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Allstate Hit with $2.8 Million Verdict

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On April 16, a federal jury in New Orleans awarded a verdict of $2.8 million in an insurance dispute to a man who lost his home in Hurricane Katrina. The jury found that Allstate did not pay enough money to cover wind damage caused to the home by the hurricane. In what has become a standard position of insurers confronted with Katrina claims, Allstate claimed that most of the damage was caused by storm surge, which was not covered under the policy.

The jury concluded that Allstate owed the man an additional $561,600 for payment of the wind damage, and an additional $2.25 million for failing to pay the claim in a timely manner following the storm that occurred almost two years ago.

In the litigation Allstate accused its insured of misrepresenting his claim, alleging that he was requesting Allstate to pay for a boathouse that was not covered under the policy. The jury rejected Allstate’s claim.