State Farm Katrina insurance trial begins in Mississippi

State Farm Katrina insurance trial begins in Mississippi

[JURIST] Opening statements were made Tuesday in insurance lawsuits brought against State Farm Fire & Casualty [corporate website] brought by policyholders who were denied claims after Hurricane Katrina [JURIST news archive]. Judge L.T. Senter Jr. of the US District for the Southern District of Mississippi [official website] denied State Farm’s motion for change of venue, stating that State Farm’s claim that juries in the district were unfairly biased by the media did not pass the legal burden needed to justify such a change. State Farm is reportedly considering a settlement [AP report] with the Mississippi Attorney General [official website] that would require the company to pay policyholders $50 million initially, and potentially more as State Farm reviewed claims.

Courts have been split on insurance providers' liability to policyholders affected by Katrina. In the first Katrina-related insurance lawsuit to go to trial, a federal judge in Mississippi ruled in August that Nationwide Insurance was not obligated to cover a policyholder's claims [JURIST report] for water damage caused by the hurricane. In November, a federal judge held [JURIST report; opinion] that flood damage caused by Katrina may be covered under those insurance policies that do not specifically exclude from coverage damage caused by negligence. State Farm policies, however, carry a categorical exclusion. AP has more.