Three industry associations have concluded that a recent denialby a Mississippi court of a motion for dismissal concerning flooddamage in Mississippi could end up being a silver lining to alingering issue about flood versus wind.

Though the U.S. District Court for the Southern District ofMississippi dismissed the motion brought by Allstate, the AmericanInsurance Association, the National Association of Mutual Insurers,and the Property Casualty Insurers Association of America allagreed that evident in the court's explanation was an understandingof the water damage/flood exclusion in most insurance policies.

The ruling involved the case Buente v. Allstate, which wasbrought forth in the wake of Katrina. The judge is reported to haveacknowledged that any damage from hurricane flood waters would notbe covered by the Buentes' policy, which contained the standardflood exclusion. He also found there were issues of fact about whatpercentage of the damage was caused by flood waters, and how muchwas caused by wind.

“While we would have preferred that the motion for judgment onthe pleadings be granted at this stage, the underlying opinion isgood because it strongly suggests that the Court understands thatthe explicit water damage/flood exclusion in this policy doesexclude coverage for hurricane-driven water,” the associationsstated in a joint release. “This part of the decision is positivefor insurers and other businesses that rely on the integrity oftheir contracts in Mississippi because it recognizes this contractprovision is valid, enforceable, and applicable in this case.”