Here is the situation.... your neighbor has one of those big, high-walled plastic pools that is in poor repair. During a thunderstorm it overfills causing a tear in a seam, the wall collapses and the water in the pool rushes out flooding your window well, breaking the window and causing extensive water damage in your finished basement.
Insurance covers the damage.... right?
Wrong.
As hurricane Katrina victims found out, "Big Insurers Win Ruling On Katrina Levee Break, Appeals Court Says No to claims Payout."
Overturning an earlier ruling in November that the language of the insurance policies was ambiguous.... the 5th U.S. Circuit Court of Appeals in New Orleans yesterday ruled that policyholders of the homes and businesses destroyed after floodwaters breached the levees in the 2005 storm cannot recover damages from their insurance companies.
The appeals court concluded that "even if the plaintiffs can prove that the levees were negligently designed, constructed, or maintained and that the breaches were due to this negligence, the flood exclusions in the plaintiffs' policies unambiguously preclude their recovery."
The levee-breach floods are the unarguable result of the failure of our government to address the inadequacy of the levees.
But, since the policies did not distinguish between act of God floods such as excessive rainfall, and floods caused by acts of man, such as negligence, the insurance companies were allowed to slip through the liability loophole.
So, the Katrina victims lose again.... while our criminally-negligent government and attorney-laden insurers continue on their pay-but-we-won't-play way.
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