Mississippi Attorney-General Jim Hood has angered US insurers by demanding flood exclusions in policies should be voided for claims arising from Hurricane Katrina.

Insurers say if the complaint is successful, every legal contract in the US would be undermined.

Mr Hood filed a civil action against a number of major insurers, seeking to declare void and unenforceable flood exclusions in property and casualty policies issued to Mississippi Gulf Coast residents.

“All that the people have left is hope and I’m not going to allow an insurance company to take that away,” Mr Hood said. “Although some insurance companies do the right thing, I won’t allow the others to take advantage of people hurt by Hurricane Katrina.”

Mr Hood’s complaint says “the provisions at issue attempt to exclude from coverage loss or damage caused directly or indirectly by water, whether or not driven by wind”.

Mr Hood says he’s also hopeful “that next week we will be able to stop unscrupulous insurance adjusters from requiring people to sign away their rights to flood damage claims in exchange for a significantly smaller amount which will be used for immediate living expenses”.