Joseph Sher blamed much of the damage to his New Orleans apartment complex on water that inundated the city when levees failed in the aftermath of Hurricane Katrina. He sued Lafayette Insurance Co. after the insurer denied most of his claims by saying they were caused by "flood" and therefore not covered by his hazard policy.

Sher won a jury verdict in state Civil District Court that put the firm on the hook for the cost of repairs. The state's 4th Circuit Court of Appeal also sided with Sher in November.

Now Sher's case is one of two scheduled to be heard Tuesday by the state's highest court that have high-stakes implications for Louisiana's insurance market.

Both cases going before the Louisiana Supreme Court involve disputes over policy language between insurance companies and property owners after 2005 hurricanes Katrina and Rita.

Lafayette and other insurers say their homeowner policies don't cover damage from any type of flooding, including water from a levee breach. "A flood is a flood, without regard to cause," said Jim Whittle, assistant general counsel for the American Insurance Association.

In a separate but similar case last year, the 5th U.S. Circuit Court of Appeals in New Orleans ruled that insurers aren't obligated to cover water damage from a levee failure.

Last week, the U.S. Supreme Court declined to hear appeals in that case from Xavier University and dozens of other Louisiana policyholders.

James Garner, one of Sher's lawyers, said the federal courts shouldn't have the last word in the dispute over damage from a levee breach. "One thing is certain: the Louisiana Supreme Court makes Louisiana law, not the 5th Circuit," Garner said.

The state Supreme Court also was scheduled to hear arguments Tuesday in a case centered on Louisiana's Valued Policy Law, which applies when a home is destroyed.

Mark and Barbara Landry, whose Vermilion Parish home was demolished during Hurricane Rita, sued Louisiana Citizens Property Insurance Corp. after the company denied their claim. The Landrys argued that the Valued Policy Law requires Citizens to cover all of the damage to their home, even if only part of the damage was caused by wind — a covered peril — while the rest was caused by flood water — a non-covered peril.

Citizens and other insurers say their policies cover damage from wind but not rising water, including wind-driven storm surge, and deny that the Valued Policy Law obligates them to pay for flood damage.

A woman who had her medical coverage canceled as she was undergoing treatment for breast cancer has been awarded more than $9 million in a case against one of California's largest health insurers.

Patsy Bates, 52, a hairdresser from Lakewood, had been left with more than $129,000 in unpaid medical bills when Health Net Inc. canceled her policy in 2004.

On Friday, arbitration judge Sam Cianchetti ordered Health Net to repay that amount while providing $8.4 million in punitive damages and $750,000 for emotional distress.

"It's hard to imagine a situation more trying than the one Bates has had to endure," Cianchetti wrote in the decision. "The rug was pulled out from underneath, and that occurred at a time when she is diagnosed with breast cancer, one of the leading causes of death for women."

Bates, a mother of two, said she screamed when she heard about the damage award.

"I am elated," she said.

Bates' attorney William Shernoff said he wanted other insurers to take notice of the award.

"We are going to put a stop to this practice," he said.

Health Net said it was implementing a freeze on policy cancelations that would last until the company sets up a third-party review panel to scrutinize cases.

"Obviously we regret the way that this has turned out, but we are intent on fixing the processes to maintain the public trust," spokesman David Olson said.

The award came a day after the Los Angeles city attorney sued Health Net, claiming it illegally canceled the coverage of about 1,600 patients. City Attorney Rocky Delgadillo also said the company illegally ran an incentive program in which it paid bonuses to an administrator for meeting targets of policy cancelations.

Health Net acknowledged that such a program existed in 2002 and 2003 but was subsequently scrapped.

"It's hard to imagine a policy more reprehensible than tying bonuses to encourage the recision of health insurance that helps keep the public well and alive," Cianchetti wrote in the Bates decision.

Bates had been insured with another company but was persuaded to switch over to a Health Net policy after an agent suggested she could save money.

She said she had undergone surgery to remove a tumor and had received her first two chemotherapy treatments when doctors stopped treating her because her bills were going unpaid.

"I was devastated. I didn't know what was going to happen," Bates said. "It's boggling that someone can do that to you."

Bates went on to complete her cancer treatment through a state-funded program.

Health Net also said it would review its practices and the way its brokers and agents are trained.

The Supreme Court refused Tuesday to offer help to Hurricane Katrina victims who want their insurance companies to pay for flood damage to their homes and businesses.

