Nov 08
State Farm Backing Down on Katrina Coverage Claims
Ever since Hurricane Katrina ripped through the Southeast in 2005 and destroyed New Orleans, there has been a major battle between homeowners’ insurance companies and many of their policy holders whose homes were destroyed. State Farm is claiming that much of the damage was from water (flooding) instead of wind. Homeowners’ insurance covers wind damage, while flood insurance is a separate policy obtained through the federal government.
After losing one high profile law suit on this issue State Farm chose to settle another case out of court. The company chose to settle with a Mississippi plaintiff eight days after jurors awarded $2.5 million in punitive damages to another policyholder, a couple who sued the insurer for denying their claim after the Aug. 29, 2005, storm.
The plaintiff was one of hundreds of homeowners on Mississippi’s Gulf Coast who sued insurers for refusing to cover billions of dollars in damage from Katrina’s storm surge.
Katrina destroyed his house, leaving nothing but a slab. A federal flood insurance policy paid him the maximum $200,000 for the home and $80,000 for its contents. State Farm, however, refused to pay for an additional $263,190 in damage to his home and its contents.
State Farm and other insurers say their homeowner policies cover damage from wind but not from water, and that the policies exclude damage that could have been caused by a combination of both, even if hurricane-force winds preceded a storm’s rising water.
State Farm is the defendant in the next four Katrina insurance cases set for trial in Gulfport. The first is scheduled to start March 12.
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November 11th, 2007 at 5:01 pm
Perhaps State Farm Insurance is starting to see that the game of \”deny-delay-deny-delay\” isn\’t going to:
A) lead to good public perception of them as a company, nor
B) save them any money in the long run, with punitive damages thrown into the mix!
Jerry
http://www.leads4insurance.com