Judge: Katrina storm surge not covered

[jasons2k]

Judge: Katrina storm surge not covered
Ruling seen as big win for insurance industry

Tuesday, August 15, 2006; Posted: 4:55 p.m. EDT (20:55 GMT)

GULFPORT, Mississippi (AP) -- A federal judge ruled Tuesday that an insurance company's policies do not cover damage from flood waters or storm surge in a decision that could affect hundreds of upcoming cases related to property damage from Hurricane Katrina.

U.S. District Judge L.T. Senter Jr. ruled that a Mississippi Gulf Coast couple cannot collect damages from storm surge caused by Katrina because Nationwide Mutual Insurance Co.'s policies do not cover wind-driven water damage.

Senter Jr. said Paul and Julie Leonard of Pascagoula could be compensated for damage that they could prove was caused by high winds, however.

"Almost all the damage to the Leonard residence is attributable to the incursion of water," Senter wrote in the 13-page decision.

Senter's ruling could set a precedent for hundreds of other court challenges to the insurance industry for denying billions of dollars in claims after the August 29 hurricane ravaged the coasts of Louisiana and Mississippi.

Although Senter ruled that Nationwide's policies do not cover damage from storm surge, the judge also concluded a key policy provision the company has used to deny coverage is ambiguous.

Nationwide and other insurers say their homeowners policies cover damage from a hurricane's wind, but not in cases where it resulted from a combination of wind and water.

"This reading of the policy would mean that an insured whose dwelling lost its roof in high winds and at the same time suffered an incursion of even an inch of water could recover nothing under his Nationwide policy," he wrote.

"From our perspective, it lifts a very large cloud of uncertainty that has been hanging over the insurance market of the Gulf Coast," Joseph Annotti, spokesman for the Property Casualty Insurers Association of America, said in reaction to the ruling. "A healthy insurance market is absolutely key to a rejuvenated economy down there."

Shares of most property and casualty insurers rose following the ruling, amid a generally surging stock market.

American International Group Inc. shares jumped 73 cents to $62.43. Allstate Corp. shares gained 80 cents to $57.22, St. Paul Travelers Cos. shares rose 93 cents, or 2.1 percent, to $44.02, and Hartford Financial Services Group Inc. shares jumped $1.01 to $82.49, all on the New York Stock Exchange.

"It's a favorable first decision for the industry," said Fox-Pitt Kelton analyst Gary Ransom. "I never really had much doubt that this was the way it was going to work out. There's a lot of precedent for this. It's not like we're interpreting these contracts for the first time."

The Leonards had estimated the total damage to their home at $130,253. They said $47,365 in damage was caused by wind. Nationwide paid only $1,661, blaming the remainder on the storm surge.

The couple's attorneys had asked for more than $158,000 for the damage to the house and its contents, plus interest and attorneys' fees and expenses. Senter, however, ruled that Nationwide only owed the Leonards about $1,228 more than what the company already has paid them for wind damage.

Both sides claimed victory in the wake of Senter's ruling.

"The Leonards did not win as much money as I hoped they would have, but they won this case," said one of their attorneys, Richard "Dickie" Scruggs. "It's always great to get a win in the first game of the season, whether it's by one point or 30 points."

Paul Leonard, a police lieutenant, acknowledged that an extra $1,228 only covers a fraction of the repair costs for his home, but he also considered Senter's ruling a victory.

"I believe anybody in a civil trial asks for the moon and is able to live with what they get," he said.

Nationwide spokesman Joe Case said the company is pleased that Senter upheld the terms of the flood exclusion language in its policies.

"While it is unfortunate that the Leonards did not choose to purchase flood insurance, insurance carriers have an obligation on behalf of all policyholders to adjust claims based on factual evidence that supports coverage payments," Case said in a prepared statement.

The Leonards claimed a Nationwide agent, Jay Fletcher, told them they didn't need flood insurance.

Senter rejected the Leonards' claim that the agent's alleged assurances make Nationwide liable for damage from both wind and water. Paul Leonard mistakenly inferred that his policy covered water damage, the judge ruled.

"Fletcher did not materially misrepresent the terms of the Nationwide homeowners policy to the Leonards, and Fletcher did not make any statements which could be reasonably understood to alter the terms of the Nationwide policy," Senter wrote.

The couple's lawsuit was the first among hundreds of Katrina insurance cases to be tried since the storm slammed into the Gulf Coast nearly a year ago, demolishing tens of thousands of homes.

Senter presided over an eight-day trial without a jury last month. He is hearing virtually all the Katrina insurance cases in Mississippi, so his ruling will be scrutinized by thousands of Gulf Coast homeowners as well as the nation's top insurers.

[Lindaloo]

Ah well. Back to the drawing board. This judge is known for this type of ruling anyway. But, you have to go through steps and he was the first one. I knew he would rule this way. I can't believe he believed Fletcher. Not everybody is lying about what he told them. This judge is basing his ruling on what he thinks the Leonards should have done and getting the flood. So typical of this kind of judge.

