A bill President Bush signed last week directs the Homeland Security Department to investigate how insurers have handled Hurricane Katrina claims. The legislation signed by President Bush on October 4, 2006, directs the inspector general of the Homeland Security Department to investigate insurer handling of Hurricane Katrina wind and flood damage claims.

The directive was added to the Homeland Security Appropriations Act by Sen. Trent Lott (R-Miss.), who lost a Pascagoula, Mississippi, home to Katrina and is now suing his insurer. Specifically, the directive directs the inspector general to determine if insurance companies improperly attributed wind damage to storm surge flooding, thus pushing losses off onto the National Flood Insurance Program and the taxpaying public.  The inspector general must submit a report to Congress by April 1, 2007.

Insurer Practices to be Investigated (Biloxi MS Sun Herald 10/5/06)

October 11, 2006