The attorney general called the settlement agreement with State Farm a first step towards recovery for many, and he is now “urging Allstate, Nationwide, Mississippi Farm Bureau, USAA, and other insurance companies to do the right thing like State Farm and settle the litigation on the Mississippi Gulf Coast.”

An Allstate spokesman Mike Trevino said the State Farm agreement does not impact Allstate “because our policy and our claim handling practices were different. We are continuing to work with our customers and their lawyers on settlements. We have settled the vast majority of actions and closed 98 percent of claims. The company has paid billions of dollars already in Hurricane Katrina claims.”

Joe Case, a spokesman for Nationwide said company attorneys are reviewing the latest legal developments in the Katrina related litigation.

“I cannot confirm or deny whether there are settlement talks on any existing litigation,” he said adding that Nationwide claim practices and procedures “are different and unique from State Farm's.

He added that “State Farm has set an example for other insurance companies to do their part in rebuilding the lives of our families on our Gulf Coast.”

“The American taxpayers have paid their fair share, and they will be watching to see if the insurance companies pay theirs,” he said. “I have been advised by our Congressional leaders that the United States Congress will also be watching.”

Mr. Hood said that insurance companies “made a mistake in failing to specifically and expressly exclude the most destructive event from a hurricane-storm surge.”

Repeating comments made earlier in announcing the State Farm settlement, Mr. Hood said that the four major scientific events in a hurricane are wind, torrential rain, flooding and storm surge.

“Storm surge causes 80 percent of the damage in a hurricane, and yet the policies do not use the term 'storm surge.' I hope our Congress will pass an Insurance Bill of Rights requiring insurance companies to clearly, and in bold print, warn their policyholders that a policy excludes a peril that could, for example, cause 80 percent of the damage to their property,” he said.

“Taking away 80 percent of the value of a policy in fine print merits a clear warning to the American insurance consumer,” he added. “It is time for the other insurance companies to admit their mistake and join State Farm in covering the risk they failed to expressly exclude.”

He called quick settlements critical to stabilize the coastal insurance market and facilitate rebuilding efforts.

According to Mr. Hood, it would be much better for stockholders and policyholders of these companies to settle, “rather than have a state court decision declaring their anti-concurrent causation clauses and water exclusions void.”

He warned that “a ruling to that effect could spawn more litigation in other states, and cause tremendous instability in insurance stock prices and in the insurance industry along all of the hurricane-prone coastal areas of America.”

“I respectfully request all policyholders and stockholders of Allstate, Nationwide, Mississippi Farm Bureau and USAA to contact their insurers and ask them to be fair to our Mississippi Katrina victims,” he said. “These companies should show the nation that they in fact are 'good hands people,' 'on our side,' 'helping you,' and 'know what it means to serve.' We do not need more litigation; we need reconciliation.”

This article updated 9:24 p.m.