Phoenix, Ariz.–Insurers could end up paying out billions morethan their exposure models predicted for hurricane losses in theGulf Coast if government officials and private attorneys succeed instripping policies of their standard flood exclusions, industryofficials here warned.
One key battle for insurers looking to defend their policieswill be fending off a lawsuit filed by Mississippi Attorney GeneralJim Hood. That action–along with other private lawsuits==seeks toforce the industry to pay homeowners flood claims, arguing in partthat language excluding flood damage is ambiguous.
The Hood lawsuit, which is now in federal court, seeks "toabrogate our contracts," said William E. Bailey, special counselfor the Insurance Information Center and head of the HurricaneInformation Center in Jacksonville, Fla.
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