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Insurance Company Accused of Bad Faith in Mississippi Law Suit

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In yet another example of the insurance industry taking advantage of those that can least afford to be denied their legal rights, the conduct of Nationwide Insurance Company is under close scrutiny in response to the handling of claims for victims of Hurricane Katrina. A bad faith insurance lawsuit has been filed in Mississippi by a family insured by Nationwide for 10 years who was denied their rights under their policy as promised by their agent.

Opening statements were made July 10 by attorneys for a Pascagoula, Miss., couple and Nationwide Mutual Insurance Co. in a lawsuit that disputes the insurer’s denial of the couple’s claim for Hurricane Katrina-caused damages to their home.

Nationwide contends that their policy did not cover flooding and has paid only $1,600 toward the $130,000 in damage that Katrina caused to their home. The Ohio based insurer contends that most of the damage was caused by flooding.

While this case is unique in that the representations of the agent were relied upon by the family in acquiring the policy, it will set a strong precedent and tone for the many hundreds of other bad faith insurance cases also pending in response to this catastrophe.