The following is a statement released by State Farm concerning a settlement between the insurer, the state of Mississippi and thousands of State Farm policyholders in Mississippi:
State Farm will participate in a court supervised resolution process to reconsider and fully resolve claims from Hurricane Katrina in three Mississippi coastal counties. The process is part of an agreement reached through the settlement of a class action lawsuit against the insurer by families who believe their damage claims were not adequately resolved.
This agreement can affect some 35,000 Mississippi families, if approved by the U.S. District Court in Mississippi overseeing hurricane litigation.
The agreement is the result of lengthy negotiations between State Farm, the largest property insurer in the state, and the Scruggs Katrina group. U.S. District Judge L.T. Senter, Jr., who is presiding over hurricane litigation, has been asked to give preliminary approval to the settlement plan.
"This agreement can bring prompt and fair relief to residents of the three coastal counties who filed a claim with State Farm," said attorney Richard Scruggs of the Scruggs Katrina Group.
"Thousands of families now have a second chance to have their claims reopened and receive money to rebuild," added Don Barrett, an attorney also involved in the negotiations.
The process applies to State Farm policyholders - including homeowners, renters and owners of business properties - in Hancock, Harrison, and Jackson counties, who experienced property damage as a result of Hurricane Katrina.
These policyholders will have an opportunity to have their cases reconsidered and receive speedy payment for losses under the court-supervised program. If, after filing a settlement form and receiving an offer from State Farm under this resolution process, policyholders are not satisfied and reject the offer, they can request arbitration, which unlike mediation is binding and is not subject to appeal for both State Farm and the policyholder.
Homeowners will have the opportunity to decide if they wish to participate in this class settlement.
The agreement was immediately praised by Senator Trent Lott (R-Miss), himself a State Farm policyholder who suffered homeowner damage as a result of Katrina.
"We've been waiting for a development like this. This is good for Mississippi and is so important to people along the Gulf Coast and in South Mississippi in getting on with their lives and rebuilding their homes," said Lott.
"This is a big step in the right direction," said George Dale, Commissioner of Insurance for the State of Mississippi. "I'm pleased that this agreement will quickly put money into the hands of those along the Gulf Coast without lengthy litigation."
"Our goal has always been to resolve these matters quickly, fairly and efficiently," said Jeffrey W. Jackson, Vice President - Corporate General Counsel, State Farm Insurance. "This settlement offers policyholders who resided in the areas most impacted by the unprecedented storm an opportunity to have their claims reviewed, share any additional information, and, if they choose, have their cases resolved through binding arbitration."
State Farm will initiate the resolution process by notifying all policyholders impacted by this agreement. Policyholders will have 60 days to register for participation in the process, which is designed to have participants paid before the end of this calendar year.