MISSISSIPPI ATTORNEY THREATENS CLASS ACTION LAWSUIT AGAINST STATE FARM, ALLSTATE, NATIONWIDE AND OTHERS
Mississippi attorney Richard F. Scruggs said he will launch a class action lawsuit on behalf of Mississippi and Alabama Gulf Coast resident against State Farm, Allstate, Nationwide and other property casualty insurance companies.  The suit, Scruggs said, “will seek to compel the insurance companies to honor insurance obligations that the companies are seeking to reduce or eliminate through loopholes and deceptively-written policy exclusions.” 
 
According to Scruggs, insurers “are attempting to minimize their hurricane coverage by intentionally misclassifying the hurricane’s [Katrina] destruction as mere flooding.”  Scruggs said the suit is part of a coordinated legal effort involving attorneys throughout the Louisiana, Mississippi and Alabama region.

The National Association of Mutual Insurance Companies (NAMIC) called the legal actions proposed by Scruggs “baseless” and an “annoyance” that “will only serve to mire recovery in a judicial briar patch instead of getting claims settled and putting lives back together.”
 
MISSISSIPPI ATTORNEY GENERAL SUES TO DECLARE FLOOD EXCLUSIONS ‘UNENFORCEABLE’
Mississippi Attorney General Jim Hood has filed suit in Mississippi’s First Judicial District against the insurance industry seeking to declare void and unenforceable certain provisions excluding flood coverage contained in property casualty insurance policies issued to Mississippi Gulf Coast residents. 
 
Hood alleged the flood exclusions are unconscionable, ambiguous, violate the Mississippi Consumer Protection Act and should be strictly construed against the insurance companies that drafted them. 
 
In addition, Hood asked the Court to issue a Temporary Restraining Order to immediately stop insurance companies from allegedly asking property owners to sign a form saying damage to their property was flood related in order to get checks for living expenses.
 
NATIONWIDE DISPUTES MISSISSIPPI ATTORNEY GENERAL’S ALLEGATIONS
Nationwide has described as “false” Mississippi Attorney General Jim Hood’s allegations that Nationwide is asking policyholders to acknowledge that damage to their property is flood related in return for checks for living expenses.  Nationwide said it does not own a company called Nationwide Flood Insurance Co., as alleged in legal action filed by the Attorney General, and the homeowners insurance policies it offers, the company said, contain “well-established flood exclusions” that have been “long-recognized and relied upon.”  If flood exclusions were to be deemed null and void, Nationwide said, insurance policyholders across the country would be negatively impacted.
 
NAMIC CALLS MISSISSIPPI ATTORNEY GENERAL’S EFFORTS ‘OUTRAGEOUS’
The National Association of Mutual Insurance Companies (NAMIC) called “outrageous” what it described as Mississippi Attorney General Jim Hood’s efforts to retroactively seek changes in insurance coverage previously scrutinized and approved by Mississippi’s Department of Insurance. 
 
The typical homeowner’s policy covers wind damage but not damage by floods,” NAMIC Senior Vice President Roger Schmelzer said.  To rewrite insurance policies after the fact, he said, would cause “a grossly unfair outcome.”  Schmelzer said if Hood’s motion to secure a temporary restraining order against insurance companies trying to pay claims were to succeed, the claims-paying process would come to a halt and consequences for Mississippians and the Mississippi insurance industry would be profound and unintended. 
 

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