Insurers facing high claims costs as a result of Hurricane Katrina have won a court battle over water damage claims. A US Federal Court judge ruled last week that the insurers do not have to cover water damage resulting from the hurricane for policyholders who did not purchase flood insurance.

The ruling will apply in Mississippi for all Katrina-related claims, clarifying an issue that has dogged insurers’ relations with claimants. The judge has now made it clear that the standard flood exclusion applies to the effects of storm surge.

The ruling comes after a recent lawsuit filed by a Mississippi resident who suffered more than $US130,000 ($171,055) damage during the event and attempted to sue his insurer, Nationwide Mutual Insurance, for water and wind damage.

The policy covered storm damage but excluded water damage.

The judge ruled the water damage was a result of wind damage during the hurricane and $US1228 ($1616) should be paid for window damage and cleaning expenses above the water line. The insureds had not purchased flood insurance prior to the hurricane.