Mississippi Attorney General Jim Hood is attempting to leverage recent State Farm claim settlement activity in order to force the hand of other insurers who are facing criticism in the way they handled homeowners' claims stemming from Hurricane Katrina.
State Farm last week agreed to settle more than 600 disputed homeowners' claims in Mississippi after a verdict in Broussard v. State Farm found that there was insufficient evidence presented by the company to prove the loss was due to flooding only. The decision forced the company to pay the Broussards more than $220,000 for policy coverage and $2.5 million in compensatory and punitive damages.
According to a release from his office, Hood stated that although he viewed the class settlement as imperfect, he believed State Farm did the right thing in agreeing to settle litigation, and that it should set an example for other insurance companies to follow. Hood's statement also said that insurance companies made a mistake by not directly using the term "storm surge" in its policies, which he said contributes up to 80 percent of home damage for coastal properties.
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