State Farm will begin sending out information to 35,000 Mississippi policyholders who filed foundation-only claims — also referred to as "slab" claims — that stemmed from Hurricane Katrina. Those who return the form will have the opportunity to get their claims reexamined by the company.
The announcement came on the heels of an agreement State Farm reached in March with the Mississippi Department of Insurance Commissioner George Dale. The agreement called for a reevaluation of claims for wind damage by policyholders with properties in the Mississippi counties of Harrison, Hancock, and Jackson. According to State Farm, the reevaluation process does not include policies with wind exclusion, property covered by a flood policy only, those who filed suit against State Farm and already reached a settlement, and those who already reached a settlement through the Mississippi Insurance Department Mediation Program (except those with foundation-only claims).
Once policyholders receive the forms and mail them back to the State Farm, the company will review and consider all new claim-related information. Any additional compensation will be based strictly on wind or wind-driven rain, said State Farm in a release, and will not include losses from flood or storm surge. The company also said it expects to spend a minimum of $50 million on these revisited claims, which is in addition to the $1.2 billion it already has paid in Mississippi alone as a result of Hurricane Katrina.
"When I learned that the proposed class action settlement had stalled, I felt it presented an opportunity to negotiate with State Farm to bring closure for coastal policyholders," said Commissioner Dale, in a release. "My department opened negotiations with State Farm immediately, working virtually around the clock, to come to this agreement. This plan presents a consumer-friendly way to resolve these disputes and quickly put substantial amounts of money into the hands of those waiting to rebuild their homes and lives on the coast. "
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