State Farm Battered by Storm of Litigation

By William Murphy

Published on January 10, 2007

State Farm Fire and Casualty Co. policyholders Norman and Norman and Genevieve Broussard of Biloxi contend that the insurance company created a new standard after their home and many others were damaged or destroyed in the August 2005 storm.

The couple's attorney, William Walker, told jurors in opening statements on January 9 that State Farm denied the Broussards' claim based on an invented wind/water dichotomy that is not in their insurance policy. State Farm concluded that the Broussards' home was destroyed by flooding from the huge storm surge that followed tornado-force winds. The policy does not cover flood damage. The Broussards claim the tornado destroyed their home before any flooding occurred.

As the same time State Farm becomes tangled in the Broussard suit, the company, Mississippi's largest home insurer, is negotiating with Attorney General Jim Hood to settle tens of thousands of Katrina-related lawsuits in an agreement that could cost State Farm hundreds of millions of dollars. Hood is also pursuing settlements from other insurers.

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