Case pits wind vs. water

An insurance company argues in court papers that the Mississippi Supreme Court should follow federal precedent and rule out coverage for hurricane damage caused by a combination of wind and water.

The San Antonio, Texas-based United Services Automobile Association says only damage caused by water, either alone or in combination with wind, would be excluded from coverage under the homeowners’ policy.

Attorneys for Long Beach policyholders Magruder and Margaret Corban want the court to determine how the policy should be applied before the case is tried in local court.

The 5th U.S. Circuit Court of Appeals in New Orleans has ruled that “anti-concurrent cause” clauses in policies bar coverage when wind and water act in sequence to destroy property.

Harrison County Circuit Judge Lisa Dodson followed the 5th Circuit’s ruling in the case, but said a common-sense reading of the insurance clause indicates to her that only water damage is excluded from coverage.

Dodson agreed to allow the Corbans and USAA to appeal her ruling to the state Supreme Court, which hasn’t decided whether to hear the appeal.

The case would go back to Harrison County for a determination of whether the Corbans are owed any additional money once the causation issue is resolved.

Policyholders of America has filed a brief in support of the Corbans. State Farm Fire & Casualty Co. attorneys say they plan to support USAA’s position.

Clarion Ledger
5/14/8