Mississippi says State Farm pocketed millions meant for Hurricane Katrina victims

Charlotte Personal Injury Attorney Matthew R. Arnold of Arnold & Smith, PLLC answers the question “The insurance adjuster is saying I am partially negligent what does that mean?”


Bloomington, Illinois-based State Farm Fire & Casualty Co. bills itself as a company full of people who have a passion for carrying out the company’s mission of being a good neighbor.

Hurricane Charlotte Injury Lawyer Mecklenburg Car accident attorney“From community involvement to disaster response,” the company boasts on its website, “State Farm is committed to supporting the neighborhoods it serves and the neighborhoods our associates call home by helping to build safer, stronger and better educated communities.”

Jim Hood, the Attorney General of the State of Mississippi, does not think State Farm has been a good neighbor to Mississippi or its residents. Hood is spearheading the Magnolia State’s lawsuit against State Farm over millions of dollars lost as a result of the company’s “malicious” denial of Hurricane Katrina wind-damage claims.

In the lawsuit, the State of Mississippi contends that it paid State Farm $522 million through a Homeowners Assistance Program set up to help homeowners affected by Hurricane Katrina, which swept across states including Mississippi along the Gulf of Mexico in September 2005.

Although the state gave State Farm what would have amounted to “76,673.59 per policyholder” to help offset losses, State Farm only paid the policyholders an average of $14,494.62, allegedly pocketing the rest of the cash. The company aggressively denied claims, first characterizing the hurricane as a “water event” in order to avoid paying claims it said were caused by wind damage.

The company pressured engineering firms to alter reports on the cause of damage to homes. When engineers found that wind had caused the damage, State Farm stopped ordering the reports. A federal jury found in April 2013 that State Farm engaged in fraud by attributing wind damage to a tidal surge in a whistleblower lawsuit brought by two State Farm insurance adjusters.

The State of Mississippi’s lawsuit accused State Farm of fraud, negligence and breach of contract, according to the Biloxi Sun-Herald. Jan Schaefer, a spokeswoman for the Mississippi attorney general’s office, said State Farm’s actions harmed Mississippians more than any other insurer following Hurricane Katrina.

“State Farm in effect converted a program designed to help Mississippians who were devastated financially by [Hurricane] Katrina into a subsidy for itself,” the Magnolia State alleged in its suit against the company.

Attorney General Hood could not specify how much the State of Mississippi lost as a result of State Farm’s alleged fraud, but said the Homeowners Assistance Program’s public accounts had paid “hundreds of millions” which, in turn, should have been paid by State Farm to homeowners who suffered damage.

If you or someone you know has any questions regarding potential personal injury claims, feel free to contact the experienced personal injury attorneys at Arnold & Smith, PLLC in Charlotte, North Carolina for a free consultation. Call toll free at (955) 370-2828 or click here for additional resources.



About the Author

ARNOLD & SMITH LAW Matthew Arnold is a Managing Member of Arnold & Smith, PLLC, where he focuses on the areas of family law, divorce, child custody, child support, alimony and equitable distribution.

Mr. Arnold was raised in Charlotte, where he graduated from Providence Senior High School. He attended Belmont Abbey College, where he graduated cum laude, before attending law school at the University of North Carolina at Chapel Hill on a full academic scholarship.

A board-certified specialist in the practice of Family Law, Mr. Arnold is admitted to practice in all state courts in North Carolina, in the United States Federal Court for the Western District of North Carolina, in the North Carolina Court of Appeals and Supreme Court, and in the Fourth Circuit United States Court of Appeals in Richmond, Virginia.

In his free time, Mr. Arnold enjoys golfing and spending time with his wife and three children.











Image Credit

“Katrina-noaaGOES12” by NOAA – http://www.nnvl.noaa.gov/hurseas2005/Katrina1515z-050828-4kg12.jpg as linked by http://www.nnvl.noaa.gov/cgi-bin/index.cgi?page=items&ser=109660&large=1. Licensed under Public Domain via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Katrina-noaaGOES12.jpg#/media/File:Katrina-noaaGOES12.jpg



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