Katrina Lawsuit Settled With State Farm

Some 100 litigants who sued State Farm insurance for denying claims are finally being paid, Fox News reports.

State Farm was sued by 640 policyholders in total, after Hurricane Katrina damage claims were denied. Richard Scruggs, lead attorney for the claimants, said that the rest of the checks should be expected by the end of next week. All this was part of a multi-million dollar settlement with the insurer.

State Farm had denied claims on the basis that their policies cover damage from a hurricane's winds, but not from water. This includes "storm surge" which State Farm maintained was the reason for the damage to these claimants' homes.

While these claimants have had their day in court, and will get their money, there is still a class action portion of the settlement deal. The class action had called for State Farm to pay approximately $50 million to thousands of other policyholders who have not sued, but could have their claims opened and possibly paid. A federal judge has not been willing to endorse this part of the settlement.

State Farm is not out of the woods yet. There are still other outstanding litigations in process, and arbitration processes being set up now could mean other settlements in the near future.

State Farm is not the only insurer who will be in court over Katrina. Nationwide and Allstate are also being sued because of claims that are still outstanding.

Monique L. Attinger
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