Allstate says La. plaintiff drops case against it
Source: Reuters
(Adds background, stock price) NEW YORK, Feb 15 (Reuters) - Allstate Corp. <ALL.N> said on Thursday a Louisiana couple suing the insurer for bad faith in handling their hurricane claims dropped their lawsuit in U.S. District Court. It was the first federal lawsuit filed against an insurance company by a Louisiana homeowner since Hurricane Katrina, which devastated New Orleans and Mississippi in August 2005, causing $38 billion in insured losses. Hundreds of others are still pending. "The plaintiffs have decided to voluntarily withdraw their claims and relinquish any right to refile them," Allstate spokesman Mike Siemienas said in a statement. "They have not received compensation of any kind from Allstate for withdrawing their claim. "We believe that result speaks for itself," he concluded. Allstate, the largest publicly traded home insurer in the United States, had charged in court filings that the couple misrepresented their claim. The outcome in the Louisiana case is in sharp contrast to the first verdict in U.S. District Court in Mississippi, where in January Judge L.T. Senter ruled in favor of a Gulf Coast couple who lost their home. They were awarded by the jury $2.5 million in punitive damages from State Farm Mutual Automobile Insurance Co., an award later reduced by the judge. The Louisiana case ended just before it was due to go to a jury, according to Allstate. Neither the plaintiffs, Lawrence and Elizabeth Tomlinson, who live near New Orleans, nor their attorney, Christie Howley, could be reached for comment immediately. Allstate shares closed at $62.27, up 0.6 percent, or 39 cents, on the New York Stock Exchange after the verdict. The Tomlinsons had claimed that Allstate underpaid them for their damage and had failed to make a timely settlement, according to the insurer. They did not dispute whether the damage was caused by wind or water, which is a key part of many Katrina-related court cases, the insurer said. Insurers say they are not liable for flood damage, which is covered under a federal flood insurance program. Homeowners and politicians in states ravaged by Katrina say that in cases where it is unclear which caused the damage, insurers are liable. They also claim that "storm surge," water whipped up by Katrina's winds into a 30-foot-high wave that crushed homes and businesses, should be covered by home insurers.
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