Federal appeals court finds State Farm policy clause unambigious in Katrina case

[JURIST] The US Court of Appeals for the Fifth Circuit on Tuesday upheld language used in homeowner insurance policies [opinion, PDF] by State Farm Fire and Casualty, overturning a district court ruling that the policy language was ambiguous and consequently unenforceable. The three-judge circuit panel held that the policy's anti-concurrent causation clause

clearly state[s] that excluded losses – here, any loss which would not have occurred in the absence of one or more of the excluded events – will not be covered even if a nonexcluded event or peril acts "concurrently or in any sequence" with the excluded event to cause the loss in question. Thus ... the ACC Clause in State Farm's policy is not ambiguous, and should be enforced under Mississippi law.
The ruling came in a lawsuit brought against State Farm [corporate website] by John and Claire Tuepker, State Farm policyholders whose home was destroyed in 2005 by Hurricane Katrina [JURIST news archive].

The Fifth Circuit followed precedent set forth in a case against Nationwide Insurance [corporate website] decided in August, in which the circuit court ruled that policy language was not "ambiguous" [opinion, PDF; JURIST report] about whether damage caused by combinations of wind and water is covered under a policy that only lists one of the two. AP has more.

 

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