Wind vs. water saga continues

A federal judge in Gulfport, Miss., recently refused to throw out a wind vs. water lawsuit that a couple filed against Allstate Insurance Co. over claims for damage to their home from Katrina, the Associated Press reported.

The lawsuit, filed by Elmer and Alexa Buente of Gulfport, is one of many concerning whether Gulf Coast homes were destroyed by wind or water from the Aug. 29 hurricane. Allstate reportedly paid a small amount for damage it said was caused by wind, but refused to cover a larger amount because the company said the damage was due to water intrusion.

The plaintiffs claim they didn’t buy flood insurance because they were told they didn’t need it since they didn’t live in a flood plain.

In denying Allstate’s bid to have the lawsuit canned, U.S. District Judge L.T. Senter Jr., said the question of how much damage to the couple’s home was caused by wind and water is a “fact-specific” inquiry that must be decided at trial.

High-profile trial attorney Richard “Dickie” Scruggs, who represents the Buentes, called the ruling victory for all Allstate policyholders whose post-Katrina claims were denied.

According to Allstate, however, all is not lost. A company spokesperson told the AP that Allstate’s exclusions for water damage and for damages attributable to flooding “are valid and enforceable” and would hold up to an inquiry.

Scruggs’ legal team is suing four other insurance companies over Katrina-related claims: Metropoli-tan, State Farm, Nationwide and United Services Automobile Association, the AP reported. Also suing insurance companies for the denial of Katrina claims is Mississippi Attorney General Jim Hood, who is investigating companies for “fraudulent” claims handling.

The outcome of the wind vs. water lawsuits will likely affect property coverage in locations all along the Gulf Coast, including those in Texas and Louisiana. But whether or not the insurance policies’ water exclusions withstand these lawsuits intact, it would seem prudent for homeowners along the nation’s hurricane-prone coasts to buy as much wind and flood insurance as they need before this year’s hurricane season starts, flood zone or no flood zone.

Meanwhile, a recent report from Colorado State University meteorologist Prof. William M. Gray predicts that 17 named storms will form in the Atlantic Basin during the 2006 hurricane season, with an 81 percent probability that a major category three, four or five hurricane will make landfall somewhere on the U.S. coastline. Gray’s report said there’s a 47 percent probability of a hurricane hitting the Gulf Coast from the Florida Panhandle west to Brownsville, Texas, this year; the average during the last century was 30 percent.