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Mississippi sues insurance companies over Katrina payouts

[JURIST] Mississippi Attorney General Jim Hood [official website] announced Thursday that his office had filed a civil suit [PDF complaint] against five national insurance companies - Mutual Insurance Co., State Farm Fire and Casualty Co., Allstate Property and Casualty Co., the United Services Automobile Association and Mississippi Farm Bureau Insurance - seeking a declaration that provisions in their insurance contracts avoiding liability for property damage of the type inflicted by Hurricane Katrina are null and void. In a press statement [PDF] Hood said:

The Complaint asks the Court to declare that certain insurance contract provisions are void and unenforceable as the same are contrary to public policy, are unconscionable, and are ambiguous. The provisions at issue attempt to exclude from coverage loss or damage caused directly or indirectly by water, whether or not driven by wind. The Complaint states that these provisions should be strictly construed against the insurance companies who drafted the insurance policies and their exclusions. The Complaint also states that the issuance of such insurance policies violates the Mississippi Consumer Protection Act.
The state is also asking for a temporary restraining order to block the companies from having insurance claimants sign declarations that their losses were caused by flooding or water rather than wind, thereby limiting their ineligibility for compensation. Said Hood, "I'm hopeful that next week we will be able to stop unscrupulous insurance adjusters from requiring people to sign away their rights to ‘flood damage’ claims in exchange for a significantly smaller amount which will be used for immediate living expenses. I want to encourage the people to continue to fight and I’ll do everything I can to make sure that insurance companies pay what they owe." AP has more.

Meanwhile in Louisiana Thursday, 14 couples, an individual homeowner and a business launched a legal action against 16 insurance companies in state court asking it to rule that neglect and wind damage caused the levees around New Orleans to break, disqualifying them as an "act of God" traditionally cited by companies as avoiding insurance liability. The plaintiffs are asking to have their suit certified as a class action. AP has more.

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