Plaintiffs Crowd La. Courthouse, Suing Insurers Just in Case

August 31, 2006

The line of people suing insurance companies – just in case something derails Louisiana’s one-year extension of the deadline for victims of last year’s hurricanes – spilled out of the clerk of court’s office in New Orleans Aug. 28.

Courier Chris Harper said that he’d never seen anything like it on his frequent trips to the courthouse for law firms.

“Before you could just walk in and give it to them,” Harper said. “Now, the line is backed up to the elevators.”

Louisiana allows only one year to settle insurance claims, the shortest limit of any Gulf Coast state. However, on Aug. 25 the Louisiana Supreme Court upheld a one-year extension, moving the deadline to Sept. 1, 2007. Victims of Hurricane Rita have until Oct. 1, 2007.

Non-flood insured property losses from Katrina were expected to total $20.8 billion. Insurers say they have paid out $14.5 billion so far.

Clerk of Court Dale Atkins said that filings steadily increased throughout last week. On Aug. 21, there were 90 lawsuits filed, 32 of them hurricane litigation, or 36 percent. On Aug. 25, 565 lawsuits were filed, 373 of them hurricane litigation, or 66 percent.

All in all, 1,134 suits were filed last week alone, some 58 percent of them hurricane-related, compared with 1,388 suits for the entire month of August 2005, Atkins said.

By the time the deadline was upheld, many homeowners already had their legal efforts in progress, and decided to file to be on the safe side.

“I just can’t get them to resolve it,” said Algiers resident Jessie Rose, who prepared her lawsuit against St. Paul Travelers Insurance herself with the help of the Loyola Law Clinic. “They’ll pay for a couple of tiles on the roof, but not the whole roof, yet it’s leaking.”

Others said they distrusted that the extension would hold, or said they were filing because the extensions may not cover damages against insurers for acting in bad faith or malpractice claims against insurance agents.

Information from: The Times-Picayune,

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