Canadian Underwriter

Mississippi AG sues insurance industry

September 16, 2005   by Canadian Underwriter

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Mississippi Attorney General Jim Hood has filed a complaint and a motion for a temporary restraining order against the insurance industry, seeking to declare void and unenforceable certain provisions contained in property casualty insurance policies issued to Mississippi Gulf Coast residents excluding coverage from damage caused by Hurricane Katrina.
In a press release, Hood is quoted as saying: “All that people have left is hope and I’m not going to allow an insurance company to wrongfully take that hope away. Although some insurance companies are trying to do the right thing, I won’t allow the others to take advantage of people hurt by Hurricane Katrina.”
The provisions at issue attempt to exclude from coverage loss or damage caused directly or indirectly by water, whether or not driven by wind.
Hood’s complaint, filed as a civil action in the Chancery Court of Hinds County, Mississippi, First Judicial District, alleges that issuance of such insurance policies violates the Mississippi Consumer Protection Act.
The complaint goes on to say these policy provisions should be strictly construed against the insurance companies that drafted the policies and their exclusions.
Hood has asked the court to issue a temporary restraining order that would stop insurance companies from asking property owners to sign documents stating their loss was caused by flood or water — the basis for policy exclusions — as opposed to wind. The restraining order would also prevent insurance companies from using using water exclusions to deny or reduce coverage for hurricane damage or loss.
A.M. Best reports that Nationwide Mutual Insurance Co. is the lead defendant in the case, and that other insurers named include Mississippi Farm Bureau Insurance, State Farm Fire & Casualty Co., Allstate Property & Casualty Insurance Co. and United Services Automobile Association.

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