The Louisiana Supreme Court handed the insurance industry a major victory last week with a ruling that there is nothing vague about a policy excluding “flood” damage–a decision that the defendant's attorney said could save insurers between $20 billion and $30 billion.
In its decision concerning a commercial policy covering a small New Orleans apartment extensively damaged by Hurricane Katrina, the high court overturned a finding by the state's 4th Circuit Court of Appeal that the policy was ambiguous because it used the term “flood.”
The Lafayette Insurance Company policy that insured the building stated it would not cover damage by, among other calamities, “flood, surface water, waves, tides, tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not.”
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