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

Sher won ajury verdict in state Civil District Court that put the firm on thehook for the cost of repairs. The state's 4th Circuit Court of Appealalso sided with Sher in November.

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

Bothcases going before the Louisiana Supreme Court involve disputes overpolicy language between insurance companies and property owners after2005 hurricanes Katrina and Rita.

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

In a separate but similarcase last year, the 5th U.S. Circuit Court of Appeals in New Orleansruled that insurers aren't obligated to cover water damage from a leveefailure.

Last week, the U.S. Supreme Court declined to hearappeals in that case from Xavier University and dozens of otherLouisiana policyholders.

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

Thestate Supreme Court also was scheduled to hear arguments Tuesday in acase centered on Louisiana's Valued Policy Law, which applies when ahome is destroyed.

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

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

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

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

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

"It's hardto imagine a situation more trying than the one Bates has had toendure," Cianchetti wrote in the decision. "The rug was pulled out fromunderneath, and that occurred at a time when she is diagnosed withbreast 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.

HealthNet said it was implementing a freeze on policy cancelations that wouldlast until the company sets up a third-party review panel to scrutinizecases.

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

The award came a day after the LosAngeles city attorney sued Health Net, claiming it illegally canceledthe coverage of about 1,600 patients. City Attorney Rocky Delgadilloalso said the company illegally ran an incentive program in which itpaid bonuses to an administrator for meeting targets of policycancelations.

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

"It'shard to imagine a policy more reprehensible than tying bonuses toencourage the recision of health insurance that helps keep the publicwell and alive," Cianchetti wrote in the Bates decision.

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

Shesaid she had undergone surgery to remove a tumor and had received herfirst two chemotherapy treatments when doctors stopped treating herbecause 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.