Allstate Loses $2.8 M Katrina Verdict In Louisiana

Allstate said today it will appeal the $2.8 million award that a federal jury in New Orleans said it should pay to a policyholder whose home was destroyed by Hurricane Katrina.

Reacting to the U.S. District Court verdict yesterday, which included $1.5 million in punitive damages, company spokesman Mike Siemienas said the insurer "is shocked with the jury's verdict in favor of the plaintiff."

The case that was decided was brought by Robert and Merryl Weiss, whose home on the north side of Lake Pontchartrain in Slidell, La., was demolished by the 2005 hurricane.

Jurors decided that Allstate's payment for wind damage was insufficient. The couple had received $350,000 under a federal flood insurance policy, and Allstate paid about $50,000 in structural damage in living expenses under a homeowners policy with a $343,000 limit for damage to the dwelling and $240,000 for personal property.

The insurer argued that its engineering findings did not support a claim for a higher amount, but the family contended their home was situated above the 14 feet of storm surge waters coming off the lake.

"Allstate believes that it acted in good faith throughout the entire claims process with Weiss. and we are disappointed that the jury ruled differently. We will appeal this ruling," said Mr. Siemienas.

He said that Allstate has settled about 90 percent of its Hurricane Katrina claims, and "we are continuing to work to resolve claims every day."

The Weiss case is the latest Hurricane Katrina claims dispute in federal court to end with a heavy punitive damage award against an insurer.

In January, a Mississippi jury brought in a $2.7 million verdict against State Farm--of which $2.5 million was punitive damages.