Analysis Of The Flood-Exclusion Clauses In The Katrina Case

A court’s decision in the Katrina case would most likely turn on an assessment of the uncertainty of the flood-exclusion clauses in the insurance policies at issue. This assessment Might rely on extensive some piece on the meaning of the term “flood. It could be said in the plaintiffs’ favor that the flood-exclusion clauses were uncertain because the term “flood” was subject to two reasonable definitions:
• One that is related to floods resulting from natural causes only and
• One that is related to floods resulting from both natural causes and negligent or intentional acts.
Because of this uncertainty, the policies could be interpreted in favor of the insureds. The defendants could proclaim that the flood exclusions in the policies unambiguously
precluded coverage for losses caused by flooding due to breached levees, regardless of whether the levees were breached because they were neglectfully designed, constructed, or maintained. Although the term “flood” was not defined in the policies, the event ensuing from the breach of the levees fit squarely within the generally understood meaning of the term “flood,” whether its cause was regarded as natural or non-natural.