Miss. Sues Insurers for Storm Coverage
- From: "tiny dancer" <tinydancer@xxxxxxxxxxx>
- Date: Fri, 16 Sep 2005 01:13:28 -0400
Certainly doesn't seem like a fair lawsuit. People should know what their
insurance covers and what it doesn't. Flood insurance is available and
should be purchased by people who live in flood prone areas IMHO. Most
homeowners policies cover water damage from say a tree falling on your
house, or shingles blown off in a storm. But they do not cover *flooding*.
Miss. Sues Insurers for Storm Coverage
By DUNCAN MANSFIELD
JACKSON, Miss. (AP) - Mississippi on Thursday sued insurers to force them to
pay billions of dollars in flood damage from Hurricane Katrina, saying
standard insurance polices have led homeowners to believe they are covered
for all hurricane damage, whether from high winds or storm surges.
To deny coverage to those whose homes were wiped out by the storm surge, but
lacked flood insurance, is ``taking advantage of people in the most dire
straits,'' said Attorney General Jim Hood, who filed the lawsuit against
five major insurers.
``We intend to ... make sure the insurance companies pay all that they owe
these people on the coast,'' he said.
Hood said storm surge damage has been estimated at $2 billion to $4 billion.
He asked a Chancery Court to void provisions in the policies that attempt to
exclude from coverage losses or damages directly or indirectly caused by
water, whether wind-driven or not. He said he would seek a restraining order
next week pending a full hearing.
Only about 30 percent of the houses in disaster-struck portions of
Mississippi and Alabama had flood insurance, according to Federal Emergency
Management Agency estimates.
Allstate Property and Casualty Insurance, one of the companies named in the
lawsuit, said in a statement that it was unfortunate the litigation had
begun so early in the recovery process.
``The fact is flood insurance protection has been offered by the federal
government for nearly four decades precisely because flood damage is not
covered by private insurers like Allstate,'' company spokesman Michael
Trevino said.
Chicago-based Property Casualty Insurers Association of America, an industry
group, said the lawsuit threatened to undermine the viability of every
insurance policy in the state and the integrity of every legal contract in
the nation.
Chief Executive Ernie Csiszar said the action was also unfair to consumers
who have paid the federal government for flood insurance.
``This would establish a dangerous precedent and expose insurance companies
to potentially billions of dollars in claims costs for a risk in which not
one dollar of premium was collected,'' he said. ``This lawsuit is about
politics, not fairness or justice.''
Robert Begnaud, a retired shrimper whose modest Biloxi house three-quarters
of a mile from the beach was knocked off its foundation, was pleased to hear
about the lawsuit. His insurance company told him, he said, that it might
only be covered for a new tin roof. ``But I mean they can't fix the roof
because there ain't no house,'' he said.
Katrina destroyed more than 68,000 homes, apartments and condominiums in the
state's six southernmost counties, and caused major damage to about 65,000
residences, according to a preliminary survey by the American Red Cross.
Many homes were destroyed by an up-to-30-foot wall of water driven ashore by
the hurricane's Category 4 winds.
In Louisiana, a group of homeowners sued 16 insurance companies Thursday,
asking a state district court to rule that neglect and wind damage caused
the flood that inundated thousands of homes in Orleans and Jefferson
parishes.
Breaches in the levees which ring the city allowed the water in, so the
floods were not caused by an ``act of God,'' according to the lawsuit.
The Louisiana lawsuit, filed by 14 couples, a homeowner and one business,
says the city might not have flooded had levees and floodwalls remained
intact. That means the flood doesn't meet the ``rising water'' or ``act of
God'' exclusions common to insurance policies, it contends.
In his lawsuit, Hood said residents and property owners on the Mississippi
Gulf Coast purchased standard policies from the defendants ``for the primary
purpose of insuring against any damage that could possibly result from
hurricanes originating from the Gulf of Mexico.''
The suit claims the flood exclusions violate state public policy, contradict
common law and are an unfair or deceptive trade practice.
The lawsuit also names the Mississippi Farm Bureau Insurance, State Farm
Fire and Casualty Co., United Services Automobile Association, Nationwide
Mutual Insurance Company and other unidentified insurers unknown to the
state who offer similar policies.
Allstate: http://www.allstate.com
Miss. Farm Bureau: http://www.msfb.com
State Farm: http://www.statefarm.com
Miss. Attorney General: http://www.ago.state.ms.us
.
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