The State Farm Insurance Company has settled a lawsuit brought against them over the damage their truck and trailer were subjected to after being hit by Hurricane Katrina. In October of 2005, State Farm paid over one million dollars to settle the claim brought forth by lawyers representing residents of New Orleans. As a result of the massive settlement, State Farm was forced to cut hundreds of jobs in the aftermath of the devastating hurricane. The legal case ultimately resolved in favor of State Farm, though it took a long time for the legal issues to come to trial. After a two-day trial, the court finally found in State Farm’s favor and awarded them a financial settlement.
The aftermath of Hurricane Katrina resulted in numerous lawsuits against State Farm because they refused to write policies for flood victims. According to the St Louis Post Dispatch, “Dozens of lawsuits have been filed in the wake of the flooding, many of which involve injuries, deaths or claims of medical negligence.” As a result of the number of lawsuits filed, State Farm has decided to settle most of the cases. Because State Farm couldn’t determine the precise wind damage at the time that the hurricane struck, the insurance provider had to pay out the full amount even after the storm had completely abated. State Farm would prefer to spend those monies on larger amounts of advertisement to allow them to make insurance claims easier for their customers.
Another lawsuit against State Farm is also being handled in St Louis. This time, the suit is being handled by the Insurance Information Institute. The group claims that State Farm created a policy in response to a public records request for information regarding class-action lawsuit estimates. The request pertains to an estimate as to how many claims each of the class-action lawsuit plaintiffs might be eligible to receive. When it was discovered that the request was erroneous, State Farm was sued for violating the Fair Credit Reporting Act (FCRA).
As per the FCRA, all company policies are required to provide reasonable assurance that they will not commit discrimination. In the case that a company violates this requirement by releasing a policy that denies claims based on race, color, or other protected categories, then those companies must reimburse the victims for any damages they have incurred as a result of such discrimination. State Farm did release a policy that covers claims related to injuries caused by storms, but the Insurance Information Institute claims that the policy does not provide enough protection to cover the policyholders from injuries caused by “acts of God” or “acts of nature.” Because of the sensitivity of these types of claims, many Class-Action lawsuit groups advise those who are interested in filing a claim to contact a qualified attorney immediately.
A third case involves State Farm Bankruptcy claims. The Missouri Department of Insurance claims that some of the losses incurred during the bankruptcy proceedings were due to State Farm Bankruptcy violations. Specifically, it was found that certain loans provided by State Farm were structured to circumvent state law and were therefore illegally structured. According to the FCRA, “the insured may bring a complaint for enforcement of a claim against a State Farm insurance company for violations of the laws relating to insurances… if the owner or representative of the borrower has brought a private suit for the violation.”
When an attorney is retained to represent a Class-Action lawsuit plaintiff, he/she will ensure that all aspects of the case are properly presented before a judge. As previously stated, all State Farm Bankruptcy claims are barred from state court unless they involve extreme circumstances. As such, there is a specific time frame in which a state court lawsuit can be filed. Additionally, once a lawsuit has been filed in state court, it is only accessible to the parties involved in the case until the bankruptcy case concludes. If a final judgment has been entered in favor of the debtor, then both the bank and the debtor will be forced to go through the bankruptcy process, which is much more complex than what has so far been discussed.