State Farm States No New Policies in Mississippi

[la...@urbaninsuranceagency.com]

State Farm Insurance Company anounced that it. is suspending sales of
any new commercial or homeowner policies in Mississippi starting
Friday. A company official said that the wave of litigation it has
faced since Hurricane Katrina, was the main reason.

Mississippi's "current legal and political environment is simply
untenable. We're just not in a position to accept any additional risk
in this homeowners' market." said Mike Fernandez, vice president of
public affairs for State Farm

State Farm has argued that their homeowner policies were worded to
cover damage from wind but not from water - even if hurricane-force
winds were the cause of the rising water. They also state that their
policies exclude damage that could have been caused by a combination
of both wind and water.

Hundreds of State Farm policyholders have challenged that claim,
saying they were "Sold" Hurricane policies and storm surge is a part
of a hurricane, and they are therefore entitled to Compensation.

In the case of Norman and Genevieve Broussard VS State Farm a jury
awarded the Broussard's $2.5 million in punitive damages against
State Farm for refusing to cover Hurricane Katrina storm surge damage
to their Biloxi home.

U.S. District Judge L.T. Senter Jr. later reduced the award to $1
million, even though the judge found that State Farm acted in a
"grossly negligent way" by denying the claim filed by policyholders.

Last month Attorney General Jim Hood reached a settlement with State
Farm requiring them to pay about $80 million to more than 600
policyholders who sued the company for refusing to cover damage caused
by Katrina. Judge Senter later refused to sign off on part of the
agreement, a deal between State Farm and Mississippi