Now it will go to jury.

[Robjohn53]

I agree in this matter as well but theres also a more important factor here as well. It's called "The Eyes Of The Law" Even tho they were told they did not need the flood damage coverage buy the agent, The court still see's it as they were not covered and to the court that is the big picture. Sadly to say it was not right but when thease things happen it's always the best route to make positive sure what they were told was legally true. I feel bad for them and what was done to them and what they lost. But theres a serious lesson to think about out of all this. That is to always find out for sure and never take there word for it. second opinions work for everything out there. And not for just health problems and a attorney's advice always is the best thing you can get. Know everything from a legal stand point.
Even tho they lost they still have a chance to prove they were misled but problem is that it's very hard to do and prove with out the agent just coming right out and admitting it...If he had ruled the other way then even more huge cases would be questioned. Thing is it's sad cause we all at one time or another bring ourselves to believe the kind and nice agent thats out to get our bucks. Personally my Prayers are with the couple and i wish the best for them both. but it seems the big companys always have a ace in there pocket somewhere....The saddest part of all is that all the others might lose the same as well..... just my 2 cents

[gtalum]

Theri policy excludes flood coverage. The judge ruled that this means the insurance company doesn't have to pay for flood damage. How is this a bad ruling?

You never take as truth what someone tells you verbally in this kind of instance. Insurance is a contract liek any other. Read the policy before you rely on it. It's common sense.

[wayoutfront]

"I believe anybody in a civil trial asks for the moon and is able to live with what they get," he said.

I keep coming back to this statement that Policeman Leonard made.

Obviously he didn't think he should win. But he was the perfect client for Dickie to bring as his precedent setting first case. a poor Policeman who lost everything.

Oh well the world still spins.

BTW
http://www.triallawyersinc.com/html/part03.html

Dickie is only about Dickie

[Lindaloo]

He is a detective and a good friend of my family. Actually, he won just a little bit. He deserves more than what he got for the wind damage. I have seen his home and it was not just water that damaged the inside. The little bit of money he did receive was not even enough to buy shingles to fix the roof nor replace all the siding he lost. So, don't count out the insurance companies paying just yet wayoutfront. The judge left that door open.

And FYI, wayoutfront, Paul is weighing his options because as you know there could still be a trial by jury. So do not breathe a sigh of relief yet. It ain't over until it is over.

You can spin the lawyer bit all you want to. Dickie is hated by most greedy people.

[wayoutfront]

I am not spinning I posted a link to Trial lawyers Inc. the company that tracks these things

Dickie made 1.4 billion on JUST the tobbaco settlements I think if he felt sorry for Mr leonard he could have easily paid for the repairs

becasue like I said before There never has and never will be a a case that allows for flood coverage on a Property cliam. But just think if Dickie had won. Dickie would have had a class action to to top all class actions for every claim since Insurance has been around.

Make no misstake Dickie is a class action lawyer.

and as far as him being a friend of the family makes no difference his "quote" makes it clear he knew he was shooting for the moon

[Lindaloo]

Do you think you are informing me that he is a class action attorney? lol. Um no you aren't. His reputation speaks for itself and the insurance industry needs to be shaking in their boots. So what, Paul was shooting for the moon. If he had been paid for his actual wind damages then he would not have even shot for anything.

You are a mighty bold person I will give you that much. Do I give you any credit? No. Why? because you work for the insurance industry. You are going to take up for the one who pays you.

Him being a friend of my family makes all the difference. I know him, you don't therefore, you would see it with blinders on.

Wow, your statement above about Dickie paying for Pauls repairs is just proof in the pudding and I hope everyone that reads your posts takes you with a grain of salt. I know I am from now on.

[wayoutfront]

Take it with a grain of salt .. no difference if Dickie pays for it or I or the taxpayers pay for it
If Mr. Leonard ever gets paid for anything but wind . Then it will be charity because it is not nor ever will be in a policy .

and the little extra money on the wind is common. Adjusters estimates are just that ESTIMATES. If it cost him more to get the wind damage repaired. He is due.

Everythimg is in the policy.

But Now there are 2 recent cases in MS that say the same thing yet you still say It should be covered. Maybe Your right (<-----Joking)

and there was only one thing the judge could do or Jury can do READ THE POLICY and see whats covered

[Lindaloo]

Um nope, you are wrong about common practice and the supplement on the damages. Dang, I thought supplement was only for auto. Hmmmm... anyway, you do not know what Nationwide did. They gave him a check for wind damages,but he had more damage than that from the wind. So, he sued for the flood to actually get more money for wind. The judge saw it that way,so actually, Paul won. The adjusters were telling him that the wind damage was actually flood damage. He had 5 feet in his home. He has a split level then explain how water got upstairs? But yet, they chose to only pay him 1300.00. Do you even know what you are saying? You are just typing to be typing and you are not looking at the big picture. You are only seeing things from the greed viewpoint, not the actual policy holder's. That leads me to the conclusion that you are not looking at this with an open mind. Imagine that!

