Allstate Fined $2.8M In Katrina Case

Jury Decides Insurance Company Owes Man Who Lost Home In Hurricane; Allstate Will Appeal

(AP)  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."

[shallowfran]

First, this is THAT guy who screws everyone else. He received over 400,000 for his claim, more than enough to rebuild. Yes, it was wrong for the engineer to sign off on something he had yet to see. So everyone thank Mr. Robert Weiss for raising your future premiums.

[toldyouso21]

Its not a conspiracy. And for the record, Allstate is one of the best insurance companies out there. Posted by naticay at 07:12 PM : Apr 17, 2007
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.

[toldyouso21]

You paid $657 a year for home insurance??? that's over $7000 a year, in 10 years thats well over $70,000 you may as well stick that cash in an investment and take your chances.
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

[thgdriver]

Allstate, the good hands people, too bad they have their hands in your pocket!

[naticay]

Anyone who "dislikes" insurance or really thinks they can form an opinion without knowin the ins and outs- is very misinformed. Not ALL insurance companies are out to get you. Its not a conspiracy.

And for the record, Allstate is one of the best insurance companies out there.

[weneedchange]

I'm a retired Fire Investigator who dealt with and commiserated with folks who not only had to face the loss of cherished irreplaceable things and many delays before getting back into their homes, but also fight for what they were due from insurance coverages. ALLSTATE was foremost of insurors least ready to settle up quickly and fairly. For best results, hire a professional
"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.

[weneedchange]

Given the burocracy of most state and federal agencies, it's unrealistic to suggest we'd be better insured by any governmental unit. FEMA is a prime example, and (until recently) most state agencies haven't been much to brag about. For-profit insurors maximize profits, as demanded by its investors, by minimizing loss pay-outs,

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.

[nlm2383]

There was a family here in Nashville that had homeowners insurance with Allstate. When their house burned down in an accidental fire, Allstate refused to cover them. They lost their house and got absolutely NOTHING out of it. You pay all that money for insurance and lose everything... You better believe they had a big sign in their front yard that read "Allstate refused to cover this."

[lochlan-2009]

Of course they're going to appeal. First, it costs less than $2.8million in on salary lawyers to fight this case, as they attempt to move the case to a more corporate favorable court or judge. Secondly, if one person wins with no appeal, the insurance companies are going to have to pay other claims meaning they will now have to hide their money, claim bankruptcy, change names, buy themselves out under the new name, and they really don't want to do that since they have such a good racket going with this name they've spent all that advertising money on for name recognition. The gov. is just trying to figure out a way to pass this on to the tax payer, I think I was reading ten billion dollars in the latest spending bill, that was going to go to helping the insurance companies not pay the katrina victims(of course, it wasn't worded that way, and there will be massive fraud with the claims on that money).

[fleshmonger1]

In spite of the propaganda to the contrary, any objective study of the insurance industry and how it operates would demonstrate why it is that there should be no public or privately held insurance businesses. It is folly to think that in a profit driven business model, insurance companies would still take the "high road" and put the interest of their policy holders above their own profit interest. If insurance is as necessary to the successful operation of our country as some claim, then it should be removed somehow from the profit driven sector of our economy to better ensure that those in need of insurance have a better chance of receiving fair compensation for their claims...

[omega39-2009]

I really dislike insurance. Im glad allstate lost!!! The good hands people?????
Posted by fedupwithit1

Fedupwithit, Allstate didn't lose, it's policy holders did.

I agree though, for profit insurance sux.

[swwils]

Okay so they have been fined,now take that money and pay it to the victims.Uncle Sam apparently don't need it they will just blow it on some dumb idea overseas.

[ov442]

Its been WELL known for decades, that insurance companies do everything in their power to refuse and delay claims by customers including packing documents with hidden fine print that was not mentioned, was marketed as the opposite, and was misleading.
Conseco just got into hot water after enough claimants perked the ears of the feds where the elderly were being screwed over by Conseco as well as other insurance agencies for cashing in on caretaking policies. They were pushed into buying these 'old age' policies that were designed to pay for assisted living care and and housing, and they just figured that, heck if they "lose the case files" or "deny claims" or use "delay tactics" of all sorts, they claimants that had paid for years would just die off.
Wow, such humanity.
Shareholders of these companies demand instant payoffs. The rich dont want sound investments.. thats all just marketed to the middle class or anyone below that with some money to invest. They rich want instant 20% or higher returns or they put all the pressure on they can. So the CEOs and management of these companies enforce the worst policies to acheive those goals, so they also can get rich. Thats it. Driven by stockmarket players.
I got my license to sell all forms of life, home, and auto insurance a decade ago and got out of it quick when i saw all the people that fed like vultures on the misfortune of others. I couldnt live with myself working for a living like that. The pressure was on from the top.

[billysmith6]

They ripped billions of dollars off homeowners. But fines won't help homeowners either.

Bush holding back support and *** up levies should be held personally responsible. He has billions of dollars now. Take it all!

[musty2u]

Awards like this only press insurers to reduce exposure in the gulf and coastal states. The "good fairy" of insurance moguls just can't come up with money like this and still please the stock holders.

[flolake]

AllSTATE? All Phooey.

[truthword]

Allstate is one of the biggest scams in the world, I had one of their drivers run a red light and total my car one time, they tried to give me peanuts for it, and I ended up going without a vehicle for almost 3 weeks in order to get what I rightly deserved for my car. Here's how I did it, forget about the jerk they set you up with to handle your case, his job is to severely lowball you, tell that jerk you want to talk to his boss, then tell the next jerk you want to talk to their boss, if the next jerk won't give you what you want, tell that jerk you want to talk to his boss and eventually you'll get someone that really doesn't want to deal with you that has the power to cut you a check.

[nothappyatall]

"657.00/year "

You paid $657 a year for home insurance??? that's over $7000 a year, in 10 years thats well over $70,000 you may as well stick that cash in an investment and take your chances.

[book54552134]

Many of these insurance companies are ripping the public off at a phenomenal rate. And 9 out of 10 are involved.
Residents of New Orleans, while they are among the most glaring examples, is only part of this huge institutionalized rip-off. People are being swindled by insurance companies everyday, all over the country.

[jpalliser]

I am glad the jury read through the legalese by Allstate's defence lawyers and awarded the the $1.5 million penalty. This is the only thing an insurance company understands, dollars!

I was an Allstate policy holder for approximately 30 years (in LA and TX), home demolished by falling trees. purchased a replacement home in June, 2006 and followed the agents recommendation and paid for the old homeowners until I purchased the new house. Allstate isssued the policy on the new home in June 2006. Guess what I got in them mail this week? Notice that Allstate was dropping windstorm and hail damage from the 2007 renewal. Reason given was the policy was under three years old, no mention of the faithful customer of 30 years, just go to Citizens and get wind and hail, goodby!

The State needs to get firm with Allstate and others, no cherry-picking (cars, fire and liability). This is wrong and is causing people to eavaluate wheather they want to stay in Lousiana.