Major Insurance
Companies Not Paying Out. Federal Judge Sides With Insurance Companies, Says Katrina
Cases Must Be Heard Separately
It seems that homeowners with outstanding
lawsuits against their insurer will have to proceed with those cases as individuals.
Unfortunately, it's a bit of a "David and Goliath" story. Your average homeowner
(especially one that just lost everything) is not going to have a "war chest" of
money to take an insurer to court. However, you can bet that the insurer does! And any
insurer that is attempting to deny claims from Katrina has a huge vested interest in
winning each case, in order to ensure that all this claim money isn't paid out.
Another problem: each individual lawyer on each suit will have to basically re-do a lot of
the same footwork in building a credible case. In a class action lawsuit, the footwork can
be leveraged, allowing all claimants to benefit from one large fact-finding project, at
less cost to each individual claimant.
The federal judge who ruled against class actions, U.S. Magistrate Judge Robert Walker, (Appointed by Bush to the U.S. District Court for the Southern
District of Mississippi, November 15, 2005) indicated that consolidation of
a hundreds of policyholder claims against several major insurers did not meet requirements
for class certification. The law firm who attempted to get certification is considering
refiling the action in state court, now that the federal court has denied it.
The insurers are obviously happy. Of course they want each case heard on its own merits,
as opposed to a judgement which throws their policy wording or claims processes into
question, and allows a whole group of people to collect without having to fight each claim
individually. It makes it easier for each claim to be settled either for less than it
should be (because the homeowner runs out of money to pursue the action, and has to
settle). It also allows the insurer's legal team the advantage of doing a lot of the
footwork once and then being able to bring that knowledge into the courtroom on multiple
cases.
If each case is heard individually, I predict the insurers will win a lot more cases, a
lot of other cases will be dropped, and a lot more homeowners will find themselves with a
devastating financial loss that no one will be covering. It may take even longer for parts
of Louisiana to be rebuilt, given that this legal decision stands.
Spokesmen for State
Farm and Allstate said they were pleased with the
decision.
"Judge Walker rightly points out that each case should be heard on its own unique
merits, because storm damage affects each property differently," said State Farm.
Nationwide said it hadn't seen the judge's ruling and
couldn't immediately comment on it, but added, "We adjust claims on an individual
basis, and the adjustments are based on the facts unique to each claim."
The first of the Katrina lawsuits was tried
this summer. A federal district judge ruled that a policy holder cannot collect damages
from Katrina's storm surge because Nationwide's policies do
not cover wind-driven water damage.
Insurance4u Editors Note:
Unfortunately, we had Nationwide when a storm hit NE Ohio in June 2006. Like
the policy holders that Nationwide had in the states that where hit by Katrina
we also were denied payment. We do not live on a flood plain and our agent never
offered us Federal flood insuance...as of Sept 19, 2006 we have a new insurance company
and agent.
JUST NOT ON MY SIDE!
LIKING THE GUY IS JUST
NOT ENOUGH! I NEEDED TO KNOW THE TRUTH ABOUT MY POLICY!!?
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