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A note on Katrina coverage suits

I notice that at the trial-lawyer-defense website TortDeform.com, Cyrus Dugger takes issue with the statement in my recent Times (U.K.) op-ed that in Mississippi, "insurers besieged by the state's politico-legal tag teams are offering billions to settle Katrina flood-damage claims, notwithstanding clear flood exclusions in their policies." Let me clarify, then. Since their initial attempt to knock out flood exclusions fared badly in court, Hood and Scruggs are no longer characterizing the claims as being for flood damage which insurers must pay for notwithstanding the exclusion. Instead they are presenting them as "my house is gone and you can't prove it wasn't wind" claims. Besieged by the aforementioned tag-teams, insurers are offering billions to settle claims which both sides know perfectly well were caused by the storm surge rather than wind, even if for purposes of litigation Scruggs and Hood pretend otherwise. In other words, I think NYT business columnist Joseph Nocera is exactly right in writing recently that this is not a case of "reasonable people contesting water versus wind", as goes on elsewhere in insurance coverage litigation, but rather that "in Mississippi, the insurance contract has been largely tossed aside by the power of litigation" and that claimants there are "trying to abrogate the terms of the contract they�ve signed with their insurers. It is hard to see how an economy can function if contracts are not upheld."

Dugger also falsely attributes to me the position "that even if the home is damaged by wind, if the already damaged/destroyed home is later further damaged by flooding, even hours or perhaps days later, the insurance company no longer has to pay ... anything". He does not document where I supposedly said this, not surprisingly since it is not in fact a position I have ever taken. So far as I can recall, I have referred in print only twice to this particular argument for denying coverage, here (a brief and neutral description, before I read Judge Senter's opinion) and here (two days later, where I described such a grounds for denying coverage as one that was "strained" and would be "harsh if not fraudulent" in the context of the Nationwide policy, and pointed out that Nationwide itself was not asserting a right to deny coverage on such grounds to Katrina victims).

More: David Rossmiller contributes a calm and informative discussion of "anti-concurrent" clauses and their interpretation.



Rafael Mangual
Project Manager,
Legal Policy

Katherine Lazarski
Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.