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State Farm to pay millions for Katrina

Jan 24, 2007 | UPI

State Farm Insurance has agreed to pay hundreds of millions of dollars to owners of Mississippi Gulf Coast homes destroyed by Hurricane Katrina.

The agreement settles lawsuits filed by 640 homeowners and allows thousands of others to reopen damage claims that State Farm previously closed, The New York Times reported.

The agreement does not apply to New Orleans, where the failure of the levees left much of the city underwater for days.

State Farm the nation's largest home insurer and the biggest in Mississippi will pay an initial $130 million and perhaps several hundred million dollars more by the end of the year, depending on how many policyholders request their claims be reopened, the Times said.

About 35,000 homeowners along Mississippi's 70-mile-long coast are eligible.

The deal, which insurance executives said would likely be copied by other carriers, ends a public relations headache for State Farm.

The company had given just a few thousand dollars and sometimes nothing to residents whose houses were destroyed in the storm.

Since Hurricane Katrina struck, insurance companies have paid $5.3 billion to Mississippi homeowners and $10.3 billion in Louisiana.

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