Mississippi quietly settled its lawsuit against State Farm Fire and Casualty Co. for allegedly minimizing payments to policyholders in connection with Hurricane Katrina, as a result of which the state provided compensation to homeowners.
The agreement states that the $12 million payment represents “damage that was or may have been caused by a breach of law or potential breach of law” by State Farm, which admitted no liability in its handling of claims from the 2005 Storm, reports The Sun Herald.
State Farm paid off the settlement in February 2021, but Attorney General Lynn Fitch has yet to release details of the settlement. The Sun Herald recently filed a request for a copy of the settlement agreement, which is not included in the lawsuit’s lengthy electronic file.
Former Attorney General Jim Hood originally filed the lawsuit in 2015. State Farm later lost an appeal to the State Supreme Court to have the case dismissed.
In July, the company, a subsidiary of State Farm Insurance, also agreed to pay the federal government $100 million in compensation for alleged mishandling flood insurance claims after Katrina.
The settlement marked the end of a lawsuit that began more than 16 years ago when two whistleblowers sued an Illinois-based insurance company that had the largest share of the Mississippi policy market when the storm hit. State Farm also agreed to dismiss counterclaims filed against the whistleblowers.
In a federal case, State Farm agreed to pay the federal government $100 million to avoid further liability. The jury has already found that State Farm defrauded the National Flood Insurance Program by charging it $250,000 for flood damage to the Biloxi policyholder’s home when the damage was caused by wind.
State Farm policies cover wind damage, while NFIP covers flood damage.
The paper checked out the state’s case after learning of the federal settlement. Prior to the federal settlement, State Farm faced thousands of Katrina lawsuits being investigated for additional fraud.
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