Hurricane Katrina's torrential wrath may be a memory, but after a recent ruling, it seems insurers are still in the midst of the storm.

A federal judge in New Orleans dealt a blow to insurance companies, ruling that they should pay for Katrina's massive water damage. If upheld, the decision could cost the insurance industry billions of dollars more than the $41 billion they've already paid out in claims.

U.S. District Court Judge Stanwood R. Duval based his decision on the difference between flooding due to forces of nature and flooding due to human error. Unlike Mississippi, where the courts have sided with insurers, Louisiana presents a special case because levee failures contributed to flooding rather than high winds and downpours alone.

Companies named in the suit include State Farm Fire and Casualty Co., Allstate Corp., Travelers Property Casualty Co. of America and Hartford Insurance. Duval referenced the language of the various policies in his ruling, saying they were too ambiguous to exclude all coverage for flooding. However, he did make exceptions for State Farm and Hartford because their policies explicitly exclude flood coverage “regardless of cause.”