A U.S. appeals court has ruled that three major insurers do not have to pay claimes related to flood damages in New Orleans, even if “negligence” caused flooding that inundated the city during 2005’s Hurricane Katrina, Reuters reported.

Katrina pounded the low-lying port city with powerful winds and a storm surge that breached levees constructed to protect from surrounding waters. The flooding that followed cost billions in damages and hundreds of lives.

Residents of the area, along with Xavier University, sued Allstate Corp., Travelers Cos. Inc. and State Farm.

Residential property insurance policies exclude flood coverage, which is provided under a federal program. But the plaintiffs said that, because the negligent design, construction and maintenance of the levees were responsible for the breaks, the insurers should pay claims on their homes and properties.

The U.S. Court of Appeals for the 5th Circuit, however, ruled that the insurers’ contracts were valid. Even if the construction of the levees was faulty, the resulting floods were excluded from coverage, the court said.

An attorney for Xavier University said the case would be argued again Sept. 12 in the Louisiana State Court of Appeals and, ultimately, at the state supreme court.