Miss. Commissioner of Insurance George Dale announced that he has reached an agreement with State Farm Insurance Co. requiring the company to reopen all “slab” cases.
The company will identify and review all such claims, identify the amount paid and/or offered to date, as well as whatever additional action it is willing to take for each “slab” claim, and report in writing to his office within 30 days.
Plaintiffs’ attorney Richard “Dickie” Scruggs blasted the deal as an election year ploy that won’t help many policyholders and criticized Dale, who is running for reelection, as an ineffective regulator.
“Been there done that. The Dale ‘agreement’ merely requires State Farm to do what the law has always required them to do. It is clearly an election year illusion by State Farm to help its favorite commissioner,” Scruggs commented.
According to Dale, the “great majority of State Farm’s customers appear to be satisfied with the way their claim was handled,” however his office continues to hear complaints from consumers where all that’s left of their house is a foundation or slab.
“These consumers insist they sustained wind damage prior to water surge, but State Farm failed to properly apportion the loss and still paid zero,” Dale noted.
The Mississippi Insurance Department (MID) has previously informed insurers that where the insurance company believes damage was caused by water, the company must be able to prove the damage was caused by water and not wind.
State Farm has been the subject of numerous lawsuits, and at least two proposed class action lawsuits and hundreds of complaints to the MID that the company is not adhering to this claims practice.
The MID launched a market conduct exam of State Farm regarding its handling of Katrina claims in the six coastal Mississippi counties. The examination is continuing but will take several more months to complete, according to Dale.
“In the meantime, many consumers’ claims remain unsettled and that is unacceptable,” Dale said. “That is why I believe it is in the best interest of all parties that State Farm reopen these ‘slab’ claims and have them reviewed by a new team in accordance to all MID’s earlier bulletins.Hopefully this will bring about closure.”
But Scruggs isn’t buying, arguing that the terms he has negotiated with State Farm on behalf of his group of claimants are tougher and “have far more bite than Dale’s milk toast ‘deal.'”
Scruggs’ terms, which are under review by federal Judge L.T. Senter, would require State Farm to reopen all unresolved cases and provide for arbitration.
“Dale’s announcement is limited to a relatively few waterfront homes and lacks the guarantee of unavoidable and binding arbitration, if State Farm offers nothing new,” claimed Scruggs.
“Hollow gestures have no meaning here. A real commissioner of insurance would look out for all families on the coast that were not treated fairly by their insurer. The current commissioner is grandstanding about a few cases and not working on the vast majority of Katrina damaged homes. What about the tens of thousands of people that were short changed that didn’t get reduced to slabs? What is Mr. Dale doing for those families?” Scruggs added.
Sources: Mississippi Insurance Department, Ofifce of Richard Scruggs
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