JACKSON, Miss. (Legal Newsline) – Mississippi Attorney General Jim Hood recently filed two lawsuits against Liberty Mutual Insurance and Safeco Insurance companies and their affiliates for what is alleged to be a failure to make adequate payments for the victims of Hurricane Katrina.

Katrina, considered one of the five deadliest storms in American history, ripped through the state of Mississippi and the Gulf Coast in August 2005, causing $125 billion in property damage in Mississippi, according to the complaint.

Mississippi Attorney General Hood
Mississippi Attorney General Hood

Officials of the Attorney General’s Office said the suits were filed to recover damages for losses the state suffered because Liberty Mutual Insurance and Safeco allegedly undervalued claims for Katrina wind damages to minimize payments and to foist the financial burden onto the state when adjusting homeowners’ insurance claims in the wake of the hurricane.

“Attorney General Jim Hood filed two suits on March 29, 2017,” Margaret Ann Morgan, communications director for the Office of the Attorney General, told Legal Newsline. “Mississippi established the Homeowner Assistance Program (HAP) after Katrina to provide financial assistance to Mississippi homeowners whose insurance did not fully cover the massive damage caused by the storm.”

Hood contended the insurance carriers Liberty Mutual and Safeco to minimize their own payouts allegedly characterized wind damage as flood damage because the insurers were obligated to pay for wind damage, but not flood damage. Flood damage was the responsibility of the state’s HAP program.

The complaint issued by the state also accused the defendants of making false statements and engaging in other improper acts to minimize its fiscal responsibility and liability for Katrina wind damage.

“Liberty Mutual essentially converted a program designed to help Mississippians recovering from Katrina into a subsidy for itself,” the complaint read.

Morgan said the insurance companies have costed the state.

“Improperly minimizing their own financial burdens and foisting the burden instead onto HAP, Liberty Mutual and Safeco caused the state of Mississippi to pay millions of dollars it could have used for other recovery efforts,” she said.

The state also contended the defendants had improperly removed the case to a federal court instead of Hinds County Circuit Court. Hinds County is where the HAP program is administered.

“We are filing motions to have the case returned to the state court,” Morgan said.

The state has retained the services of the private law firms of Watson Heidelberg Jones PLLC, Balch & Bingham and Pittman German Roberts & Welsh in the case.

Liberty Mutual spokesperson Glen Greenberg said officials of the company declined to make comment on the litigation.      

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