A 5th U.S. Circuit Court of Appeals panel in New Orleans has ruled that standard insurance policy exclusions for water and flood damage prevent Hurricane Katrina victims from recovering damages from their insurers.

“This event was excluded from coverage under the plaintiffs' insurance policies, and under Louisiana law, we are bound to enforce the unambiguous terms of their insurance contracts as written,” Judge Carolyn King wrote for a three-judge panel on Aug. 2.

In a controversial lower court decision last November, New Orleans U.S. District Court Judge Stanwood Duval had ruled that policies with standard language from the Insurance Services Office issued by Allstate and other carriers were ambiguous and did not exclude water damage caused by negligent and intentional acts.

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