July 20, 2006
Did your agent mislead you? Katrina Insurance Trial Update!
Like I pointed out in an earlier post about the Katrina insurance trial, the things that the insurance agent tells you while you buy your homeowners policy, is being raised. The case leans heavily on the agent who allegedly told the Leonards that they do not require a separate flood policy.
Insurance agent Jay Fletcher is feeling the heat as several other Nationwide policyholders testified that he either told them they didn't need flood insurance or convinced them that their policies covered all forms of hurricane damage.
Trial highlights:
1. Paul Leonard testified that, after Hurricane Georges hit the Gulf Coast in 1998, he asked Fletcher if he needed flood insurance and the agent allegedly told him that he does not need flood cover.
2. Pascagoula chiropractor, Munson Hinman, said he walked into Fletcher's office with a check to purchase flood insurance months before Katrina, but the agent talked him out of it.
3. After Katrina, Nationwide paid Hinman more than $136,000 for the damage to his home, including damage from storm surge, even though he didn't have flood insurance.
4. The agent has denied saying anything like that to Leonard or others.
5. Nationwide said that the flood exclusion in its policies extends to "storm surge" even though that term wasn't written into the Leonards' policy until after Katrina's wind-driven water inundated thousands of homes far from flood zones.
6. Leonard’s attorney, Scruggs argued that Fletcher's alleged assurances about the scope of coverage make Nationwide liable for all the damage, be it wind or water.
A clear case of misleading the insured is what it looks like to me and the case also calls for insurance companies to have better monitoring of their agents doings. Looks like if the Fletcher part is proved, Nationwide could end up paying the Leonards and many more.
However, if this case actually looks into the “Wind vs. Water” issue and makes a ruling – then it will be a landmark ruling for homeowners affected by hurricane Katrina. The case is approaching closing arguments.
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