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It should not surprise anyone, least of all those in the insurance industry, that settling the many thousands of Hurricane Katrina-related homeowners’ claims would not be as simple and straightforward as the language of their claims suggests. But one particular legal decision has produced another sort of hurricane that is already unsettling carriers and has the potential to damage homeowners as well. The eye of that storm is directly over the state of Mississippi, and it has knocked a critical clause in the standard homeowners’ policy right off its foundation.

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