Emotions are running high over the post-Katrina clean-up

The claim has been made by Mississippi Attorney General Jim Hood who has launched legal proceedings.

He said representatives for the firms had been asking people to sign forms saying they sustained flood damage, which is not covered by their policies.

All five companies have strongly denied the accusations.

"I want the insurance companies to pay what they actually owe the people of Mississippi," he said, adding that he thought their representatives were "unconscionable".

Strong denials

The five companies being sued by Mr Hood are Nationwide Mutual Insurance, Mississippi Farm Bureau Insurance, State Farm Fire and Casualty, Allstate Property and Casualty, and United Services Automobile Association.

Jim Hood has called the insurance firms 'unconscionable'

Mr Hood said that the firms are demanding policyholders sign the forms in order to gain an immediate cheque to cover living expenses.

"The allegations made by the Mississippi Attorney General are unfounded," said Nationwide Mutual Insurance.

"Our company is absolutely not asking policyholders to acknowledge damage is flood related in order to receive a cheque for living expenses."