Under Louisiana law, there are tough proof requirements for an insurer seeking to use flood exclusion language in a homeowner's policy to avoid paying for a total loss, a state appeals court has ruled.
The 3rd Circuit Court of Appeals, in its 3-2 decision, while ostensibly finding in favor of the state-owned Citizens Insurance Company, sent the case back to the lower court for a trial, where it said the insurer will have to convince a jury that flooding–an excluded peril–was the total cause of loss.
Without making that case, the courts said Louisiana's valued-policy law comes into play. Under that statute, an insurer is normally required, when there is a complete loss, to pay the full face value of the policy. The law also precludes a carrier from accepting premiums for one face value and then claiming the loss is a lesser amount.
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
