Cohen Milstein Hausfeld & Toll Files Lawsuit on Behalf of Hurricane Isabel Victims.

Business Editors/Legal Writers

WASHINGTON--(BUSINESS WIRE)--May 11, 2004

Today a class action lawsuit against various insurance companies was filed in United States District Court, Baltimore, Maryland alleging that the insurance companies failed to deliver the promised benefits to thousands of persons who held flood insurance policies and suffered damage to their houses in September 2003 from Hurricane Isabel.

Thousands of homeowners in Maryland, North Carolina, Virginia, West Virginia, Delaware, New Jersey and the District of Columbia experienced devastating damages from flooding during Hurricane Isabel. Each was insured against flood losses by insurance companies participating in the National Flood Insurance Program, a federal program designed to protect homeowners from losses associated with a flood catastrophe. After the massive storm, these insurers mishandled claims from thousands of Hurricane Isabel victims and ultimately failed to pay proceeds to which the policyholders were entitled. Delays and failures in the handling of these claims have left thousands of people living for months in trailers, temporary shelters and rental apartments while their homes sit uninhabitable.

"The treatment of Hurricane Isabel victims by the companies that provided flood insurance is shameful," said Andrew N. Friedman, who heads the consumer practice at Cohen, Milstein, Hausfeld & Toll, P.L.L.C. in Washington, D.C. and represents the plaintiffs in this case. "What makes the insurance companies' conduct so offensive is that their egregious treatment of the flood victims was not merely limited to isolated events, but rather represented a uniform and systemic attempt to improperly deny or significantly reduce the size of the payout of flood claims," said Friedman.

Today's lawsuit alleges wrongful conduct, including:

-- Flood victims were uniformly told that they would not be paid

if they did not sign the insurance company's adjuster's proof

of loss within 60 days. As a result, many policyholders signed

proofs of loss prepared by insurance company adjusters, even

though they strongly believed that the adjusters had

underestimated both the scope of damage and the associated

costs of repair on their properties.

-- The insurers settled claims using price data and construction

estimating software that did not reflect the actual cost of

repair and renovation work following a natural disaster. As a

result, many Hurricane Isabel victims have been forced to

settle their claims at a fraction of the actual cost of

repair.

Victoria Nugent, also of Cohen, Milstein, Hausfeld & Toll, explained the essence of the dispute: "If a homeowner paid for $200,000 in flood insurance and has been told by a local contractor that it will cost $200,000 to repair his house, we think that the insurer should pay the replacement cost up to policy limits. But that hasn't been happening."

The Complaint seeks injunctive relief requiring defendants to review and recalculate all claims using material and labor pricing data that accurately reflect the cost of repairing and replacing flood-damaged housing in the affected communities; restitution of all flood insurance premiums paid by the flood victims for policies in force during September 2003 and disgorgement by defendants of all profits and compensation paid to defendants for issuing and servicing the insurance policies.

A copy of today's complaint is available on the Cohen, Milstein website at www.cmht.com.