State Farm to accelerate settlements in Miss.
Source: Reuters
(Corrects first paragraph to 35,000 residents from 3,500) By Ed Leefeldt NEW YORK, March 19 (Reuters) - State Farm Mutual, Mississippi's largest insurer, will accelerate settlements to as many as 35,000 Gulf Coast residents whose homes were destroyed by 2005's Hurricane Katrina. The deal, announced on Monday by State Insurance Commissioner George Dale and the insurer, would make millions of additional dollars available to homeowners in three coastal Mississippi counties and bypass a court settlement that was falling apart. "When I learned that the proposed class-action settlement had stalled, I felt it presented an opportunity to negotiate with State Farm to bring closure for coastal homeowners," Dale said. Dale's move comes after U.S. District Court Judge L.T. Senter in Mississippi delayed a class-action settlement between Mississippi homeowners led by attorney Richard Scruggs and State Farm that would have resolved hundreds of claims. Senter said he was not satisfied that all cases would be covered by the settlement and treated fairly. Dale said that State Farm could potentially reexamine and negotiate more than 35,000 claims, using the proposed class action as a "starting point." Under that settlement, State Farm would have paid Mississippi coastal homeowners at least $50 million and possibly up to $500 million. Mississippi Governor Haley Barbour said he supported the settlement. "This ... should allow hundreds if not thousands of Mississippi homeowners to receive insurance payments from State Farm after these claims are readjusted," Barbour said. Participation by homeowners, renters and commercial properties would be voluntary, Dale said. State Farm said it was beginning an immediate revaluation and payment program for the claims of Mississippians whose homes had been completely destroyed by the August, 2005 hurricane, the most expensive storm in history. 'UNNECESSARY COURT BATTLES' "Unnecessary court battles and political rhetoric serve no one's interest," said Fraser Engerman, a spokesman for the insurer. Dale has said he wanted to see the claims resolved rather than losing insurers from the state. After the class-action settlement was delayed, State Farm refused to write new homeowner policies in Mississippi and Scruggs, who represented the homeowners, withdrew his request for court approval of the settlement. Scruggs could not be reached for comment on the Dale plan. Dale said he was also talking to other insurers about expediting the handling of their claims and could make further announcements in coming weeks. Homeowners argue that their properties were destroyed by wind. Private insurers such as State Farm, Allstate Corp. and Nationwide generally cover such losses. The insurers have said "storm surge," a 30-foot wall of water thrown up by Katrina, swept the homes away. Water damage is normally covered by a federal flood insurance program.
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