INSURANCE COMPANIES BEING PROBED ON KATRINA CLAIMS

The Chicago Tribune recently reported that Mississippi Attorney General Jim Hood has convened a grand jury to investigate whether State Farm improperly denied Hurricane Katrina claims. Hood is looking into whether State Farm tried to pressure the engineering consultants they used to alter reports about how homes were damaged or destroyed by the storm. Hood's actions come after a number of State Farm claimants had filed civil lawsuits against the insurer claiming that State Farm tried to hide that wind had been the primary cause of their losses, and pointed to flooding instead. [The claimants' policies apparently did not cover flooding-related damages]. Hood recently subpoenaed records from State Farm and a Mississippi judge allowed the insurer until May 26, 2006 to provide the documents.

And Hood is taking a look at Allstate as well. In September, 2005 he filed a civil suit againt the "Good Hands" company fighting Allstate's attempt to contest certain hurricane claims by citing certain exclusions in the relevant policies. Hood took position in that case that the language relied upon by Allstate was too vague.