Federal Judge Makes Surprising Move Regarding Hurricane Katrina Insurance Case

11/17/2008 | Unfair Insurance Practices/Bad Faith

On Thursday,a federal judge in Gulfport, Mississippi made a suprising move following closing arguments in one of the first cases to go to trial against an insurer for refusing to pay for Katrina damage. U.S. District Judge L.T. Senter Jr. took a portion of the case away from the jury and entered a judgment against State Farm. Judge Scenter ruled Thursday morning that State Farm is liable for $223,292 in damage Hurricane Katrina caused to State Farm policyholders Norman and Genevieve Boussards' home. Senter left it to the jury to decide whether to award punitive damages. And they did, to the tune of $2.5 million dollars. It is certain that this result, especially Judge Scenter's ruling, will send shock waves through the insurance community about the hundreds of remaining lawsuits. Judge Scenter's ruling and the jury's award of punitve damages should be a lesson to insurance companies everywhere. When policyholders suffer a loss, pay their claim. Do not look for ambiguities in the policy in an attempt to deny claims. Insurance companies should do the right thing. They have collected premiums, often times for years. When it comes to pay, they should do so without forcing their own policyholders to file lawsuits. Insurance companies are constantly telling the public that their are TOO many lawsuits. This case makes it obvious that insurance companies are part of the problem. If they want to put lawyers out of business, all they have to do is pay valid claims. Then their wont' be any reason to file a lawsuit at all. Sounds simple, huh. This is a link to the story.