Allstate Loses Big in Katrina Case
Allstate Insurance has lost a case in which it denied coverage to a Louisiana man who lost his home to Hurricane Katrina. The dispute centered around whether the home was destroyed by wind or storm surge. Storm surge damage was not covered by insurance, which resulted in a battle of the experts as to the cause of the home's destruction:
Jim Neva, a surveyor and engineer who inspected the house for Allstate, initially told Robert Weiss, who is listed as the policy holder, and his wife, Merryl, that wind may have destroyed the home before the surge of water washed away its remnants.
He later backed off that conclusion, however, and deferred to engineering consultant Craig Rogers of Rimkus Consulting Group. Rogers, who wrote the final report on the home for Allstate, convinced Neva that storm surge demolished the house.
Rogers said he didn't personally inspect the property until after he wrote the report. He said he based his conclusions in part on evidence gathered by other Rimkus engineers - a practice he described as common. But Trahant questioned the move.
"Why did Allstate elect to rely on the one engineer who never set foot on the property until long after he stamped his report?" Trahant said in closing arguments.
The $2.8 million verdict included a $1.5 million penalty for delay in payment of the claim. The jury's decision, including the hefty penalty, will no doubt be closely analyzed by the insurance industry and plaintiff's bar in light of the numerous similar disputes pending in Lousiana and Mississippi.
