Katrina Victims, Insurance Companies in Wind Vs. Water Dispute

BILOXI, Miss., Dec. 21, 2005 — -- It's the multibillion-dollar debate raging across the Gulf Coast: Was it Katrina's wind or water that caused the devastation?

Said Biloxi homeowner Marvin Hendrix: "I was completely destroyed mentally for a few days, but I said, 'You know what? We should not worry. We have hurricane insurance. Why should we worry?'" Little did he know.

All of Hendrix's 15 rental properties in Biloxi are damaged or destroyed. But his hurricane policy won't cover the losses. Hendrix's insurance company argues it is water damage, which is covered only by flood insurance.

"It can't be a flood because it was a result of the hurricane," Hendrix said. "Without the hurricane, there would have been no water."

The insurance industry -- facing $40 billion to $60 billion dollars in losses -- isn't budging, saying state-approved homeowner policy language is very specific and doesn't include flood coverage.

"Rising water -- whether it's tidal water or surface water -- that's flood. And it's simply not covered by traditional insurance," said Julie Rochman

Now a prominent U.S. senator from Mississippi has joined the fight. He is suing his insurance company over the loss of his beachfront home.

Like thousands of other residents on the Gulf Coast, Sen. Trent Lott, R-Miss., didn't have flood insurance.

"This was an important part of my life savings," Lott said, "and I just don't think that the response was one that I could accept."

He has hired a legendary lawyer -- his brother-in-law Richard "Dickie" Scruggs -- who took on and beat the tobacco companies.

Said Lott, "I'm interested in getting results that will help a lot of people, and I'm one of them."

Congress is close to approving a plan to help those without flood insurance, providing grants up to $150,000.

Hendrix sent his plea for help in a letter to Vice President Dick Cheney: "That was not a flood," he wrote. "Floods don't have names. It was a hurricane. It had a name: Hurricane Katrina.

They are powerful words, but another hurricane season will come and go before this wind versus water debate is settled.

ABC News' David Kerley filed this report for "World News Tonight."