Mr. Scruggs argued in the lawsuit that Nationwide Mutual Insurance and a Pascagoula agent, Jay Fletcher, "impliedly represented to plaintiffs that they would have full and comprehensive coverage for any and all hurricane damage," including storm surge.
By some estimates, the lawsuit, if successful, could add as much as $15 billion to the costs for insurers from Katrina, already estimated at $35 billion to $40 billion.
Nationwide insisted in a statement that "there is no ambiguity" in its policies, adding that hurricane coverage does not include losses resulting from flooding, including "flooding resulting from high tides or storm surges."
Mr. Scruggs said in an interview that the Leonards' home was damaged by a combination of storm surge, wind and rain. Mr. Scruggs said he planned to file individual lawsuits, rather than a class-action lawsuit.
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