Policy language that a major insurance company invoked to deny Gulf Coast homeowners' claims after Hurricane Katrina is at the center of a case scheduled to be heard today by a federal appeals court.
State Farm Fire and Casualty Company says its policies cover damage from hurricane-force winds, but not from rising water, and has refused to pay for any damage from Katrina's monster storm surge.
The Bloomington, Illinois-based insurer also says damage from a combination of wind and rising water is excluded from coverage.
Last year, however, a federal judge in Gulfport ruled this "anti-concurrent cause" policy language is ambiguous and therefore can't be enforced.
In the same ruling, Judge L.T. Senter Junior refused to throw out a lawsuit filed by John and Claire Tuepker.
The State Farm policyholders' home in Long Beach was reduced to a concrete slab by the Aug. 29, 2005, storm.
State Farm appealed Senter's ruling to the 5th U.S. Circuit Court of Appeals in New Orleans. A three-judge panel is scheduled to hear arguments today from attorneys on both sides of the case.