A total of 699 Gulf Coast homeowners filed suit in federal district court Tuesday claiming that State Farm used a pro-forma engineering report to deny claims stemming from Hurricane Katrina.
The homeowners' suit, filed in U.S. District Court for the Southern District of Mississippi, alleges the insurer denied many claims without investigating whether home damage was caused by water, and therefore exempt from coverage, or wind, which would be covered.
Last September, Mississippi Attorney General Jim Hood filed a similar suit in state court asserting that water damage caused by storm surge was covered under homeowners' policies since it was caused essentially by wind.
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