State Farm settles a Miss. Katrina lawsuit before trial

January 22, 2007, Insurance Journal

State Farm Fire & Casualty Co. settled out of court last Friday with a Mississippi policyholder whose lawsuit over Hurricane Katrina damage was scheduled to be tried next week in federal court.

State Farm settled with Richard Tejedor of Long Beach only eight days after jurors awarded $2.5 million in punitive damages to a different policyholder a couple who sued the Bloomington, Ill.-based insurer for denying their claim after the Aug. 29, 2005, storm.

Terms of the settlement in the Tejedor case will not be disclosed, said State Farm spokesman Fraser Engerman. "We are pleased that we were able to resolve this issue before it went to (trial),'' Engerman said.

Jack Denton, one of Tejedor's attorneys, confirmed that the case has been settled but declined further comment.

Tejedor was one of hundreds of homeowners on Mississippi's Gulf Coast who sued their insurers for refusing to cover billions of dollars in damage from Katrina's storm surge.

Katrina destroyed his home, leaving nothing but a slab. A federal flood insurance policy paid him the maximum $200,000 for the home and $80,000 for its contents. Tejedor, however, said State Farm refused to pay for an additional $263,190 in damage to his home and its contents.

State Farm and other insurers say their homeowner policies cover damage from wind but not from water, and that the policies exclude damage that could have been caused by a combination of both, even if hurricane-force winds preceded a storm's rising water...Read More