World Insurance Report
USAA settles Katrina case
The Mississippi Supreme Court has issued a unanimous decision in Corban v USAA, settling the legal issues surrounding hurricane
Katrina claims in Mississippi and confirming that Texas-based USAA handled claims arising from the 2005 hurricane correctly.
“This ruling is a good decision for USAA as well as for Mississippi homeowners,” USAA spokesman Paul Berry said. “Each key
position USAA put forth was affirmed by the court.” The court endorsed USAA’s claims-handling policy over hurricane Katrina.
USAA paid for damage caused solely by wind but did not pay for damage caused by storm surge. The court also affirmed USAA’s
legal argument that a jury should decide what losses, if any, were caused by wind, and what losses, if any, were caused by
flood. The court found that the water damage exclusion in USAA’s homeowners’ policy clearly excludes storm surge and it rejected
the plaintiffs’ argument that the homeowners’ policy covers all damage caused by a hurricane, regardless of the cause. USAA
has already paid the Corbans for damage caused solely by wind and for damages covered by their flood policy. The insurer said
that the court ruling allows the case to go to trial so a jury can determine if any additional damage was caused to the Corbans’
home by wind rather than by water/storm surge, which is what USAA has sought all along.
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