Miss. official sues insurers over Katrina claims

By Carey Gillam
September 15, 2005

BILOXI, Miss., Sept 15 (Reuters) - Mississippi Attorney General Jim Hood sued five U.S. insurance companies on Thursday, saying adjusters have tried to trick Hurricane Katrina survivors out of millions of dollars in homeowner claims.

Adjusters for Nationwide Mutual Insurance Co. and other insurers asked policyholders to sign forms that acknowledged they sustained flood damage, which is not covered by homeowners' insurance, according to Hood.

Adjusters have cajoled victims to sign the forms, saying they are necessary to immediately receive a check for living expenses. The companies can use the sentence regarding flood damage against policyholders later, Hood said.

"They say they are not responsible," Hood told reporters in the still-closed Hinds County Courthouse. "I want the insurance companies to pay what they actually owe the people of Mississippi."

The suit, filed in county chancery court, asks for a temporary restraining order to stop the use of such forms.

Nationwide, identified by Hood as a lead defendant, did not immediately return a call seeking comment. Hood also sued Mississippi Farm Bureau Insurance, State Farm Fire and Casualty Co., Allstate Property and Casualty Co. and USAA (United Services Automobile Association).

Hood said more defendants could be added.

The Mississippi Insurance Department was planning a response to Hood's lawsuit, a spokeswoman said. Last week, the regulator urged insurance companies to conduct full inspections before determining cause of damage.

The difference is important. Damaged caused by wind or water falling into a structure, like through a hole, typically is covered. Damage from rising water, however, usually would be covered only by the National Flood Insurance Program, which is run by the U.S. Federal Emergency Management Agency.

Hood called the adjusters' moves "unconscionable."

"If the insurance companies do not back their policies, it will bankrupt southern Mississippi," he said.

Denying legitimate insurance claims based on a piece of paper would further victimize survivors, he added.

"Hope is all the people here on the Gulf Coast have left," he said. "I'm not going to let any insurance company take that away."

Copyright © 2005 Reuters

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