Insurance Commissioner George Dale unveiled a proposed insurance bill of rights on Friday, saying the provisions would help Mississippi policyholders understand exactly what coverage they have.
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 claimed 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 hundreds 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.
According to Dale, the bill of rights would require insurance companies to include in plain language 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 like 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.