State Farm will “reopen and adjust” more than 35,000 Katrina claims state Insurance Commissioner George Dale said Monday, including those still in litigation and mediation and those that were previously settled.
Dale said he took advantage of a break in class action litigation to craft a new deal with State Farm Fire and Casualty Co. Lawyers representing plaintiffs recently withdrew a proposed settlement agreement with State Farm.
State Farm spokesman Phil Supple on Monday said the main reason the company reached an agreement with Dale was that it “wants to avoid costly and lengthy litigation for our customers and ourselves.” He said that while those who already settled claims “won’t make more money than they actually lost,” many will receive more money than previously offered.
“It will be new adjusters looking at it with fresh eyes and the luxury of hindsight,” Supple said. “And there’s another big motivating factor we want to resolve these claims.”
Unlike the proposed court settlement, Supple said, the agreement with Dale would not include “binding arbitration,” and “if you don’t like what you hear, you can resume your litigation this is designed to open up a lot of options.”
The agreement includes all residential and commercial policies in Hancock, Harrison and Jackson counties.
Supple said the company will be contacting policyholders directly by mail and running advertisements and talking with the news media within a couple of weeks. He said no 1-800 number has yet been established, but probably would be soon.
His Company Has Agreed to Set Aside a Minimum of $50 Million for Policyholders.
Supple said his company has agreed to set aside a minimum of $50 million for policyholders, but “there’s no ceiling on that.”
Dale, who is running for re-election this year, said, “This plan presents a consumer-friendly way to resolve these disputes and quickly put substantial amounts of money into the hands of those waiting to rebuild their homes and lives on the Coast.”
Dale, in a press release on Monday, said the State Farm agreement and legislation passed last week by the state Legislature to fund and reform the state-sponsored insurance wind pool are steps “toward a more stable insurance environment.”
Dale in the press release took credit for the wind pool legislation “that was presented by my office.” But lawmakers and others who helped craft and pass the wind pool bill have criticized Dale, saying he was sluggish in providing any help. They accused his office of causing delays by not providing numbers or estimates key to drafting legislation. During one legislative hearing, he suggested lawmakers hold off on passing any wind pool legislation during the regular 2007 session.
Some have suggested Dale is only now – nearly two years after the storm trying to serve as a consumer advocate with insurance companies because he is running for re-election and faces a formidable opponent, state Sen. Mike Chaney, R-Vicksburg. Dale, the longest serving politician in the state after eight terms, has denied his re-election goals enter into any of his policy decisions.
Dale said Monday that he is continuing discussions with State Farm, which has stopped writing new homeowner policies in Mississippi, about reopening its market here and that “further announcements that will aid in stabilizing the Mississippi insurance market could come in following weeks.”
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