Hurricane Katrina was an unprecedented natural disaster on American soil. Even beyond the tragic loss of life, the economic and political fallout has been huge. One little-noticed consequence is the coming battle in the courts over what could be at least $15 billion: will insurance companies find themselves liable under homeowners’ policies to cover Katrina losses or will courts enforce the policies’ flood exclusion clauses against thousands of people who lost their homes? The Mississippi attorney general has filed suit to retroactively hold these flood exclusion clauses unenforceable; the plaintiffs’ bar seeks recovery under interpretations of the “valued policy law.” Are these suits tenable? What are the implications for the liability system and the insurance system? 

AEI will host a panel discussion to address these issues and others that the Gulf States’ legal systems will be forced to address in the coming months and years. The panel, moderated by AEI resident fellow and Liability Project director Ted Frank, will include Robert W. Klein, former chief economist for the National Association of Insurance Commissioners and current director of the Center for Risk Management and Insurance Research at Georgia State University; Martin F. Grace, Georgia State University professor and associate director of the university’s Center for Risk Management and Insurance Research; Adam Scales, a Washington and Lee University professor who specializes in tort and insurance law; and Joanne Doroshow, president and executive director of the Center for Justice & Democracy and co-founder of Americans for Insurance Reform.

The AEI Liability Project (www.liabilityproject.org) seeks to promote a better understanding of the scope and consequences of the liability crisis and to help ensure that political or legal reform efforts are aimed at the appropriate targets.