## Facts

- John and Claire Tuepker owned a Mississippi home insured under a State Farm homeowners policy effective August 9, 2005 to August 9, 2006.
- Hurricane Katrina struck on August 29, 2005, and the Tuepkers alleged the home and contents were completely destroyed, leaving only a slab.
- The policy covered wind damage but excluded “water damage,” defined to include flood, surface water, waves, tidal water, overflow of a body of water, and spray from any of these, “whether or not driven by wind.”
- The policy contained an anti-concurrent-causation (ACC) clause excluding loss caused by water damage “regardless of” whether other causes acted concurrently or in any sequence with the excluded event.
- The policy also had a separate hurricane deductible that increased the deductible for hurricane-related losses but did not alter covered or excluded perils.
- State Farm denied most or all coverage on the ground the loss was caused by excluded water damage (including storm surge) and that any combined wind-and-water loss was excluded by the ACC clause.
- The Tuepkers sued in federal court seeking contract damages and declaratory relief about the water exclusion, the ACC clause, and the hurricane deductible.

## Issues

1. Whether the policy’s water damage exclusion unambiguously excludes storm-surge damage associated with Hurricane Katrina.
2. Whether, under Mississippi law, the policy’s ACC clause is enforceable to bar coverage for loss caused by a combination of covered wind and excluded water, regardless of sequence.
3. Whether the hurricane deductible or other policy language makes the exclusions ambiguous, deceptive, unconscionable, or otherwise unenforceable.

## Decision

- The Fifth Circuit affirmed in part and reversed in part the district court’s denial of State Farm’s Rule 12(b)(6) motion.
- The court held the water damage exclusion is clear and enforceable, and storm surge falls within the excluded category of flood/tidal/surface water “whether or not driven by wind.”
- The court held the ACC clause is clear and enforceable under Mississippi law, contractually barring recovery for loss caused by both covered wind and excluded water, regardless of sequence.
- The court clarified that the policy still provides coverage for damage proven to be caused solely by wind, without contribution from water.
- The court rejected the argument that the hurricane deductible creates coverage or renders the water exclusion ambiguous, because a deductible provision affects the amount payable on covered losses rather than expanding covered perils.
- The case was remanded for further proceedings, including factual development and allocation between covered wind-only damage and excluded water or mixed wind-water damage.

## Legal Principles

- Under Mississippi law, unambiguous insurance policy terms are enforced as written; courts do not rewrite coverage grants or exclusions.
- A homeowners policy water damage exclusion that includes flood/tidal/surface water “whether or not driven by wind” unambiguously excludes storm-surge losses.
- An anti-concurrent-causation clause can validly exclude coverage for losses where an excluded peril contributes alongside a covered peril, regardless of sequence, thereby displacing efficient-proximate-cause analysis to that extent.
- A hurricane deductible provision does not create or expand coverage; it only adjusts the deductible applied to otherwise covered hurricane-related losses.
- Even where flood and ACC provisions are enforced, the insurer remains liable for damage that the insured can prove was caused solely by a covered peril (such as wind).

## Conclusion

The Fifth Circuit enforced State Farm’s flood exclusion and ACC clause under Mississippi law to bar coverage for storm-surge damage and mixed wind-and-water losses from Hurricane Katrina, while preserving potential recovery for damage shown to be caused solely by wind, and remanded for allocation of covered and excluded damage.


Tuepker v. State Farm Fire & Cas. Co., 507 F.3d 346 (5th Cir. 2007)