By Steve Tuckey AND Mark Ruquet

In the aftermath of massive flooding caused by Hurricane Katrina, the insurance industry might face complicated coverage disputes with policyholders over whether they have legitimate wind damage claims.

Both Louisiana and Mississippi have so-called "valued policy" laws that could require carriers to pay full replacement value of property suffering total losses even if part of the damage is caused by flooding, which is a risk not generally covered by homeowner policies, noted Don Griffin, vice president for personal lines for the Property Casualty Insurers Association of America.

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