(CN) - Six Flags lost its bid to recover $150 million in flood damage from Hurricane Katrina from six of its seven insurers, because their policies explicitly barred coverage, the 5th Circuit ruled.
Six Flags submitted losses of $150 million to its insurers after the storm destroyed parts of its New Orleans amusement park.
Six Flags exhausted its primary coverage of $25 million, and tried to collect on its excess policies, which were capped at $425 million. However, the excess insurers limited their coverage to $5 million, citing sublimits that apply to flood loss.
The district court granted summary judgment to the insurance companies based on those sublimits. The excess policies unambiguously excluded "all loss of damage resulting from flood," the court noted.
The federal appeals court in New Orleans agreed with respect to six insurers, but ruled that Commonwealth Insurance Co.'s policy "creates an ambiguity" that calls for remand.
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