The Broussards contended the damage occurred from covered wind damage, which hit the house before water from the Gulf of Mexico was blown in from the coast.

State Farm said after the verdict that it believed its expert witnesses had shown “that damage to the Broussard home was overwhelmingly caused by water and not wind.”

But Judge Senter found that the insurer's evidence was insufficient to make its case for flood damage, and that it had not presented an acceptable reason for denying the claim.

In the next case up, homeowner Richard Tejedor of Long Beach, Miss., is seeking more than $5 million, and the issue of storm surge damage will be tried once again before Judge Senter.

Mr. Denton said his client's coastal home was ripped off its slab. According to the complaint–filed Nov. 7, 2005 in state court, before the case was moved to the federal tribunal–State Farm denied the Tejedor family's claim on Oct. 6, 2005, stating in part that “investigation showed that your property was damaged as a result of storm surge, wave wash and flood. Unfortunately that damage to your property is not covered under the policy…”

The complaint charged that the company acted in bad faith and contrary to law, and that their agent, Philip Harvey, misrepresented the coverage in their policy. In addition to $5 million for bad faith actions, it sought $50,000 for mental and emotional distress.

The suit alleges that Mr. Harvey “failed to disclose that hurricane deductible did not imply hurricane coverage, nor State Farm's present undisclosed intention to refuse to pay for a covered wind loss or for storm surge, even though that term is not listed in the so-called flood exclusion.”

Beyond saying he was pleased, Mr. Denton said he could not discuss the impact of the Broussard case or any settlement discussions. “I'm not at liberty to discuss the verdict,” he said.

He confirmed that his case was not involved in the ongoing global settlement talks concerning Katrina-related homeowners' damage claims that involve State Farm, Mississippi Attorney General Jim Hood and plaintiffs' attorney Richard Scruggs.

Mr. Hood has a suit against insurers pending in state court, arguing that they should cover homeowners against storm surge because their policy language is ambiguous.

He predicted in 2005 that insurers would do better reaching a global settlement with homeowners because they would “get hammered” trying individual cases before Mississippi juries.

Randy Maniloff, a Philadelphia attorney who represents insurers, said if the Tejedor case details are really very similar to Broussard, he believed State Farm attorneys would be likely to try and settle–”unless there is something different that gives them the comfort level they won't get the same result” as the last case.

“They are going to have Broussard as a cloud hanging over them,” he said, adding that a settlement might be stymied if the plaintiff was influenced by the Broussard verdict to make too high a demand.