Nationwide Insurance Company and the Florida Office of InsuranceRegulation have reached an agreement for the company to re-examinewhat one official said were "millions in underpayment" of lastyear's hurricane damage claims.

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Under the agreement Columbus, Ohio-based Nationwide willcomplete an audit of claims from the 2004 hurricane season to findany instances when multiple deductibles were incorrectly applied toa claim and reimbursement was not made as part of Florida'smultiple deductible grant reimbursement program.

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The company and Florida authorities said the company agreed topay $250,000 in administrative costs for the investigationconducted by state regulators.

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It will also review its procedures and make additional paymentto policyholders for applicable sales tax, payment for use of ageneral contactor when needed for reconstruction and repayment ofdepreciation on loss estimates exceeding $10,000

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"I congratulate the insurance commissioner for reaching thisagreement with Nationwide," said Florida chief financial officerTom Gallagher. "The level of complaints my office received fromFloridians definitely indicated that consumers were not beingtreated fairly. This agreement should go a long way toward makingthe consumers whole."

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Mr. Gallagher's Department of Financial Services compiled thecomplaint files and hurricane deductible information used in theinvestigation and audits. And Mr. Gallagher department announcedthat unspecified "millions" in underpayments were involved.

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In a statement, Nationwide said it was pleased that it was ableto resolve the issue with the state.

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"It is significant the order noted no violations of the FloridaInsurance Code or any liability on Nationwide's part," the companysaid. "We feel this validates that Nationwide's handling of claimsfrom last year's storms was timely, efficient, and customerfocused."

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The company said that policyholders will be notified of thecompany's offer to re-examine their claims, and that, "to theextent policyholders feel their claims should be re-examined perthe order, Nationwide will re-review these claims."

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Hurricane claims handling issues have lately been in thespotlight following Hurricanes Katrina and Rita. In Texas, thestate Department of Insurance and Attorney General Greg Abbottobtained a restraining order to force Allstate to stop denyingtemporary living expenses to homeowners unable to reenter homes hitby Hurricane Rita. Allstate cited a company policy requiringdocumentation of damages.

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