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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 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 appeals | Further 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. |
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