, 11/7/7

State Farm Mutual Automobile Insurance Co. does not have to pay Mississippi homeowners for the record flooding that Hurricane Katrina caused because its residential policies don’t cover such damage, an appeals court said Tuesday.

The ruling from the 5th Circuit Court of Appeals reverses an interpretation from a federal court in Mississippi that Bloomington, Ill.-based State Farm’s exclusion of flooding in its homeowner policy was ambiguous and unenforceable. Standard State Farm policies cover wind damage.

“Water damage is explicitly excluded from coverage,” a three-judge panel said in a written decision.