A U.S. federal court has ruled that insurers do not have to pay for the flood damage in New Orleans following Hurricane Katrina in 2005.

Residential property insurance excludes flood damage, which is covered by a federal program.

New Orleans residents and Xavier University argued that the insurers should pay because the negligent design of a dam caused the flooding.

The court said the insurers were not liable even if there was negligence.

New Orleans flooded after a dam holding back the Mississippi River was breached in the wake of Hurricane Katrina.

The flooding cost hundreds of lives and caused billions of dollars worth of damage.

The insurers involved in the case were Allstate, Travelers and the mutual insurer State Farm.

The court’s decision overturned an earlier ruling by a lower court.

But the case will go on to further appeals, according to James Garner, a lawyer representing Xavier University.

“The issue will be argued again on September 12 in the Louisiana State Court of Appeals and, ultimately, at the state supreme court,” he said.