Insurers sued over Katrina

BILOXI - Mississippi Attorney-General Jim Hood sued five US insurance companies yesterday, saying adjusters have tried to trick Hurricane Katrina survivors out of millions of dollars in homeowner claims as disputes over losses started to hit the courts.

Adjusters for Nationwide Mutual Insurance and other insurers asked policyholders to sign forms that acknowledged they sustained flood damage, which is not covered by homeowners' insurance, Hood said.

Adjusters have cajoled victims to sign the forms, saying they are necessary to immediately receive a cheque for living expenses. The companies can use the sentence regarding flood damage against policyholders later, Hood said.

Nationwide flatly rejected his assertions. The company said policyholders are told up front their insurance does not cover flooding.

Damaged caused by wind or water falling into a structure, like through a hole, typically is covered.

Damage from rising water, however, usually would be covered only by the National Flood Insurance Programme, which is run by the US Federal Emergency Management Agency.

- REUTERS