Here are the details:
- State Farm will make an initial payment of $80 million to settle 640 pending lawsuits.
- Policy limits, or the fully insured value, will be paid to 300 homeowners whose houses were "swept away."
- "The owners of the 340 other homes, with varying degrees of damage, are to receive an average of $124,400."
- "At least" $50 million more will be paid to those among the 35,000 other State Farm customers whose claims were previously closed.
- That sum will increase to an estimated "$200 million to $600 million" depending on how many of the 35,000 customers make new requests to reopen their claims.
- Homeowners whose claims are reopened "may accept a new offer from State Farm or insist on binding arbitration."
- Any insured customer remains free to "ignore the settlement and file separate lawsuits against State Farm."
Randy J. Maniloff, a lawyer at White & Williams in Philadelphia who represents insurance companies, said yesterday that it was clear that the bad publicity had been a big factor in State Farm’s decision to settle. "They spent 80 years building up a brand," he said, "and the adverse publicity from these lawsuits has been clearly doing damage to the brand. It just flies in the face of their portrayal of themselves as good neighbors."Branding and the rotten reputation of State Farm aside, it's clear that the insurance company was motivated by something more -- namely, the fear of facing juries eager to mete out justice.
Two weeks ago, a Mississippi jury considered the first Katrina claim to get to trial and awarded policy limits of $232,292 in actual damages plus $2.5 million in punitive damages for the insurer's bad faith in rejecting a hurricane claim. Earlier this week, State Farm agreed to settle the second Katrina case headed for a jury trial by paying an estimated $1 million.
Ironically, one of the beneficiaries of the "global settlement" will be U.S. Senator Trent Lott (R-Ms.), a frequent critic of plaintiff's lawyers and class actions. Lott is the brother in law of Mississippi plaintiff's lawyer Dickie Scruggs, who was the principle driving force behind the first two jury trials as well as the 'global settlement' reached yesterday.
The Mississippi agreement has no binding legal effect on pending insurance claims elsewhere along the Gulf Coast, including Northwest Florida , Alabama, and Louisiana. Each state's insurance laws -- and courts -- differ. Even so, the Mississippi settlement establishes what could be considered the "market value" of a Katrina claim, bringing added pressure on insurers in other states to emulate it.
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State Farm Insurance Companies are a group of large US insurance and financial services companies started in 1922, sportsbook, by former farmer George J. Mecherle (pronounced Ma-herl). The corporate headquarters is in Bloomington, Illinois.
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State Farm Fire and Casualty Co. settled out of court Friday with a Mississippi policyholder whose lawsuit over Hurricane Katrina damage was scheduled to be tried next week in federal court.State Farm of Bloomington, Ill., settled with Richard Tejedor of Long Beach, Miss., eight days after jurors awarded $2.5 million in punitive damages to another policyholder,costa rica fishinga couple who sued the insurer for denying their claim after the Aug.29, 2005, storm.Terms of the settlement in the Tejedor case would not be disclosed, State Farm spokesman Fraser Engerman said. "We are pleased that we were able to resolve this issue before it went" to trial, Engerman said.
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State Farm Fire Medal State Farm Fire and Casualty Company was formed in 1935 to provide property insurance for State Farm customers in the United States.Costa rica toursState Farm Insurance offers coverage for auto, life, home, health, and more. State Farm also offers mutual funds, banking, loans, and credit cards.
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