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State Farm’s $100M Deal Marks End of 16-Year Katrina Saga

Law360 Insurance Authority

State Farm's recent agreement to pay the U.S. government $100 million to settle disputed Hurricane Katrina insurance claims marked the end of a 16-year legal saga that took a common dispute in post-storm insurance litigation and turned it into a large contribution to the government's growing whistleblower collections.


Insurance coverage lawsuits in Louisiana over 2020 hurricane damages have also increased considerably in recent weeks as businesses rush to meet two-year suit filing deadlines in the Bayou State. Those policyholders have largely accused their insurers of failing to fully pay out the full amount of insurance benefits in a timely manner.

Robyn Michaelson, an insurance recovery associate with Blank Rome LLP, said that policyholders would be well advised to keep key insurance documentation organized and saved electronically prior to a storm to ensure the best chance of recovery.

The ability to access those records remotely after a storm is important, she said, in addition to understanding notice obligations to insurance companies and taking pictures and videos of a property to establish its condition and contents before and after a storm.

She added that insurance companies must still show that a peril is specifically excluded in "all-risk" policies to properly deny coverage.

"In terms of affirmatively proving the cause of loss, that is going to be the insurer's burden," Michaelson said.

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"State Farm’s $100M Deal Marks End of 16-Year Katrina Saga," by Eli Flesch was published in Law360 Insurance Authority on September 2, 2022.