Never underestimate Dickie. He and his client got what they actually went after. The judge left that door open. LOL!

[wayoutfront]

So, he sued for the flood to actually get more money for wind. The judge saw it that way,so actually, Paul won

BS


I am done with you as you really have NO CLUE

I really hope people do not take your advice.

m nope, you are wrong about common practice and the supplement on the damages

BS again I hope people do not take your advice as your clueless

[Lindaloo]

So, he sued for the flood to actually get more money for wind. The judge saw it that way,so actually, Paul won

BS


I am done with you as you really have NO CLUE

I really hope people do not take your advice.

ROFLMAO!!!!!!!!!!!!!!! If ya can't take the heat, git out the kitchen. Obviously you need to know how the system works. You claim to know all about Dickie, but you got proved wrong. See ya. LOL!! Strategy, you should read up on it.

[Stormtrack]

I think most homeowners know that you have to specifically buy flood insurance to be covered against rising water whether that be storm surge or rainwater. But if both wind damage and flood occur at the same time, the insurance company should have to pay for whatever part of that was caused by the wind. Sometimes that may be hard to determine.

[Lindaloo]

Well said stormtrack it is just some do not understand why this had to be done. Like I said above, there needs to be some sort of guidelines to determine that. Just because there is a slab left they feel it is all flood.It is just their way of getting out of paying anything.

[Bluefrog]

whew y'all are killing me ... caused me to drink 2 beers already. I am also friends with Dickie, Paul. and Jay (ins agent). I am both a Realtor and attorney and sort of have mixed feelings about the case. Part of the problem is an agent (allegedly)telling a policy holder they are covered ... they don't need anymore coverage etc. Another part is that 99% of the public including myself (who is an attorney) DO NOT read the policies ... who could cause a bunch of attorneys wrote the damn thing but not in layman's terms....plus they "rely" on their agent (the expert) in insurance. Another problem is the fact that no one filmed or recorded and there were no witnesses as to how the actual damaged occurred ... wind first then water ...wind and water together or the wind pushed the water ??? Unless you were here you don't have a freaking clue. There are plenty of houses and lots that I can see out my window right now that there is absolutely no way to tell which caused the damage.

[Lindaloo]

whew y'all are killing me ... caused me to drink 2 beers already. I am also friends with Dickie, Paul. and Jay (ins agent). I am both a Realtor and attorney and sort of have mixed feelings about the case. Part of the problem is an agent (allegedly)telling a policy holder they are covered ... they don't need anymore coverage etc. Another part is that 99% of the public including myself (who is an attorney) DO NOT read the policies ... who could cause a bunch of attorneys wrote the damn thing but not in layman's terms....plus they "rely" on their agent (the expert) in insurance. Another problem is the fact that no one filmed or recorded and there were no witnesses as to how the actual damaged occurred ... wind first then water ...wind and water together or the wind pushed the water ??? Unless you were here you don't have a freaking clue. There are plenty of houses and lots that I can see out my window right now that there is absolutely no way to tell which caused the damage.

Oh don't waste your time Tiff. The robots will never see beyond their noses and have no clue on how to actually give estimates. Why? because they lack the training and guidelines.

[Robjohn53]

If you have flood damage and wind damage what the heck dose it matter which was the cause if your covered for both then whats the problem they should pay for the damages. Kinda like what come first the chicken or the egg. It still comes down to taking our money for the coverage then renegging on the deal. They should pay it's not like they can't afford it.....

[Lindaloo]

If you have flood damage and wind damage what the heck dose it matter which was the cause if your covered for both then whats the problem they should pay for the damages. Kinda like what come first the chicken or the egg. It still comes down to taking our money for the coverage then renegging on the deal. They should pay it's not like they can't afford it.....

That is the problem. They are supposed to top each other out. Flood pays but the insurance policy doesn't, resulting in lawsuit after lawsuit. But, you have these adjusters flocking in here telling us to READ YOUR POLICY and "I am an adjuster, I read my policy" It is almost laughable.

[wayoutfront]

Who says they are supposed to top each other out?

If you have a one story house with a full finished basement with minamal shingle damage and it floods 40 feet high Nothing in the basement is covered. It all depends on the policy you buy

If you have an ACV policy Your claim will have depreciation

Now granted in the sense that the house is totaled from wind and flood and there no exclusions on either policy and you carry an RCV policy on your homeowners and flood Yes you should be completely indemnified.

I do understand the frustration of being totaled and having 2 adjusters trying to equal 100% of the damages ( It is just as difficult as the adjuster trying to find out what the other adjuster is doing) That is why the single adjuster program works . The only probelm there is it takes years of experience to be able to adjust flood and homeowners as they are very different Types of Insurance . Until Katrina You had to have verifiable years of experience before you can get a license to adjust for NFIP

[Lindaloo]

Because I learned that in my continuing education classes for the insurance company I worked for. Plus, that is what my boss used to tell customers. I also worked closely with an Allstate Catastrophe Team. OMgosh, don't tell me we were giving out false information.