Nationwide Mutual Insurance Co. has denied coverage to policyholders in cases where Hurricane Katrina reduced a home to a slab and engineers couldn’t find evidence on the site whether wind or water was responsible for the damage, a company executive testified Thursday in a groundbreaking trial.

Nationwide says its homeowner’s policies cover damage from wind but not from flooding, including wind-driven storm surge.

The insurer’s policies also contain a clause that allows for denying coverage in cases in which wind may have caused initial damage but was followed by more destruction from a storm’s surge, said Jeff Gilbert, a Nationwide associate property claims director.

Gilbert said Nationwide looks for all evidence, including eye witness testimony and engineering reports before invoking the so-called “anti-concurrent” clause.

“In all fairness to the policyholder, that’s when we fall back on our contract,” Gilbert testified during the fourth day of a trial for a lawsuit that Pascagoula residents Paul and Julie Leonard filed against Nationwide.

“How in the world is that fair to the policyholder?” John Jones, an attorney for the Leonards, asked during his cross-examination of Gilbert.

“Well, sir,” Gilbert responded, “the contract speaks for itself. And that’s our relationship with the policyholder.”

Gilbert also testified that the Columbus, Ohio-based insurer has resolved 97 percent of the 21,000 claims filed by Mississippi policyholders following Katrina and paid homeowners a total of $230 million.

“Our philosophy is to look for ways to pay claims,” he said. “It’s the right thing to do.”

Zach Scruggs, an attorney for the Leonards, said the insurer has the legal burden to prove that hurricane damage to a home isn’t covered by a homeowner’s policy.

“They cannot deny a claim based on the fact that they can’t figure out what happened,” he said. “That’s not the law.”

The anti-concurrent clause is “illusory and ambiguous, because you basically have no coverage at all,” Scruggs added. “The insured doesn’t have a chance.”

Nationwide spokeswoman Gayle Saunders said anti-concurrent clauses are a standard part of any homeowner’s policy.

“Every insurance company has similar language,” she said.

Saunders said no claim is denied without an inspection and engineering report. And she said the company in cases where a house is reduced to slab uses meteorologic data to show storm surge destroyed the structure.

“Nationwide has never denied a claim where we don’t have data or evidence,” she said.

Also during the hearing, a judge refused to throw out an engineer’s testimony that Hurricane Katrina’s winds caused much of the damage to the Leonards’ home.

Nationwide attorney Dan Attridge argued that structural engineer Peter de la Mora, one of several expert witnesses for the Leonards, didn’t use “reliable principles and methods” in assessing damage to the couple’s home.

U.S. District Judge L.T. Senter Jr., who is hearing the case without a jury, rejected the motion to throw out de la Mora’s testimony, although the judge said, “Granted, it’s a bit confusing as to what expertise he used.”

The couple’s case is the first trial for the hundreds of lawsuits that have been filed by Gulf Coast homeowners challenging insurance companies over the wind-versus-water issue.

Plaintiffs’ attorneys hope a ruling in the Leonards’ favor would pressure insurance companies to pay out hundreds of millions of dollars in settlements to people whose claims have been rejected.

Scruggs, and his father, Richard “Dickie” Scruggs, represent about 3,000 policyholders on the Mississippi Gulf Coast. The firm also has filed lawsuits against other insurers, including Allstate Insurance Co., Metropolitan Life Insurance Co., State Farm Insurance Cos. and United Services Automobile Association.

The trial is expected to continue through the end of this week or early next week.