A total of 699 Gulf Coast homeowners filed suit in federal district court last week claiming that State Farm denied many Hurricane Katrina claims without truly investigating whether home damage was caused by water, and therefore exempt from coverage, or wind, which would be covered.
The homeowners' suit, filed in U.S. District Court for the Southern District of Mississippi, alleges the insurer relied on a “one size fits all” report by one engineering firm because it concluded that Katrina's storm surge arrived before its wind could do any damage, while rejecting any others with a different conclusion.
A State Farm representative, Phil Supple, said the suit was totally without merit. “State Farm has evaluated every Mississippi claim individually, and we are committed to paying our policyholders what is owed to them under their contracts with us,” he said.
He also noted that the company has already paid $1 billion to Mississippi policyholders for Katrina claims.
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