SuperTalk Mississippi

Hood Sues State Farm on Behalf of the State, Accuses the Company of Fraud After Katrina

JACKSON, Miss.–A lawsuit was filed Tuesday by Attorney Gen. Jim Hood on behalf of the Mississippi against State Farm Insurance. In the suit, Hood said that State Farm improperly classified some damage during Katrina as flood damage instead of wind damage so they would not have to pay.

Hood’s suit, which was filed in Hinds County Circuit Court, seeks to recover money that Mississippi paid out as part of the Homeowner’s Assistance Program. That program helped people fix damage that their insurance companies did not pay for.

State Farm’s standard insurance policies did not cover flood damage, but did cover wind damage. Hood said in his suit that’s why the company tried to say that some of the damage was from water.

Hood said State Farm coerced engineering firms to change their reports to say the damage was from water. He said Mississippi paid out hundreds of millions of dollars and that any money recovered would go to the state.

“The Mississippi Homeowner Assistance Program was set up to pay homeowners for Hurricane Katrina damage that was not covered by insurance,” said Hood. “State Farm took advantage of our program by causing HAP to pay for wind losses that State Farm should have covered under its homeowner policies. Remarkably, State Farm and other insurers walked away from Hurricane Katrina and experienced record profits in the years following, while Mississippi continues to suffer.”

He cited a recent federal lawsuit that also accused State Farm of the same kind of fraud and said there were similar incidents during Hurricane Sandy.

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