In Court Rules Aginst Katrina Victims in Levee Case, the 5th US Circuit Court of Appeals ruled in favor of AllState, State Farm, and ten other insurance underwriters who were fighting attempts by New Orleans policyholders to get them to underwrite rebulding costs on insured property.
Welcome to ReThugWorld, where no one ever helps you, even if you pay for it.
This is a very ugly precedent. Thousands of cases are in the 5th Circuit right now on the same issue. This particular case may well invalidate ANY chance of compensation for insurance policyholders with clauses similar to those dealt with in this case. Many, many thousands of people in NOLA and in Mississippi may well be permanently ruined.
More below...
"This event was excluded from coverage under the plaintiffs' insurance policies, and under Louisiana law, we are bound to enforce the unambiguous terms of their insurance contracts as written," Judge Carolyn King wrote for a three-judge panel of the 5th U.S. Circuit Court of Appeals.
As a result, the panel found those who filed the suit "are not entitled to recover under their policies," she said.
The decision overturns a ruling by U.S. District Judge Stanwood Duval Jr., who in November sided with policyholders arguing that language excluding water damage from some of their insurance policies was ambiguous.
Duval said the policies did not distinguish between floods caused by an act of God -- such as excessive rainfall -- and floods caused by an act of man, which would include the levee breaches following Katrina's landfall.
Incredible. Judge King is a Carter nominee and has been on the Appeals court for over 25 years, and is in fact the chief judge for that court. She also happens to be a Republican.
Allstate spokesman Mike Siemienas said the Illinois-based company is pleased with the court's findings.
The issue of the appeal dealt with "...whether there is an innate distinction between floods naturally caused by excessive rainfall and floods caused by the failure of levees."
Whenever there's money on the line, the hairsplitting becomes quite, quite intense in some corners.
Remind me again why we need these guys? Oh, that's right. You can't buy a house without having home insurance. Unfortunately, the money you shovel out pretty much buys you nothing in many circumstances. It amounts to another tax - one that does not go to government spending and budgeting, but directly into the pockets of corporations.
In this case, I suspect appealing to the Supremes is almost pointless. The majority in that court is bought and paid for.
Also, remind me again why we need a federal government? Oh, that's right. To make sure our infrastructure is sound and that people get help when they need it. Remember?
Not in ReThugWorld.
***UPDATE***H/T to Ortcutt for an interesting link to a story on the previous decision.
I cannot for the life of me understand how a flood-prone area like NOLA could possibly have insurance companies underwriting policies that DIDN'T cover floods. Yet apparently thousands of policies did so. It's not as if NOLA and Mississippi are earthquake country.
Basically, it appears that insurance companies are now in the business of social engineering. Build Absolutely Nothing Anywhere Near Anything (BANANA) or we won't cover it against the primary hazard present in that region.
Like I said, what exactly do we need these people for?