Gonzo said:
http://www.cbc.ca/story/world/national/2006/08/15/katrina-flood-insurance.html
Why get insurance?
You buy insurance that specifically delineates the line of coverage.
Here in Florida, insurers are leaving the state because of the damage. People are turning towards the state government to insure their homes. This decision would have caused more companies to reduce coverage in the Gulf region.
Besides, like the article said
"It's a favorable first decision for the industry," said Fox-Pitt Kelton analyst Gary Ransom. "I never really had much doubt that this was the way it was going to work out. There's a lot of precedent for this. It's not like we're interpreting these contracts for the first time."
After the hurricanes, I watched live on TV a politician from Mississippi saying they were going to make the insurance companies pay for the damage,
even if policies specifically excluded hurricanes. So its not surprising someone went to court to expand coverage on their residence.