Katrina Victims and Insurer Square Off in a Courtroom

A federal judge on Monday began hearing a groundbreaking trial that could signal whether thousands of people whose homes were destroyed by Hurricane Katrina can receive payouts for losses their insurance companies contend were caused by flooding.

Lawyers for Paul and Julie Leonard say the couple were misled by their insurance agent and then were denied much of their claim for their home in Pascagoula, Miss., without a full review of the facts.

The couple’s insurer, Nationwide Mutual Insurance, argued that while wind damage is covered by its homeowners’ policies, damage from flooding is excluded, including damage from Katrina’s wind-driven storm surge of water.

from the NY Times