In an update on a Hurricane Katrina case, State Farm has been ordered to pay $2.5 million in damages to a couple whose home was destroyed in the hurricane. State Farm said an appeal is likely. (Have they ever lost a case and then not appealed? You see the beauty in it from their perspective, right? They have a ton of resources committed to appealing cases and most individuals cannot afford to continue fighting appeals.)
The judge ruled that, as a matter of law, State Farm did not present any evidence of what damage was water related and what damage was wind related. Apparently, in their declarations, the State Farm experts admitted there was wind damage, which is covered.
Two interesting things to note here:
- How will this affect the other cases that State Farm was trying to settle? If I were the attorney for the homeowners, I might hold out for some more money for my client. Conversely, if I were State Farm, I would argue this was an anomaly and not likely to re-occur.
- How will this affect other insurers? My guess is that the other insurers will start paying these claims, at least more of them, so they do not get hit with punitive damage claims.
I will, of course, keep you posted.