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State Farm Fire & Casualty Co. has reached a settlement in its Mississippi lawsuits arising from claims filed in the wake of Hurricane Katrina. State Farm refused to pay claims made by owners of homes destroyed by the storm claiming the damage was caused by flooding without proving it.
The settlement awaits approval from Judge L.T. Senter, who ruled against State Farm earlier this month in a damage-liability suit. The settlement does not affect claims in neighboring states.
Settlement Terms
As part of the settlement, State Farm must make an initial payment of $130 million, but that amount may grow many times larger depending on how many claimants decide to reopen their claims.
Approximately $80 million is to be used to settle the more than 600 lawsuits already existing in Mississippi. The remaining $50 million is expected to be used to settle reopened claims.
There are about 35,000 owners of Mississippi homes that were destroyed by Hurricane Katrina, who held State Farm insurance policies. These people are now eligible to reopen their claims.
The Settlement's Legal Implications
State Farm is to make offers to each of its Mississippi policyholders who filed claims over Hurricane Katrina in writing and give them 18 days to reject or accept the offer. If a policyholder rejects an offer, he or she is free to file his or her own personal lawsuit. If the policyholder accepts the offer, State Farm will be immune to any future legal action from that policyholder.
State Farm has agreed to pay up on accepted offers within five days.
This settlement between state farm and Attorney General Jim Hood will likely free State Farm from previous civil suits against it and put an end to criminal investigations conducted by the state.
Victim of Consumer Fraud?
If you have been a victim of consumer fraud, you may not be alone. You may be eligible to collect compensation through a class-action lawsuit. Please contact us today for a complimentary case evaluation by an experienced consumer fraud attorney who can help you plan the best course of action.
Consumer fraud class action lawsuits are specifically designed to help individuals who have been similarly aggrieved to pursue a common goal – namely to hold the deceptive business accountable for any damages suffered. Thus, consumers who have been defrauded by a corporation or other entity may file a consumer fraud class action lawsuit on behalf of themselves and others to seek compensation for their shared grievance.
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