Mississippi Insurance Commissioner George Dale held a public hearing on a proposed insurance bill of rights, saying the provisions would help policyholders understand exactly what coverage they have.
Dale hopes to have the provisions included in policies by April, though he says some insurers claim it will be too difficult to incorporate the bill of rights into their policies by then.
The need for such provisions became apparent as Hurricane Katrina victims began filing claims after the unprecedented storm, only to see their claims rejected for lack of coverage, Dale said.
“After the storm we found that many policy holders were inadequately insured or did not fully understand the insurance they had purchased,” Dale said. “The outline of coverage checklist will give policy holders a quick reference to what is covered or excluded in their insurance policies and where that information can be located in their policies.”
After Katrina devastated the south Mississippi Aug. 29, 2005, many Gulf Coast residents said they had been led to believe their policies covered wind-driven water, or storm surge, only later to have their claims denied for lack of flood insurance.
The issue has spawned thousands of lawsuits, including a mass litigation that led to a multimillion settlement this week between hundreds of policyholders and State Farm Fire and Casualty Co.
The bill of rights would require all insurance companies to include clear descriptions of what a policy covers — fire, lightening, explosion, named windstorm damage, flood, earthquake, collapse, mold or theft. It would also require companies, among other things, to make clear whether the policies cover contents and if there is additional coverage for items such as debris removal and loss assessment.
Senate Insurance Committee Chairman Dean Kirby, R-Pearl, said Dale doesn’t need legislative approval to require insurers to include the provisions in Mississippi policies.
But, Kirby said, “If it helps the policy holders of Mississippi, then I’m all for it.”
Dale said he based the provisions on similar policies in Maryland and Florida and suggestions from the public.
“The bill of rights is not something we did as a (publicity) stunt,” Dale said. “It is something we felt needed to be addressed after all the issues that came to light after the storm.”
No one from the public spoke Friday at the hearing in Jackson, but Dale said his office would take written suggestions through Feb. 2.
Dale said the hearing was held in Jackson, not on the coast where many people are still struggling to recover from Katrina, because the bill of rights affects policy holders throughout the state.
“We think this is a statewide issue, not just a coast issue,” Dale said, adding that he was surprised more people didn’t show up. But many people have written his office with suggestions, he said.
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