INDIANAPOLIS (June 12, 2007) — The National Association of Mutual Insurance Companies (NAMIC) was disappointed to learn of the impending lawsuit against State Farm Insurance by the Mississippi attorney general. In response, NAMIC Vice President of State and Regulatory Affairs Neil Alldredge issued the following statement:
"It is disheartening to hear that Attorney General James Hood’s lawsuit has the potential to disrupt the continuation of a recently agreed upon process between State Farm and the Mississippi Insurance Department that can help thousands of victims of Hurricane Katrina. By taking this action, Mr. Hood is diverting media attention from the truth about homeowners’ insurance in the gulf coast states following the 2005 hurricane season.
Despite Mr. Hood’s and other politicians’ assertions that insurers are not meeting the needs of homeowners affected by the storms, the vast majority of claims have been settled. Figures from the Insurance Information Institute show that more than 98 percent of the 1.2 million homeowners’ claims from Hurricane Katrina in Louisiana and Mississippi had been settled by Feb. 28, 18 months after the storm, at a cost of $15.5 billion. Insurance companies have paid an estimated $40.6 billion on 1.7 million claims for damage to homes, businesses, and vehicles in six states from Katrina. In Mississippi alone, nearly 335,000 homeowners’ claims totaling $5.2 billion have been settled.
The agreement that was reached between State Farm and the state of Mississippi in January is working. As State Farm rightly points out, it entered into the contract voluntarily. The company has mailed more than 30,000 letters to policyholders, has received thousands of responses, and has been processing the claim reevaluation requests. State Farm has already made offers totaling more than $10 million.
The agreement is in its early stages and needs time to be fully developed. Instead of giving the process a chance, however, Mr. Hood has again demonstrated an over-eagerness to point the finger at insurers, with his first litigation announcement coming shortly after Katrina.
By filing this lawsuit, Mr. Hood is thwarting a system that can lead to the resolution of the few remaining litigated claims — estimated to be fewer than 2 percent in Mississippi and Louisiana, according to the Insurance Information Institute. This is yet another example of political grandstanding at the expense of policyholders and the public.”
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Posted: Tuesday, June 12, 2007 12:00:00 AM. Modified: Wednesday, June 13, 2007 9:58:02 AM.
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