Hurricane Katrina caused an estimated $108 billion (unadjusted) in damage and was responsible for more than 1,800 fatalities. (Credit: KEG-KEG/Shutterstock)
Last week, the Mississippi Supreme Court upheld a 2022 jury ruling ordering USAA to pay $10.5 million to the estate of a couple who lost their home in Hurricane Katrina.
Hurricane Katrina caused an estimated $108 billion (unadjusted) in damage and was responsible for more than 1,800 fatalities across Louisiana, Florida, Mississippi and Alabama in August 2005.
According to the NOAA, Katrina caused storm surge flooding of 25 to 28 feet above the normal tide level in areas along the coast of Mississippi. Along the southeastern Louisiana coast, storm surge flooding was 10 to 20 feet above normal tide levels. This caused extreme devastation in some coastal areas due to the combination of storm surge, wind and waves that left some areas with few structures still standing.
In New Orleans, storm surge from Hurricane Katrina famously breached the levee system in Orleans and St. Bernard Parishes, which led to devastating flooding and one of the largest displacements of a population in modern history.
In the wake of Katrina, policyholders across different carriers challenged claims that were denied because insurers said damage from the hurricane’s storm surge was not covered under their homeowners policies. Standard homeowners insurance policies do not provide coverage for flooding-related losses, which means homeowners must seek out separate flood insurance.
A jury trial in 2013 awarded the Minors around $1.5 million in damages from USAA for the loss of their home. At that time, the Biloxi Sun Herald reports, the family also petitioned for punitive damages to punish the insurer for what the Minors believed was them operating in bad faith. However, the jury denied the claim.
The Mississippi Court of Appeals sent the case to Jackson County Circuit Court to determine whether USAA acted in bad faith. That jury decided that the Minors were owed $10 million in punitive damage from USAA as well as more than $450,000 in attorney’s fees.
The Mississippi Supreme Court’s action last week affirmed this jury award and awarded an additional $4.5 million in attorney’s fees, including interest dating back to October 2022.
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