Cecil Pearce, vice president of the American Insurance Association, said in a statement that the decision is a “significant step forward for insurers and others committed to rebuilding after Katrina.”

Mr. Pearce added, however, that the industry could still face challenges. “Each and every claim must be decided on its own merits,” he said. “Each case is different, involving different fact patterns and different levels and types of coverage that apply to each policyholder.”

Neal Alldredge, senior vice president for the National Association of Mutual Insurance Companies, pointed out that “all of the individual experts were 'qualified' to express the opinion they rendered and none of the expert testimony was stricken.”

The industry's next challenge comes in Mississippi state court where Attorney General Jim Hood is suing several insurers, claiming their policy language is ambiguous and that any ambiguity should be seen in favor of the policyholder.

“I think this will do some damage to that,” Mr. Alldredge told the National Underwriter.

In a written statement, Nationwide said it was pleased with the decision and would “continue to adjust claims on a case-by-case basis.”

The one straw plaintiffs could grab was Judge Senter's contention that insurers could not cancel coverage for wind damage when it occurred in combination with flooding.

Robert Hartwig, chief economist for the Insurance Information Institute, noted, however, that Nationwide did not even invoke the so-called anticoncurrent causation clause in its denial of the claim in question.

Plaintiffs' attorneys Richard Scruggs and his son, Zach Scruggs, could not be reached for comment.

Mr. Hartwig took issue with Richard Scruggs' post-verdict comment that the judge left “the groundwork for homeowners to do very well in those cases.”

“The judge's ruling just made it very economically unfeasible for trial lawyers to bring these cases in the future,” Mr. Hartwig noted.