State Farm could appeal a court's decision that required the insurer to pay $250,000 to the NFIP. (Photo By Flickr user NOAA Photo Library)
By Paul Morello
BLOOMINGTON - An insurance professional is siding with State Farm after a federal jury found the company avoided covering a policyholder's wind losses in Katrina by blaming the damage on storm surge.
Insurance Information Institute president Robert Hartwig doesn't think State Farm did anything wrong.
"There is no reason to believe that State Farm in any way acted in anything other than the interest of its policyholders," he said.
A Mississippi court ruled recently State Farm claimed extensive damage to a house had been caused by water, which limited the company's liability in the claim because storm surge is covered by the federal government's National Flood Insurance Program.
That allowed the company to avoid a $250,000 payment on the policy, which was instead covered by the NFIP.
Hartwig said there is no evidence from the NFIP that State Farm acted inappropriately.
"When all is said and done, not only are there not wider ramifications for Katrina-related claims or storms that have occurred since Katrina, I think we'll find that State Farm has acted in the best interest of its policyholder," Hartwig said.
The verdict forced State Farm to repay $250,000 to the NFIP, plus damages.
State Farm could appeal the court's decision.
Paul Morello can be reached at firstname.lastname@example.org.