Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Reconstruction of New Orleans and Katrina Aftermath -- Ignore unavailable to you. Want to Upgrade?

To: Paul Kern who wrote (171)	11/29/2006 9:36:13 AM
From: carranza2	Respond to of 249

I am involved up to the gills in these cases. It was a very poor decision. In a nut shell, he decided that the word "flood" used in the homeowners' policies is ambiguous because it does not distinguish between man-made and natural events. Since the insurance policies did not do so, they were held ambiguous. Ambiguities in insurance policies are always decided against the carriers. Accordingly, the policies were held to cover Katrina's man-made floods, which were caused mostly by canal and levee failures. He gave short shrift to the argument that the National Flood Insurance Act, and the federally-funded flood insurance it provides, indicated a scheme in which it is clear that there is a distinction between homeowners' and flood carriers. The report you mention does not say something else vitally important--State Farm's policies were held not subject to the ruling because their language said flood damage was excluded regardless of how it was caused. SF has 40% of the market. The case was certified for an immediate appeal. I think the chances of reversal are good. If the ruling stands, we may see some insurance carriers go into bankruptcy. They will begin to withdraw from Louisiana and the rest of the Gulf Coast, making reconstruction even harder than it has been. Coverage will become unaffordable.