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Decision on Louisiana's "Valued Policy" Law Appealed to Supreme Court

Plaintiff attorneys in Louisiana are asking the U.S. Supreme Court to throw out an August decision by the 5th U.S. Circuit Court of Appeals involving...
November 27, 2007

Plaintiff attorneys in Louisiana are asking the U.S. Supreme Court to throw out an August decision by the 5th U.S. Circuit Court of Appeals involving the state's valued policy law that favored insurance companies. The law sets the value of homeowner insurance policies so in cases where a house is destroyed the value of the policy can't be contested.  In state court the law has been interpreted to mean that when a home is destroyed by a combination of forces -- some covered by the policy and some not -- an insurer that is responsible for some portion of the loss can be held liable for the entire loss. 

The state's valued policy law has been one of the mostly hotly contested issues in Hurricane Katrina litigation because it could force insurance companies to cover flood damage when it occurred in combination with wind damage in cases in which the home was destroyed.

In August, the federal appeals court upheld a lower court ruling that said the law doesn't apply unless the damage is completely attributable to a covered peril such as wind.  The ruling involved a case that consolidated a number of similar suits against nine insurers, including State Farm, Allstate, Travelers, Hartford and USAA.  Jeffrey Struckhoff, who represents the plaintiffs in the case, says the request is for the U.S. high court to allow this case to be heard by the Louisiana Supreme Court.

Key Insurance Ruling Contested (New Orleans Times-Picayune (11/20/07)