Within two weeks after Hurricane Katrina, Louisiana Insurance Commissioner Jay Robert Wooley was quoted as saying that with post-hurricane insurance claims, "Lawyers are going to have a ball; it's got more legal questions than you can imagine."

A few days later on Sept. 15, 2005, Mississippi Attorney General Jim Hood filed a lawsuit against five of the largest homeowners' insurers in Mississippi, asking the court to declare as "void and unenforceable" and in violation "of the public policy of the State of Mississippi" common insurance policy exclusions that typically apply to damage caused by water or flood. The same day, a class-action petition was filed in Louisiana state court against 15 separate insurance companies that argued the cause of damage to thousands of homes in New Orleans was the negligent construction of the levees, therefore negating the flood exclusion. Other less-publicized lawsuits followed in each of the states hit by Hurricane Katrina.

In the following weeks thereafter, news reports appeared from nearly all media sources, often questioning the legitimacy and propriety of the flood exclusion. This was accompanied by articles from dozens of lawyers and other insurance industry professionals discussing the various disputes that likely would arise from Hurricane Katrina insurance claims. Some predicted that property claims from the hurricane would present a minefield of insurance coverage issues. Others suggested that, in addition to water and flood, exclusions for pollution, mold, corrosion, sewer back-up, failure to preserve the property from further damage, collapse, and faulty construction might be cited by insurers.