The justices rejected appeals from Xavier University and 68 other individuals and businesses seeking to allow their lawsuits against the insurers to go forward.

Xavier asked the court to step in after the 5th U.S. Circuit Court of Appeals ruled that the policies did not cover damage from floods, even those that resulted from man-made failures such as the collapsed levees in New Orleans.

Other cases working their way through state courts have so far reached differing conclusions. A Louisiana appeals court has said that language excluding water damage from some insurance policies was ambiguous. The Louisiana Supreme Court will hear arguments in that case on Feb. 26.

Xavier and the other plaintiffs had asked the federal court to allow the state Supreme Court to rule on their suits as well. The 5th Circuit refused and the U.S. high court upheld that ruling on Tuesday.

The Florida Office of Insurance Regulation on Wednesday asked a court to reinstate its prohibition against Allstate Corp. selling new policies in the state.

Florida Insurance Commissioner Kevin McCarty last week suspended Allstate after he said it defied subpoenas seeking materials showing how it sets prices and resolves claims. "Allstate has continued to do everything it can to keep from providing the documents," he said in a statement Wednesday.

Allstate will "continue to provide the documents requested in the subpoenas," said spokesman Adam Shores. "Our agents are open for business."

The background: Northbrook-based Allstate won emergency approval Jan. 18 from a state court in Tallahassee to resume selling coverage after filing a motion saying the regulator "abused its power by issuing an emergency order that is intended to function as a punitive stick." McCarty's office was given 10 days to explain why Allstate's license should be suspended.

A Florida court stayed an order on Friday from the state's insurance commissioner, clearing the way for Allstate Corp ALL.N to once again write new auto and other policies in the state.

Insurance Commissioner Kevin McCarthy had suspended Allstate on Wednesday from writing new policies because it had not fully complied with a subpoena to testify about its property insurance business.

The 10-day stay by the Florida First District Court of Appeal allows Allstate's more than 1,100 Florida agents to continue doing business, the insurer said in a statement.

In addition to car insurance, Allstate provides home insurance in Florida through Allstate Floridian Insurance and Allstate Floridian Indemnity, two independent subsidiaries of the parent company.

Allstate officials had appeared before state regulators earlier this week to testify on proposed rate increases of up to 41 percent in Allstate's property insurance business.

But state officials called off the hearing when Allstate officials refused to answer questions and to provide specific documents.

State investigators have been trying to determine if Allstate and other companies colluded to prevent property insurance rates from dropping despite legislative action last year to reduce premiums.

The issue is a major one in Florida, which has been reeling from a deteriorating real estate market and huge increases in premiums after eight hurricanes in 2004 and 2005, when insurers paid out about $35 billion in claims.

The suspension mainly affected new auto policies, since Allstate had said previously it planned to reduce its homeowner policy exposure in Florida while increasing its 14 percent share of the state's auto insurance business.

Radian Group Inc. (NYSE: RDN) issued a statment following recent volatility in the financial markets, which has affected its stock price.

The company said, "the company has a strong capital position and balance sheet. We believe actions taken during the third quarter, including the sale of the Sherman interest for approximately $278 million and the draw down of $200 million of the $400 million revolving credit facility, provide the company with financial flexibility and adequate liquidity for the long term."

Radian Group will report third quarter results on November 1st.

Shares of Radian Group sank 23.6% today to a new 52-week low. The stock closed at $9.99 today. A dividend cut from competitor MGIC Investment Corp. (NYSE: MTG) expanding the decline.

Almost two years after the devastating storm, our country’s Katrina victims still await closure and healing. Many have found themselves embroiled in legal disputes in pursuit of the opportunity to rebuild their lives. The harrowing task of settling insurance policy claims on their damaged or destroyed homes is just one aspect of this struggle.

Today, the 5th Circuit plans to hear an appeal on a Mississippi-based Katrina insurance coverage claim. The trial judge told these policyholders, a couple who believes their home suffered $130,253 in damages from the storm, that their policy did not cover damage resulting from a combination of water and wind. This distinction has been the subject of a great number of Katrina-related insurance disputes.

Last week, the 5th Circuit ruled against Katrina-affected insurance policyholders and overturned a U.S. District Court ruling that insurance companies had to pay its policyholders’ Katrina-related claims. The previous ruling held that ambiguous policy provisions made it unclear which forms of storm damage were covered, while the most recent ruling states that the policy is unambiguous.