Hurricane insurance payout in Louisiana tops $104 million
Judgment is with regards to class action suit regarding claims from Katrina.
The Louisiana Citizens Property Insurance Corp. has been ordered to pay $104 million to over 18,500 of its hurricane insurance policyholders following a class action suit judgment against the insurer’s slow adjustment of the Katrina and Rita claims in 2005.
The money was transferred to the plaintiffs’ attorney, Fred Herman, on Monday.
According to Herman, the plaintiffs who are eligible to receive a portion of the payout should expect to receive their checks within the upcoming three to six months. The delay is due to the decision which still must be made by a state judge regarding how much of the award will be allocated for the payment of attorneys’ fees and legal costs.
CEO of Citizens, Richard Robertson, has said that its cash reserves for hurricane insurance and other types of coverage remain at around $100 million, and that it will be able to continue to pay for claims “for the foreseeable future”. That said, the company does remain in a certain amount of risk, considering that the storm season is far from over and there are a number of serious events that have been predicted to occur this year.
The ruling for the hurricane insurance suit in 2009 stated that the insurer failed to meet the legal deadline.
According to the law in Louisiana, hurricane insurance companies and other insurers must adjust damage claims from storms and other natural disasters within a thirty day period. Citizens failed to meet its obligations within that span of time.
Herman explained that “after a lengthy and tortuous legal fight which took nearly 7 years to the day that Hurricane Katrina made landfall in South Louisiana and the Citizens Insurance failed to timely adjust its policyholder losses, the funds have been delivered to pay the policyholders.” The attorney went on to add that “We still have several thousands of claims they refuse to negotiate. We will be filing against them within the month.”
Robertson has noted that the company could still survive the payments for hurricane insurance should a storm happen, if another Katrina level event should occur before the cash reserves have been replenished, drastic measures may need to be taken.