TortsProf Blog

Editor: Christopher J. Robinette
Widener Commonwealth Law School

Tuesday, September 4, 2007

Katrina Insurance Disputes Two Years Later

The New York Times reports on the Katrina-insurance mess:

Insurance companies may have paid out $11 billion to Louisianians in the two years since Hurricane Katrina, but they have also become a new villain in the tales people tell about the slow recovery here. Every neighborhood is full of horror stories about companies that reneged on their promises, offered only pennies on the dollar in settlements, dribbled out payments, deliberately underestimated the costs of repairs, dropped longtime customers and sharply increased the price of coverage.

And it is not just talk. Though, traditionally, relatively few customers sue their insurance companies, about 6,600 insurance-related lawsuits have landed in Federal District Court here; 3,700 of them are pending. Few have gone to trial. Some homeowners have settled; other cases have been dismissed or sent to state courts, which are also handling thousands of disputes.

Thousands of formal complaints have been filed with the Louisiana Department of Insurance, 4,700 of them in 2006 alone. That is just a tiny fraction of the number of people who feel aggrieved, regulators say: for half a year after the storm, calls to the department reached 20,000 a month.


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