JURIST - Paper Chase: Fifth Circuit to fast-track Katrina levee failures flood insurance ruling

[JURIST] The US Court of Appeals for the Fifth Circuit [official website] will fast-track its decision in a case concerning insurance companies' coverage of levee failure damage in the aftermath of Hurricane Katrina [JURIST news archive], a judge said following oral arguments Wednesday. Judge Carolyn King [official profile], part of a panel of three judges who heard arguments in the case, said that a swift decision was important for the tens of thousands of residents who would be affected.

The current case is an appeal of a November decision [PDF text; case information; JURIST report] on the issue of what constitutes flood coverage in insurance policies. US District Judge Stanwood Duval Jr. agreed with plaintiffs that the language was ambiguous, but allowed insurance companies, including Allstate and St. Paul Travelers Companies Inc. [corporate websites], to appeal whether there is an innate distinction between floods naturally caused by excessive rainfall and floods caused by the failure of levees. If the courts rule that the policies do cover the damage from the levee failure, the insurance companies could be liable for approximately $1 billion in damages. AP has more.

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