Miss. AG Hood: Insurance Companies Intentionally Delaying Paying Katrina Claims
April 17, 2006
Posted April 22, 2006
Mississippi Attorney General Jim Hood has sharply criticized insurers' denial of Hurricane Katrina claims in Mississippi, saying companies are "in lockstep like Nazis locking arms, coming at those people down there on the coast."
Hood has a lawsuit pending in state court over questions about what the insurance companies are obligated to pay.
"I think what insurance companies hope, they can bob and weave and drag it out and our taxpayer money will hit the ground down there and the pressure will be let off, and they can walk away," Hood said.
He spoke at a luncheon sponsored by the Capitol press corps and Mississippi State University's John C. Stennis Institute of Government.
Katrina left a wide swath of destruction across Mississippi, Louisiana and Alabama when it struck Aug. 29, and many homeowners have their own lawsuits pending against insurance companies.
Hood, a Democrat serving his first term as attorney general, filed a lawsuit Sept. 15 against five major insurers, including Allstate and State Farm, for refusing to cover damage caused by storm surge. Hood has said that the storm surge during Katrina caused an estimated $2 billion to $4 billion in Mississippi.
The attorney general's lawsuit was transferred from Hinds County Chancery Court to federal court a day after he filed it. On March 7, a federal judge sent the case back to state court.
Insurers have said many policies do not cover damage covered by wind-driven water and contracts can't be changed after a disaster to force the coverage.
In a separate lawsuit in federal court, a judge ruled this week that the parts of Allstate Insurance Co. policies that exclude damage from Hurricane Katrina's flood waters are "valid and enforceable."
Julie Rochman, a spokeswoman for the American Insurance Association, said Senter's ruling should end many attorneys' argument that damage from wind-driven water or "storm surge" isn't specifically excluded from coverage by Allstate's policies.
Hood said the public made payments that insurance companies should have made to victims of the Sept. 11, 2001, terrorist attacks, and he thinks the same could happen with Katrina.
"They figured out they can dump it off on us taxpayers and get away with it," he said of insurance companies. "And that's what they're trying to do in this instance, and it's a tremendous amount of money to us, to put our taxpayer money out there and cover something that they reap the profits off of."
The state next week is set to start accepting applications for $3.4 billion in federal grant money to help homeowners rebuild structures damaged or destroyed by Katrina. Congress approved the money earlier this year.
Homeowners in Harrison, Hancock, Jackson and Pearl River counties can qualify for up to $150,000 to repair or rebuild a primary residence. Vacation homes are not covered. The grants are intended to help people whose homes were damaged by water, despite having been outside the federally designated flood zone. The structure must have been covered by homeowners' insurance.
Gov. Haley Barbour has estimated that 29,000 homeowners could qualify for a grant.
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