JURIST - Paper Chase: Katrina insurance case going to trial in Mississippi

[JURIST] A judge in Mississippi Friday issued the first federal ruling on insurance litigation related to the Hurricane Katrina disaster [JURIST news archive], denying a request from Allstate Insurance Co. [corporate website] to dismiss a case brought by homeowners claiming that Allstate representatives falsely led them to believe that flood damage would be covered by their hurricane insurance policy, and that a separate flood insurance policy was unnecessary. US District Judge L.T. Senter [official profile] held that a trial would be necessary to determine the facts; if a jury believes the homeowners, Allstate will be liable for the damages that homeowners believed were covered. Senter also determined that damages caused by wind and rain must be covered under the hurricane insurance policies, even if the jury determines that flood damages are not covered.

Mississippi Attorney General Jim Hood [official website] is bringing a similar class-action suit [press release, PDF] in Mississippi state court and said he was optimistic about the federal court decision, although it will have no effect on the state suit. From Jackson, Mississippi, NBC affiliate WLBT has more.

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