State Farm must pay $2.5 million in punitive damages to a couple whose house was destroyed by Hurricane Katrina, a Mississippi federal jury ruled last week. The panel's finding came hours after U.S. District Court Judge L.T. Senter Jr. ruled that the homeowners, whose claim had been denied by the insurer, were entitled to $223,292 for their house.
At that time he also rejected arguments from the Bloomfield, Ill.-based insurer's attorneys and ruled the jury could consider punitive damages against State Farm.
Judge Senter–whose rulings on the issue of insurance policy flood exclusion language have previously impacted carriers–made last week's finding in a case brought by Norman and Genevieve Broussard of Biloxi, Miss. The Broussards had sought $5 million in punitive damages.
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