Miss. AG Accuses Carriers of Cheating

Five major insurance companies were recently sued by Mississippi Attorney General Jim Hood, who charged that insurance adjusters attempted to cheat Hurricane Katrina survivors out of millions of dollars in homeowner’s claims. After Hood made his accusations, several other officials, including Gov. Haley Bar-bour and Insurance Commis-sioner George Dale stepped up to defend the carriers.

Hood’s accusations specifically mentioned adjusters for Nationwide Mutual Insurance Co. and others he claimed asked policyholders to sign forms to acknowledge flood damage, which is not covered by homeowners insurance. In his suit, Hood named Nationwide Mutual Insurance Co., State Farm Fire and Casualty Co., Allstate Property and Casualty Co. and United Services Automobile Association.

Hood claimed adjusters cajoled victims to sign forms, saying they were necessary to receive an immediate check for living expenses. He said the companies could use the flood damage acknowledgement later against policyholders.

After Nationwide became the center of the controversy, it issued a statement saying it wanted to “set the record straight.”

“The allegations made by the Mississippi attorney general are unfounded,” a Nationwide spokesperson said. “Our company is absolutely not asking policyholders to acknowledge damage is flood related in order to receive a check for living expenses. No such form or activity is sanctioned by Nationwide, nor does Nationwide own any company called Nationwide Flood Insurance Company as noted in the legal action filed.”

Gov. Barbour told the Associated Press he prefers to negotiate with insurance companies to help homeowners without flood insurance rebuild their property, saying a lawsuit could push the companies out of Mississippi.

Insurance companies contend homeowners should have bought additional flood protection. The governor said forcing the companies to pay for flood damage could bankrupt them and drive them elsewhere.

“It’s crucial that people who enter into contracts keep their contracts,” Barbour said. He added that insurance companies “must be held to these contracts.” But he said many people, particularly those not living in a flood plain, did not have flood coverage.

“For those people, we are working very hard so that if they don’t have insurance, or if they don’t have coverage, we can find a way to help them financially, help to make them whole,” he said.

Commissioner Dale sided with the governor. He asked the Missis-sippi congressional delegation to seek a bailout for those lacking insurance coverage.

“The insurance industry can take care of so many. The flood insurance program can take care of so many,” Dale said. “But there are still others out there that do not fit under either of those. We cannot let them just absolutely be made bankrupt. It would kill our economy.”