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Judge allows Katrina flood suits to continue

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From the Associated Press

An unexpected ruling by a federal judge in Louisiana could result in more homeowners collecting money for flood damage caused by Hurricane Katrina -- at a likely cost of more than $1 billion to the industry.

U.S. District Judge Stanwood Duval Jr. sided with New Orleans homeowners who argued that the language excluding water damage from some insurance policies was ambiguous.

Although he said the lawsuit against Allstate Corp., St. Paul Travelers Companies Inc. and other insurers could go forward, he also said the issue of “flood exclusion” was so central to the case that it could be appealed immediately by the insurers.

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Spokesmen for both Allstate and St. Paul Travelers said they planned an appeal.

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