We could call it criminal, another example of a heartless insurance industry, etc. But it looks pretty clear that these people’s homes weren’t covered for flood damage.

From the Chicago Trib:

Allstate Corp. and other insurers won their latest battle over Hurricane Katrina damages as a U.S. appeals court in Louisiana on Thursday ruled against policyholders seeking to recover disaster-related flood damages.

The court ruled that homeowners’ insurance policies weren’t entitled to damages caused by levee breaches that flooded New Orleans during the 2005 disaster. Significant damage occurred when levees along three major canals ruptured. At one point, about 80 percent of the city was underwater.

Typically, most insurance policies exclude damage caused by floods.

But plaintiffs, in what has become known as “Katrina Canal Breaches Litigation,” had contended that the water damage was the result of negligent design, construction and maintenance of the levees and that the policies’ flood exclusions are therefore ambiguous because they don’t exclude coverage for water caused by negligence. Because the policies are ambiguous, the plaintiffs argued, their losses should be covered.

Here in Kansas City, my grandparents’ place sits on a flood plain, and boy did it flood. They could’ve argued that the city didn’t widen the river enough, was negligent in not doing so because this area had flooded before and therefore the insurance company should pay. But I don’t think that’s a valid argument.

The court agrees…

“Regardless of what caused the failure of the flood-control structures that were put in place to prevent such a catastrophe, their failure resulted in a widespread flood that damaged the plaintiffs’ property,” the court said. “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.

You’ve gotta feel for these people. The law is the law, but it doesn’t make the outcomes any less tragic or heartwrenching.

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