Monday, July 10, 2006

First Katrina Lawsuit Begins

Are insurance companies trying to avoid payment of claims resulting from Hurrican Katrina by blaming damage on flooding? A lawsuit underway in Mississippi is the first of many.

From The Associated Press:
GULFPORT, Miss. - Attorneys carried files and exhibits into a federal courthouse Monday for what they expect to be a groundbreaking trial on whether insurance policyholders who lost homes in Hurricane Katrina are entitled to recover losses that insurance companies claim were caused by flooding.

"A journey of a thousand miles begins with one step, and this is the first step," plaintiffs' attorney Richard "Dickie" Scruggs said as he arrived in court. "It's one case. If you win it, it's a huge win. If you lose it, you spin it the best way you can."

The lawsuit was filed on behalf of police Lt. Paul Leonard, who had taken out homeowner's insurance with Nationwide Mutual Insurance Co. long before Katrina pulverized his Pascagoula house on Aug. 29.

After the storm, Nationwide blamed the damage on water, not wind. The insurer said Leonard's policy didn't cover floods.