Court Rules Flooding Excluded By Homeowners Insurance

Last week a Mississippi federal court judge ruled that Allstate’s home insurance flood exclusions are “valid and enforceable.” This is certainly not the last word on the subject – many lawsuits are pending.

The case arose from a wind vs. flood/storm surge dispute from Hurricane Katrina. The insured plaintiffs asserted that their homeowners insurance policy flood exclusions were “ambiguous and therefore unenforceable” and that Katrina’s storm surge was “not specifically listed as a peril excluded by the Allstate policy.”

Judge L.T. Senter Jr., of the U.S. District Court for the Southern District of Mississippi, ruled, “The inundation that occurred during Hurricane Katrina was a flood, as that term is ordinarily understood, whether that term appears in a flood insurance policy or in a homeowners insurance policy…[t]he exclusions found in the policy for damages attributable to flooding are valid and enforceable policy provisions [and] clear and unambiguous.”

For the umpteenth time, flood is not covered by home insurance or business property insurance unless the peril is added to the policy. The national flood insurance plan is available if your insurer won’t provide the coverage.