Hurricane Katrina--Wind or water, does it really matter?

A federal judge in Mississippi today began hearing testimony in the case of a couple whose home was damaged by Hurricane Katrina but their insurance company has paid only $1,600 for $130,000 in damage.

Now, before anyone gets worked into a lather about the big, bad insurance company stickin' it to the poor policyholder, consider this fact: Flood damage is excluded from virtually every homeowners policy. That's right, unless you buy separate flood insurance, usually through the National Flood Insurance Program, your home is not covered for flood damage.

This court case is interesting because its outcome could affect thousands of other homeowners whose homes suffered wind and water damage from Katrina. A ruling that wind caused the damage changes everything.

The trial, being heard without a jury by U.S. District Judge L. T. Senter Jr., is the first among hundreds of lawsuits that have been filed by Gulf Coast homeowners challenging insurance companies over the wind-verses-water issue. Plaintiffs' attorneys hope a ruling in the homeowners' favor would pressure insurance companies to pay out hundreds of millions of dollars in settlements for homeowners whose claims have been rejected.

The homeowners also charge that their agent told them in 1999 that they didn't need flood insurance. I hope they're not really expecting the judge to believe that. Who ever heard of an insurance agent telling clients that they don't need more coverage?