Taylor: U.S. should regulate insurers

The Sun Herald
January 11, 2006

GULFPORT - A lawsuit may be only the beginning of the insurance industry's disagreement with U.S. Rep. Gene Taylor, who said he'll fight in Congress for industry regulations.

Taylor is suing his insurer, State Farm Fire & Casualty Co., for refusing to cover the loss of his waterfront home in Bay St. Louis. State Farm attributed his damage to flooding, which is excluded from coverage.

Taylor has joined U.S. Sen. Trent Lott in suing State Farm through the Scruggs Katrina Group, headed by Lott's brother-in-law, Richard "Dickie" Scruggs. Their lawsuits demonstrate how unfairly South Mississippians are being treated, Taylor said, because he and Lott have generally been supportive of the insurance industry.

"To say that I had no wind damage, in my viewpoint, that is a bald-faced lie," Taylor said. 'It insults the intelligence of the residents of South Mississippi. I really think what they have done is fraudulent. I think it's deceptive to charge people like myself a hurricane deductible and then say when a hurricane hits, they're not going to pay."

State Farm spokesman Fraser Engerman responded with a prepared statement: "There's no question Katrina caused horrific damage in Mississippi and elsewhere along the Gulf Coast. We can't comment on this litigation. We handle each claim on its own merits and we pay what we owe based on our contract with the policyholder."

Taylor also said insurance companies should be regulated by the federal government, not just by states. He said they were granted an exemption from federal antitrust regulations in the 1930s, which may have made sense then, but doesn't now.

According to Mississippi Insurance Commissioner George Dale, insurance companies had paid $2 billion in claims by mid-December in the three Coast counties. Dale's office does not provide figures to show how much in claims remain unpaid, but Taylor has heard plenty of anecdotes from homeowners who have been denied coverage.

Studies show, Taylor said, that hurricane-force winds pounded the Coast for six hours before water from the Bay of St. Louis surged ashore. Furthermore, he said, tin was clamped like a taco shell to a tree branch 20 feet off the ground on his property. He said tin does not float.

His lawsuit is buttressed with the argument that his policy included a "hurricane deductible," implying that he would be covered for all damage a hurricane causes.

Taylor and his wife, Margaret, also a party to the suit, agreed to the hurricane deductible "in consideration for this full and comprehensive hurricane coverage, and therefore reasonably expected that any such hurricane damage would be covered under the subject policy."

Taylor did have flood insurance, which he said will cover about one-third of his costs to rebuild a smaller house at a higher elevation.

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