Allstate Fined $2.8M In Katrina Case
Allstate Insurance Co. must pay a Louisiana man who lost his home to Hurricane Katrina more than $2.8 million in damages and penalties, a federal jury decided Monday in a case that hinged largely on whether it was wind or storm surge that wiped out his house.
Allstate spokeswoman Kate Hollcraft said the company will appeal.
"Allstate is shocked with the jury verdict in favor of the plaintiff. Allstate believes it acted in good faith throughout the entire claims process with the Weiss family," she said.
The jury found Allstate — which claimed most of the damage was due to storm surge, an event not covered in its policy — did not pay Robert Weiss enough money to cover wind damage to his home. The verdict included a $1.5 million penalty for the company's failure to pay the claim quickly enough.
"Our intention was to get what we were owed and to send a message that we would not be intimidated," Weiss said after the verdict was read.
Allstate lawyer Judy Barrasso said in closing arguments that Katrina's winds were not strong enough to do the damage. She said Weiss already had received more than $400,000 in insurance payments
including $350,000 in federal flood insurance.
"Have you really seen any proof that the damages were in the million-dollar range?" Barrasso asked the jury.
The lawyer for the Weiss, whose home was in the Slidell area on the north shore of Lake Pontchartrain, told the jury in closing arguments that the house was too high above sea level to have been destroyed by Katrina's storm surge. The eye of Katrina passed just east of Slidell on the morning of Aug. 29, 2005.
The lawsuit against Northbrook, Ill.-based Allstate was the second Katrina damage claim to come to federal trial in New Orleans. Hundreds of similar disputes are pending in Louisiana and Mississippi.
In addition to federal flood insurance, Weiss had an Allstate homeowner policy with limits of $343,000 for the dwelling and $240,100 for personal property.
The company, blaming the majority of damage on Katrina's storm surge, paid $29,483 for structural damage and $14,787 for additional living expenses.
Richard Trahant, lawyer for Weiss, argued the house was 17 feet above sea level and that engineering data suggested only 14 feet of surge hit the area. "It never reached the bottom of the house," he said.
Allstate's Barrasso said sustained winds at the house did not exceed 100 mph.
"There was plenty of evidence to show the winds were not strong enough to topple this house and the storm surge was," she said.
Jim Neva, a surveyor and engineer who inspected the house for Allstate, initially told Robert Weiss, who is listed as the policy holder, and his wife, Merryl, that wind may have destroyed the home before the surge of water washed away its remnants.
He later backed off that conclusion, and deferred to engineering consultant Craig Rogers of Rimkus Consulting Group. Rogers, who wrote the final report on the home for Allstate, convinced Neva that storm surge demolished the house.
Rogers said he didn't personally inspect the property until after he wrote the report. He said he based his conclusions in part on evidence gathered by other Rimkus engineers — a practice he described as common. But Trahant questioned the move.
"Why did Allstate elect to rely on the one engineer who never set foot on the property until long after he stamped his report?" Trahant said in closing arguments.
Jeffrey Mika, 30, foreman of the 8-person jury, said the jury was persuaded by Allstate's decision to rely on the assessment by Rogers, who did not personally visit the site.
"We didn't feel that Allstate acted in good faith to settle this claim," Mika said.
Allstate also had claimed the Weisses misrepresented part of the claim.
The company said the couple asked Allstate to pay for a boathouse that was not covered by their policy. The company argued a policyholder who misrepresents even part of a claim voids all coverage.
"I think the jury saw right through it," Trahant said of the misrepresentation defense after the verdict was read. "I think the jury saw it as a last grasp at a straw that wasn't there."
© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Allstate spokeswoman Kate Hollcraft said the company will appeal.
"Allstate is shocked with the jury verdict in favor of the plaintiff. Allstate believes it acted in good faith throughout the entire claims process with the Weiss family," she said.
The jury found Allstate — which claimed most of the damage was due to storm surge, an event not covered in its policy — did not pay Robert Weiss enough money to cover wind damage to his home. The verdict included a $1.5 million penalty for the company's failure to pay the claim quickly enough.
"Our intention was to get what we were owed and to send a message that we would not be intimidated," Weiss said after the verdict was read.
Allstate lawyer Judy Barrasso said in closing arguments that Katrina's winds were not strong enough to do the damage. She said Weiss already had received more than $400,000 in insurance payments
including $350,000 in federal flood insurance.
"Have you really seen any proof that the damages were in the million-dollar range?" Barrasso asked the jury.
The lawyer for the Weiss, whose home was in the Slidell area on the north shore of Lake Pontchartrain, told the jury in closing arguments that the house was too high above sea level to have been destroyed by Katrina's storm surge. The eye of Katrina passed just east of Slidell on the morning of Aug. 29, 2005.
The lawsuit against Northbrook, Ill.-based Allstate was the second Katrina damage claim to come to federal trial in New Orleans. Hundreds of similar disputes are pending in Louisiana and Mississippi.
In addition to federal flood insurance, Weiss had an Allstate homeowner policy with limits of $343,000 for the dwelling and $240,100 for personal property.
