insurers should pay because the negligent design of a dam caused the flooding.New Orleans residents and Xavier University argued that the insurers should pay because the negligent design of a dam caused the flooding.
The court said the insurers were not liable even if there was negligence.The court said the insurers were not liable even if there was negligence.
New Orleans flooded after a dam holding back the Mississippi River was breached in the wake of Hurricane Katrina. New Orleans flooded after levees and flood walls in the canals and drainage systems holding back the Mississippi River were breached in the wake of Hurricane Katrina.
The flooding cost hundreds of lives and caused billions of dollars worth of damage.The flooding cost hundreds of lives and caused billions of dollars worth of damage.
The insurers involved in the case were Allstate, Travelers and the mutual insurer State Farm.The insurers involved in the case were Allstate, Travelers and the mutual insurer State Farm.
Further appealsFurther appeals
The court's decision overturned an earlier ruling by a lower court.The court's decision overturned an earlier ruling by a lower court.
"We are pleased that the court concluded that policy exclusions for flood damage are unambiguous and enforceable," said Michael Siemienas, a spokesman for Allstate."We are pleased that the court concluded that policy exclusions for flood damage are unambiguous and enforceable," said Michael Siemienas, a spokesman for Allstate.
But the case will go on to further appeals, according to James Garner, a lawyer representing Xavier University.But the case will go on to further appeals, according to James Garner, a lawyer representing Xavier University.
"The issue will be argued again on 12 September in the Louisiana State Court of Appeals and, ultimately, at the state supreme court," he said."The issue will be argued again on 12 September in the Louisiana State Court of Appeals and, ultimately, at the state supreme court," he said.