Miss AG to file re$60 billion Katrinia claims that may be denied as "flood

[papau]

Personal Finance
Insurers May Face Flood Lawsuits in Mississippi
By Theo Francis
15 September 2005
The Wall Street Journal
Mississippi Attorney General Jim Hood is considering suing insurers to force them to pay flood damage from Hurricane Katrina that could total billions of dollars, seeking to override decades-old exclusions in standard homeowners' policies, two people familiar with the matter said.

The attorney general's examination of legal moves comes as tens of thousands of Mississippi homeowners are grappling with the cost of rebuilding homes that in many cases were badly damaged by the huge storm surge that accompanied the category-four hurricane's strong winds. Mr. Hood and a spokesman for his office couldn't be reached for comment late yesterday.

Standard homeowners' policies cover wind damage, not flooding. Yet fewer than one in five Mississippi homes and businesses in areas most at risk of flooding hold policies from the National Flood Insurance Program, according to federal figures. While some government grants are available to uninsured flood victims, such homeowners typically rebuild with low-interest federal loans.

Any legal action by Mr, Hood, which could be announced this week, would be expected to meet resistance from the insurance sector. Insurers cannot afford to pay flood damage from Katrina because they "have never collected a cent of premium for flood insurance," said Robert Hartwig, chief economist for Insurance Information Institute, a New York trade group. He said insurers would argue that "the flood exclusion in homeowners' policies is well-established in all states . . . That is why there exists a national flood-insurance program" and many people "have been paying flood premiums for decades." <snip>


http://integrate.factiva.com/en/track/article.asp?SummaryView=true&
http://money.cnn.com/2005/09/14/news/economy/katrina_lawsuit/index.htm

[Rowdyboy]

1. Jim Hood is a good man and Attorney General....He's about the best

we have left in a position of influence in Mississippi. Hopefully, he can scare some of the insurers into compromise. Hurricanes do bring floods, but blaming all the damage on the floods is ridiculous. Its just a way for fat insurance executives to cut out on payuing what they owe.

[papau]

2. I agree :-)

:-)

[napi21]

3. Doesn't this totally depend on the fine print in the policies?

I like the idea that this AG is attempting to help the flood victims, but does his suit stand any chance at all?

Insurance companies are very good at hiding stuff in the fine print that the insured only finds out when they have to file a claim.

[papau]

4. If it is wet it is not covered unless tree fell and caused a hole in Roof

At least that is what the Corporate Casualty insurers want.

And the corporate world may well get what they want (the idea is to force everyone to add "flood insurance riders and premium" so as to grow the $400 billion surplus capital nest egg that casulty insurance folks have now.)

Rule WAS if the insurance company could not prove the water was not "wind-blown", they had to pay on policies that did not have "flood" insurance.

During the Reagan/Bush/Bush years, state laws reflected the Reagan greed is good thought, so the rule is changed in some states.