Miss.: State Farm Settles Fourth Katrina Lawsuit in a Month

March 22, 2007

State Farm settled out of court with a Biloxi couple whose lawsuit over Hurricane Katrina damage was scheduled to be tried next week in federal court, a lawyer for the homeowners said Tuesday. Terms were not disclosed.

State Farm’s settlement with John and Ann Untershine on Monday marks the fourth time this month that the Bloomington, Ill.-based insurer has settled out of court with policy holders whose homes were destroyed by Katrina.

Jack Denton, an attorney who represented homeowners in all four cases set for trial this month against State Farm Fire and Casualty Co., said settlements are becoming easier to broker as more Katrina insurance cases are tried.

“Our hope all along is that once we tried a few of these cases, it would put both sides in a better position to evaluate these claims,” he said.

State Farm spokesman Phil Supple said of the latest settlement that, “We’re pleased we were able to come to an agreement before trial and avoid potentially lengthy and costly litigation for our customers as well as our company.”

Hundreds of policyholders in Mississippi coastal counties filed lawsuits after State Farm denied at least part of their claims. State Farm and other insurers say their policies cover damage from wind but not from water, including wind-driven storm surge.

State Farm also says its policies exclude damage caused by a combination of wind and water, even if wind damaged a home before surge reached the structure.

Last week, State Farm avoided a potentially hefty punitive damages award by settling out of court with Biloxi homeowner Edward Gemmill. A jury had ordered State Farm to pay $66,234 for damage to Gemmill’s home, but both sides decided to settle the case before the jury could consider punitive damages.

Gemmill and the Untershines had similar claims. The Aug. 29, 2005, hurricane destroyed their homes, leaving only a slab. Both also had flood insurance policies that paid them the maximum coverage.

The next Katrina insurance trial in federal court in Gulfport is scheduled to start on May 14. Several other cases set for trial in April already have been settled.

“I wouldn’t be surprised if we try a few more of these cases,” Denton said. “State Farm may change its position or we may see things differently with the next cases.”

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