Nationwide spokesman Joe Case noted that Mr. Scruggs had removed the agent as a co-defendant in the case and now, in targeting Mr. Fletcher's role in the sale of the policy, is "back-pedaling."

"Mr. Leonard had flood insurance on a prior policy before he became a Nationwide customer. He has testified he understood the policy and his admitted understanding refutes the notion that he relied on his agent's advice," Mr. Case said.

When the Leonards filed their suit before trial their complaint alleged that their Nationwide agent, Mr. Fletcher, had maintained they would have coverage against hurricanes and its resulting "storm surge."

Mr. Fletcher told the Leonards they did not need to purchase flood insurance, the complaint stated.

In addition, the fact that the policy contained a 2 percent "hurricane deductible" for "wind, rain and storm surge" damage led the couple to believe they would be protected in the event of Katrina-like storm, the complaint alleges.

But about two weeks following the Aug. 29, 2005 hurricane the couple was notified there would be payment only of $1,600 for damage caused specifically by wind and none for the bulk of the destruction purportedly caused by flood.

"Although the subject policy does not define 'flood' or any of these listed perils, none of them, as they are commonly understood and defined in the English language, occurred during Hurricane Katrina or caused damage to the plaintiff's property," the Leonard's complaint argues.

The Leonards also contend that Nationwide denied the claim without sending an adjuster to the property, despite "instructions" from Mississippi Insurance Commissioner George Dale that that was improper procedure.

Mr. Case said there will be an adjuster testifying that he did visit the property before issuing his claim finding.