State Farm To Settle Hundreds Of Katrina Lawsuits

State Farm, which has taken somewhat of a public relations beating in Katrina litigation but did OK in court, is moving to settle hundreds of Katrina cases.  Obviously, the other side of the coin is the homeowners and their attorneys are moving to settle the cases, too.  Given where the court rulings have come out, each case was going to devolve into intricate factual inquiries about representations and details of wind vs. water damage.  This presented the prospect of continued trench-warfare and an excruciatingly slow resolution of cases, one-by-one, through trial and mediation.  So this resolution makes sense for both sides as a business solution.  Expect other insurers to follow.  Reminds me of what a friend with a major insurance company says: "The ‘right’ answer isn’t always the best answer."  Amen, brother. Words to the wise in the arena of insurance coverage and insurance recovery.

Here’s a good story on this development from Joseph Treaster of The New York Times.   UPDATE:  Here’s another story from Michael Kunzelman of the Associated Press.

Sidenote: While I was working on this post, I got a call from R.J. Lehmann of A.M. Best, who interviewed me for a story on this subject.  I’ll post a link when I have one.  UPDATE: Here’s the link, although it is paid subsciption only for the full story. 

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