The company, blaming the majority of damage on Katrina's storm surge, paid $29,483 for structural damage and $14,787 for additional living expenses.
Richard Trahant, lawyer for Weiss, argued the house was 17 feet above sea level and that engineering data suggested only 14 feet of surge hit the area. "It never reached the bottom of the house," he said.
Allstate's Barrasso said sustained winds at the house did not exceed 100 mph.
"There was plenty of evidence to show the winds were not strong enough to topple this house and the storm surge was," she said.
Jim Neva, a surveyor and engineer who inspected the house for Allstate, initially told Robert Weiss, who is listed as the policy holder, and his wife, Merryl, that wind may have destroyed the home before the surge of water washed away its remnants.
He later backed off that conclusion, and deferred to engineering consultant Craig Rogers of Rimkus Consulting Group. Rogers, who wrote the final report on the home for Allstate, convinced Neva that storm surge demolished the house.
Rogers said he didn't personally inspect the property until after he wrote the report. He said he based his conclusions in part on evidence gathered by other Rimkus engineers — a practice he described as common. But Trahant questioned the move.
"Why did Allstate elect to rely on the one engineer who never set foot on the property until long after he stamped his report?" Trahant said in closing arguments.
Jeffrey Mika, 30, foreman of the 8-person jury, said the jury was persuaded by Allstate's decision to rely on the assessment by Rogers, who did not personally visit the site.
"We didn't feel that Allstate acted in good faith to settle this claim," Mika said.
Allstate also had claimed the Weisses misrepresented part of the claim.
The company said the couple asked Allstate to pay for a boathouse that was not covered by their policy. The company argued a policyholder who misrepresents even part of a claim voids all coverage.
"I think the jury saw right through it," Trahant said of the misrepresentation defense after the verdict was read. "I think the jury saw it as a last grasp at a straw that wasn't there."
Popular on CBSNews.com
- Serena Williams sorry for "what I supposedly said" on rape 69 Comments
- TWA Flight 800 gets another look 17 years later 112 Comments
- TWA Flight 800 disaster - a look back 19 Photos
- 3 football players charged in Naval Academy rape case
- FBI: No sign of Jimmy Hoffa's body in Detroit suburb 59 Comments
- America's endangered historic places 11 Photos
- Reporter Michael Hastings dies at 33
- FBI finds possible remains at gangster's NYC home
hello Allstate agent. LOL---so ....Allstate has finally brought in a paid hack to these boards eh? There ARE good companies out there--Allstate is NOT one of them. they raise rates for no reason, deny or low ball claims and often make themselves scarce when insurers need claims settled. From my experience and I have had State Farm, Allstate, SAfeCo, Allied, American Family*, AAA, Commercial Union, Hartford, Metlife, to name a few and out of the ones I named the absolutely, bar none WORST, WORST, WORST!!!!! HOMEOWNERS INSURANCE IS ALLSTATE. --look for huge lies as they try to weasel out of paying you what they owe. If you don't have any claims--don't worry--they will still raise your rates about 300% to 400% in 3 years, just because they think they can--then the reasons they give will not make sense. I consider them to be VERY dishonest ....American Family--the BEST renter's insurance I ever had--so good that when I was robbed years ago in Rome--they covered the cost of all the merchandise I lost, less a 250.00 deductible. For all around customer care and tending quickly to needs--SAFECO. They are fast, friendly and never seem to even blink when something goes wrong. I had to use them for a rental where the air cond, went out due to a streetwide power surge they replace wiring and the air co sys and rates did not go up. Amazing.
Posted by newster1 at 01:48 AM : Apr 17, 2007
are you retarded? How is 657/year over 7000.00/year? new math? or are you so eager to troll that you think 657 per year is the same as 657 per month and wanted to have at it? give it up--you look like and post like an idiot
And for the record, Allstate is one of the best insurance companies out there.
"Independent Adjustor". The expense of the fee is often offset by higher settlements offered when the insuror knows it's not dealing with unprepared and unknowning typical consumers.
To maximize recoveries, videotape or photograph
the ENTIRE contents of your household, and
prepare a list of dates and costs of purchases.
Endorsements can be added to policies to pay for
higher costs of replacing old items with new.
Apartment dwellers MUST get their own policy,
since a Landlord's policy coverages excludes contents of rental units, including storage spaces.
They are highly regulated, but in too many states, the state agency charged with oversight of insurors act as industry advocates, instead of protectors of the public -- just like the FAA, with aviation, and the FDA, with food producers and the pharmaceuticals. And their lobbyists succeed too well in getting lawmakers well supplied with campaign funds, so we have little help there.
As usual, nothing happens until the public outcry gets loud enough !!! Witness what happened in Florida, after legislators %u201Cgave away the farm%u201D. They backtracked in a Special Session, to force (minimal) cutbacks in premium rate hikes they%u2019d earlier enabled.
Posted by fedupwithit1
Fedupwithit, Allstate didn't lose, it's policy holders did.
I agree though, for profit insurance sux.