Claims News Service, Mar. 8, 10:19 a.m. EST -- Commissioner of Insurance George Dale has reached an agreement with State Farm Insurance Company that will require the company to reopen all "slab" cases from Hurricane Katrina. According to a release from the Mississippi Department of Insurance (MID), State Farm will identify and review all such claims, identify the amount paid and/or offered to date, and the additional action State Farm is willing to take for each "slab" claim and report in writing back to his office within 30 days.

A slab claim results when nothing is left of an insured's residence except the foundation upon which it was built. The dispute in Mississippi is that hurricane-force winds, a covered peril, caused damage to homes prior to flood damage from Katrina's storm surge, an uncovered peril in a standard homeowner's policy. State Farm is accused of failing to properly apportion the loss, and in many instances paid homeowners' no money on their claim because they attributed the loss to flood.

The release from Commissioner Dale also reported that in a bulletin released by the MID on Sept. 7, 2005, insurance companies were told that they must be able to prove to the MID that damage was caused by water and not wind. According to the MID, State Farm has been the subject of numerous lawsuits, and at least two proposed class-action lawsuits and hundreds of complaints that the company is not adhering to this bulletin. Because of this, the MID launched a market conduct exam of State Farm regarding their handling of Katrina claims in the six coastal Mississippi counties. The examination is continuing but will take several more months to complete, according to Dale.

"In the meantime, many consumers' claims remain unsettled and that is unacceptable," said Dale, in the release. "That is why I believe it is in the best interest of all parties that State Farm reopen these 'slab' claims and have them reviewed by a new team in accordance to all MID's earlier bulletins. Hopefully this will bring about closure."

Interested in more catastrophe news and in-depth articles? Head over to Claims' catastrophe channel for more information.

Special Reports /

State Farm, Mississippi DOI: Slab Claims Will Be Reopened

Related Stories

Recommended For You