U.S. Rep. Taylor Joins Lawsuit Against Mississippi Insurer

U.S. Rep. Gene Taylor, D-Miss., has joined the thousands of Mississippians suing State Farm Fire & Casualty Co., challenging the insurance company’s refusal to cover property losses resulting from Hurricane Katrina.

Taylor’s lawsuit comes less than a month after U.S. Sen. Trent Lott, R-Miss., filed a suit against State Farm. Both Taylor and Lott are represented by Lott’s brother-in-law, attorney Richard “Dickie” Scruggs.

Taylor and his wife, Margaret, seek an insurance settlement on their waterfront home in Bay St. Louis. Lott wants a State Farm settlement on his Pascagoula home. Both homes were destroyed on Aug. 29.

“State Farm said (Taylor) had no wind damage,” said Beau Jex, Taylor’s chief of staff. “It makes you wonder, because all he had left was slab … it went from a two story home to a slab.”

Taylor had lived in the house since 1978 and was insured through State Farm for about 20 years.

Scruggs, best known for his success in taking on tobacco companies, is pursuing a court ruling requiring major insurance companies operating in Mississippi to pay for all damages from the hurricane.

The lawsuit is part of a continuing wind-versus-water-damage debate between insurance companies and policy holders on the coast. The battle has become a personal one for Scruggs.

“Given the fact that I grew up down there, and I raised my family down there, and I lost my home down there and all my neighbors were wiped out not only by Hurricane Katrina, but by hurricane insurance, yeah, it’s damn personal,” Scruggs said. “I’m very appalled at the corporate culture of the insurers trying to dodge their responsibilities.”

A group of law firms have agreed to work together as the Coast Katrina Group. The organization’s goal is to assist people who have lost their homes to Katrina and have had their insurance claims denied, Scruggs said.

The number of Mississippi households suing insurance companies continues to grow each day.

“It changes every hour, in terms of the number of people being denied,” Scruggs said. “But it’s in the range of 3,000 families.”

State Farm has become the target of many of the lawsuits, because it is one of the largest and because many policy holders in Mississippi had purchased the standard policy and an additional hurricane endorsement, Scruggs said.

The issue is whether a storm surge should be considered flooding, in which case thousands of hurricane victims would be left struggling to recover from the losses of their homes without help from their insurance providers.

Insurance companies say they shouldn’t have to pay for water damage for insurance holders who did not have flood policies. Scruggs insists the damage caused by storm surge cannot be defined as flooding.

State Farm declined to comment on the specifics of the lawsuit.

“Regarding Representative Taylor, there is no question Katrina caused horrific damage in Mississippi and elsewhere along the Gulf Coast,” said State Farm spokesman Fraser Engerman. “We cannot comment on this litigation. We handle each claim on its own merits, and we pay what we owe based on our contract with the policy holder.”

Gov. Haley Barbour has said he prefers to negotiate with insurance companies, saying lawsuits could force the companies out of Mississippi.

But state Attorney General Jim Hood, who filed a lawsuit on behalf of Mississippians with standard homeowner’s policies, says the companies should cover hurricane damage whether the loss is from wind damage or a storm surge. Hood says damages could cost billions.

Scruggs, who also lost his Pascagoula home, has promised to use his clout to get insurance companies to pay up.

Topics Lawsuits Catastrophe USA Carriers Hurricane Mississippi