Citizens has been accused of failing to start the claims-adjusting process with the timeframe set by law following hurricane Katrina and Rita in 2005.

Insurance Commissioner Jim Donelon called the ruling a “potentially devastating event.”

The insurer “feels the Supreme Court did not answer all the questions presented to it [but] rather just issued an opinion confirming the ruling by the trail court judge that his allowance of $5,000 per claimant was permitted,” says Richard Robertson, chief executive officer of Citizens, in an email.

“[The court] did not address several items, including a constitutional issue raised by us and the state attorney general concerning the ability to impose a penalty without any showing of bad faith or conduct on the part of the insurer,” he adds.

Citizens plans to file supporting documents on Jan. 10 and hopes to have “a favorable ruling from the court as soon as they review our request.”

Citizens avoided having to post a bond to pay the original judgment while it appealed the case. Now, unless the state Supreme Court reconsiders, all property-insurance policyholders inLouisianacould be footing the bill because Citizens has the ability to levy assessments.

Donelon says the worst-case scenario is that Citizens' maximum exposure to the decision is $200 million, if other eligible policyholders emerge.

Donelon says he is not opposed to policyholders getting $5,000 if they deserve it, but each should have to go to court to get the amount determined instead of an overall blanket judgment for all. He says private insurers faced similar class-action lawsuits but they were not deemed applicable for class-action status.