Posted on 12 Oct 2009
The decision issued yesterday [October 8] in the case of Corban v. USAA by the Mississippi Supreme Court confirms that the water damage exclusion and anti-concurrent causation (ACC) clause -- two key issues in Hurricane Katrina litigation -- are valid provisions of the insurance contract and will continue to be important to insurers in adjusting wind versus water claims, says the American Insurance Association (AIA).
“First, and most importantly, the Corban decision reaffirms the longstanding flood exclusion provision found in most homeowners' insurance policies, that expressly excludes coverage for hurricane driven water (or storm surge),” said James Whittle, AIA Assistant General Counsel. “The water damage or flood exclusion has now withstood every post-Katrina court challenge, and remains a part of regulator-approved insurance contracts throughout the country.” .
“Second, the court upheld the use of the ACC clause that was at issue before the court,” said Whittle. “With this ruling the court has provided meaningful guidance to consumers and insurers. Nothing in this decision changes the important role that insurers play in recovery by adjusting claims according to their contracts with policyholders.”