Mississippi and Louisiana are not the only states to be affected by Hurricane Katrina and last week, an Alabama jury heard its first Katrina-related wind versus water insurance case.
The case involved a disputed claim submitted by Richard and Victoria Preis to their insurance company, Lexington Insurance Company (“Lexington”), which determined that they suffered only $64,000 in covered, wind-caused damages. The Preises home had been valued at more than $1 million and allegedly contained more than $700,000 in contents. They received approximately $600,00 from their flood insurance policies, but Lexington denied the remainder of their claim on the basis that the damage was caused by non-covered storm surge.
Federal district court Judge William Steele ruled that as a matter of law, the Preises could not be paid for the destruction of the home’s contents because they had presented no evidence to differentiate which contents were damaged by wind and which were damaged by water. The issue of whether the damage to the home itself was caused by wind or water went to the jury.
The jury awarded $70,000 for wind damage to the home, which was only $6,000 more than Lexington’s pre-verdict offer.
The Preises have vowed to appeal the decision and we will continue to provide updates on this and other Katrina-related issues on InsureReinsure.com.
