Louisiana justices: Policyholders not always entitled to full value

Chris Rizo May 21, 2008, 1:17pm

NEW ORLEANS, La. (Legal Newsline)-The Louisiana Supreme Court ruled Wednesday that Louisiana Citizens Property Insurance Corp. is not required to pay the full value of the homeowners insurance policy to a home lost in Hurricane Rita in 2005.

In what was the first insurance case to hit the state's high court involving claims from hurricanes Katrina and Rita, the court ruled that Mark and Barbara Landry, a Vermilion Parish couple, were not entitled to the full value of their policy.

The case centered on a controversial statute known as the valued policy law, which affixes the value of an insurance policy so homeowners know how much money they can count on receiving in the event their home is lost.

Attorneys for the Landrys argued that the valued policy law should require state-sponsored Citizens Property Insurance to pay the full value of the policy, even though some of the damage was caused by flooding, which is not covered by their insurance policy.

The insurance countered that the valued policy law only applies in instances where the home is lost by causes covered by the homeowner's policy.

Hurricane Rita caused $11.3 billion in damage on the U.S. Gulf Coast in September 2005.

The majority opinion, written by Associate Justice Catherine "Kitty" Kimball, was signed by Associate Justices Jeanette Theriot Knoll, Chet Traylor, John Weimer and Bernette Johnson.

Chief Justice Pascal Calogero Jr. and Associate Justice Jeffrey Victory concurred with the majority decision, but for different reasons.

From Legal Newsline: Reach reporter Chris Rizo by e-mail at chrisrizo@legalnewsline.com.

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