Nationwide, Allstate Grab State Farm Policies in Miss.

Nationwide and Allstate will insure homes along the Mississippi coast where the current insurer decided not to renew policies, officials said.

The State Farm Insurance action involves 892 policies within 1,000 feet of Mississippi Gulf Coast waters, an area devastated by Hurricane Katrina in 2005.

Mississippi Insurance Commissioner Mike Chaney said that Nationwide and Allstate agreed to pick up State Farm policies along the water, though it’s unlikely the insurers will provide wind coverage.

“I feel confident that the people on the Gulf Coast that have been canceled by State Farm will be able to buy insurance from Allstate and Nationwide and others that I have not announced,'” Chaney said.

Chaney said wind coverage is likely to be provided in the area only through the Mississippi Windstorm Underwriting Association, also known as the wind pool. The wind pool offers insurance in areas deemed too risky by private companies, which are paid for by assessments charged to any insurer that writes policies in the state.

Nationwide spokesman Joe Case confirmed the company has agreed to insure homes in the area “if the dwelling fits our underwriting criteria.” However, the company does not offer wind coverage in Mississippi’s three coastal counties.

April Eaton, an Allstate spokeswoman, said the company continues to write policies on the Mississippi coast if customers also use Allstate for their auto insurance. It helps them secure wind coverage through the wind pool.

State Farm is not renewing the policies because of “serious concerns about the legal environment in Mississippi and its impact on the Mississippi property insurance market,” the company said in a letter to Chaney.

State Farm had already stopped writing new policies in Mississippi after an intense legal battle with Attorney General Jim Hood over Hurricane Katrina claims. The dispute culminated in February 2007 with the company saying the state’s “legal and political environment is simply untenable” to write more policies in Mississippi.

State Farm also requested state approval for a rate increase that averages 13.6 percent. Most of the increases apply to the coast.

Hood responded to news of the requested rate increase by saying State Farm “has consistently made billions of dollars in pure profit annually before, during and after Katrina.”

“Jim Hood’s inflammatory and unfounded comments are a sad reminder of why Mississippi continues to be a volatile legal and business environment,” State Farm spokesman Jonathan Freed said. He said State Farm has paid more in claims than it has collected in premiums.

Topics Mississippi