State Sues Katrina Victims’ Insurers

Mississippi Atty. Gen. Jim Hood sued five U.S. insurance companies Thursday, saying adjusters had tried to trick Hurricane Katrina survivors out of millions of dollars in homeowner claims, as disputes over losses started to hit the courts.

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

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

“I want the insurance companies to pay what they actually owe the people of Mississippi,” Hood told reporters in the Hinds County Courthouse.

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

Nationwide Mutual Insurance, identified by Hood as a primary defendant, rejected his assertions.

“The allegations made by the Mississippi attorney general are unfounded. Our company is absolutely not asking policyholders to acknowledge damage is flood-related in order to receive a check for living expenses,” Nationwide said in a statement.

The company said policyholders were told upfront that their homeowner insurance did not cover flooding.

“If these long-recognized and relied-upon exclusions were to be deemed null and void, it would have a significant negative impact on insurance policyholders across the country,” the company added.

Hood also sued Mississippi Farm Bureau Insurance, State Farm Fire & Casualty Co., Allstate Property & Casualty Co. and United Services Automobile Assn.