Appellate Court upholds State Farm policy language (Cherhardy v. State Farm)

The plaintiffs contend that flooding resulting from negligent design, construction, and maintenance of the levees is not excluded by the insurance contract. The original decision upheld State Farm’s policy language in November 2006, but ruled that the flood exclusions of numerous other carriers' policies were ambiguous.

We are pleased with this ruling, which reaffirms the soundness of our contract and upholds the validity of our flood exclusion as well as that of other carriers. As a mutual company that serves as a steward of our policyholders' premiums, we believe we should not be required to pay claims for coverage for which no premium was collected.

State Farm® has paid more than $2.6 billion to policyholders in Louisiana as a result of Hurricanes Katrina and Rita. We are proud to continue to be there for them through the rebuilding process.