An appeal court's ruling last month resulted in a major victory for insurance companies, who could have been on the hook for billions of dollars in flood claims that resulted from the levee breaches in New Orleans following Hurricane Katrina. TowerGroup's David West sat down with Claims to discuss the litigation and the logic behind the reversal, as well as the implications for adjusters.
Can you give our readers a brief synopsis of the history of the levee litigation up to the point of the appeal court's decision?
On May 24, 2006, a class-action lawsuit was filed on behalf of insured homeowners in New Orleans, and on Nov. 27, 2006 Judge Duval ruled in favor of State Farm and The Hartford while ruling against the exclusion in standard ISO homeowners' forms. On Aug. 2, 2007, the U.S. Fifth Circuit Court of Appeals overturned the lower court's rejection of the ISO exclusion.
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