FWIW, this is how I understand USAA to regard the decision — they weren’t looking to get out of going to trial on this one, and they’re happy for the ruling that storm surge is included under “water damage.”

Nationwide, represented I believe by Mike Wallace, was the loser here, as the court squarely rejected its view that subsequent damage could negate coverage for an initial loss.

And the Fifth Circuit did get smacked around a bit. I liked this part (para. 48 n. 24 — all of 48 is good):

We can agree, but not without clarification, that “if wind and water synergistically caused the same damage, such damage is excluded.” Leonard, 499 F.3d at 430 (emphasis added). However, this Court is troubled by the conflation of the terms “damage” and “loss,” and the use of the term “synergistically.” “Synergism” is defined as “[t]he action of two or more substances, organs, or organisms to achieve an effect of which each is individually incapable.” Webster’s II New College Dictionary at 1118. The policy does not require the insurer to establish synergistic damage, only concurrent loss. “Synergism,” like “indivisible,” is found nowhere in the policy, and may be ill-suited for the wind/flood disputes of hurricane claims, generally, and the ACC clause at issue, specifically.

IOW, don’t import your own words into the clauses, silly feds!