The Ruling in Favor of Nationwide Insurance

On August 15, 2007, a verdict was issued in Leonard v. Nationwide, the first “wind vs. flood” lawsuit to go to trial in Mississippi following Hurricane Katrina. The plaintiffs in this case alleged that Nationwide should pay the entire loss to their residence under their homeowners policy because Nationwide denied their claim without proper inspection. Plaintiffs argued also that their homeowners policy should provide coverage because “storm surge” was not mentioned in the definition of the “flood” exclusion contained in the policy, and that their agent had previously advised they did not need flood insurance.

U.S. District Judge L.T. Senter ruled that the water damage exclusion in the Nationwide policy is valid and enforceable, and that there was no evidence to support a finding that the insurance contract should be reformed. The judge will be issuing an order dismissing this case. We are encouraged Judge Senter ruled to uphold the meaning and intent of the Nationwide homeowners insurance policy.

Judge Senter’s opinion in Leonard v. Nationwide underscores the individualized nature of each claim. It is very fact-specific and does not determine the outcome of any pending similar cases involving State Farm®.