Nationwide Mutual Insurance Co. has agreed to settle out of court with more than 200 residents of Mississippi’s Gulf Coast who sued the insurer over Hurricane Katrina damage, a lawyer for the policyholders said Monday.

Terms of the mass settlement between the Columbus, Ohio-based company and up to 227 of its policyholders were not disclosed.

All of the homeowners are represented by a team of lawyers led by Richard “Dickie” Scruggs, who helped negotiate a similar deal for clients who had sued State Farm Insurance Cos. In that deal, State Farm had agreed to pay about $80 million to settle with up to 640 policyholders.

Zach Scruggs, Richard Scruggs’ son and law partner, said lawyers are meeting with Nationwide policyholders this week to explain the settlement terms — and some could be paid immediately.

“The parties are pleased to have settled the cases,” Zach Scruggs said Monday. “It’s always better to resolve litigation or disputes rather than drag it out for years.”

Nationwide spokesman Joe Case confirmed that a settlement has been reached.

“The lawsuits will be or have been dismissed,” he said in a written statement.

Hundreds of Mississippi homeowners have sued their insurers for denying claims after the Aug. 29, 2005, hurricane. The companies say their homeowner policies cover damage from a hurricane’s wind but not its rising water, including storm surge.

Scruggs deal with Nationwide would settle all the lawsuits that it filed against the company in Katrina’s aftermath. The legal team still represents several hundred clients with pending suits against other insurers including Allstate Insurance Co., MetLife Inc., United Services Automobile Association and the Mississippi Farm Bureau Insurance Co., according to Zach Scruggs.

Last year, Nationwide was the defendant in the first federal trial for a Katrina insurance case.

In that case, U.S. District Judge L.T. Senter Jr. sided with Nationwide and ruled that the company didn’t owe policyholders Paul and Julie Leonard for damage to their Pascagoula home caused by Katrina’s storm surge. Scruggs represented the Leonards.

Last week, Nationwide announced it will readjust claims for about 500 Mississippi policyholders whose homes were reduced to slabs by Katrina. Mississippi Insurance Commissioner George Dale said the agreement could result in additional payments for these policyholders.