Congressman Gene Taylor (D-Miss.) has called for a congressional investigation into the practices of insurance companies in the aftermath of Hurricane Katrina. In a January 5 letter to Rep. Barney Frank (D-Mass.), chairman of the House Committee on Financial Services, Taylor asked for hearings on “the denial of thousands of Katrina wind claims wherever insurers could blame flooding” and “excessive premium increases, market withdrawals, and other actions to force states to make concessions or to assume more coastal risks.”

Hundreds of Katrina victims, including Taylor and Sen. Trent Lott (R-Miss.) are suing their insurance companies after their claims were denied, in many cases based upon carriers’ determination that damage had been caused by water from storm surges, which was not covered, as opposed to wind damage, which was covered.

“I have long suspected that State Farm, Allstate, Nationwide and a few other insurers agreed to aggressively deny Katrina wind claims as they had never done before,” Taylor wrote. “One company would not have been able to get away with blanket denials if the others had been paying claims.”

Miss. Congressman Calls for Federal Probe into Insurers (Insurance Journal 1/10/07)

January 17, 2007