Testimony begins in Katrina insurance lawsuit in Mississippi
GULFPORT, Miss. – State Farm Fire & Casualty Co. used a new “protocol” after Hurricane Katrina to deny claims to many policyholders, a lawyer for a homeowner suing the company said Tuesday in the trial for one of hundreds of pending insurance lawsuits spawned by the massive storm.William Walker, attorney for State Farm policyholders Norman and Genevieve Broussard of Biloxi, told an eight-member jury in his opening statement that the company refused to pay for any damage to any home that Katrina reduced to a slab in August 2005, including the Broussards’.State Farm and other companies say their homeowner policies cover damage from wind but not from water – and exclude damage that could have been caused by a combination of both, even if hurricane-force winds preceded a storm’s rising water.”They denied (the couple’s claim) based on this wind/water protocol, this thing that’s not in the policy,” Walker told jurors. “This is a case in which State Farm promised to do something. This is a case in which State Farm decided not to follow those promises.”The Broussards claim a tornado destroyed their home before any flooding, but State Farm concluded that all the damage was caused by Katrina’s storm surge and isn’t covered by their policy.In his opening statement, State Farm attorney Scott Corlew told jurors: “We think after you’ve reviewed all the evidence that you will agree with us that water was the destructive mechanism at the Broussard home.”The first day of testimony in the federal trial came as Mississippi’s attorney general negotiates a separate potential settlement with State Farm that could impact hundreds of other policyholders with Katrina damage.People with direct knowledge of the settlement talks told The Associated Press on Monday that State Farm, Mississippi’s largest home insurer, is considering paying hundreds of millions of dollars to settle more than 600 lawsuits and resolve hundreds of other disputed claims.A mass settlement would be the first of its kind to follow the wave of litigation spawned by Katrina.State Farm, Hood and plaintiffs’ lawyers are nearing an agreement that calls for the insurer to pay at least $50 million – but possibly hundreds of millions more – to roughly 35,000 policyholders who haven’t sued the company for denying their claim, people with knowledge of the talks said.A Mississippi settlement would not involve any claims filed by State Farm policyholders in other states.Hundreds of Mississippi homeowners have sued their insurance companies for refusing to cover billions of dollars in damage from Katrina’s storm surge. The Broussards’ case is only the second to be tried since the storm destroyed or severely damaged tens of thousands of homes.On Tuesday morning, Norman Broussard broke down in tears on the witness stand as he described seeing his home for the first time after the storm. Judge L.T. Senter Jr. called a brief recess to give Broussard time to compose himself.In the afternoon, a civil engineer hired by the Broussards testified that peak wind gusts of 110 mph – or possibly a tornado – likely demolished the couple’s home before any storm surge reached the area.”If a structure was going to fail, the wind was going to fail it,” said the plaintiffs’ expert witness, James Slider.Under cross-examination by a State Farm attorney, Slider noted that roughly 12 feet of storm surge inundated the Broussards’ neighborhood during the storm.”Storm surge didn’t come in as a wave front,” he added. “It gradually rose.”
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