Katrina Trial Accuses Allstate of Bad Faith

Eddie Farah

Attorney
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A trial that is underway in Louisiana underscores the on-going and as yet unsettled debate about just how much and what kind of hurricane damage insurance will untimately cover.

This is only the second Katrina trial to take place in a Louisiana federal court and that question of coverage is still unanswered. Better hurry up- Florida's hurricane season is about to begin June 1st.

Allstate admits hurricanes cause winds and their policies cover wind damage. But it's the rising water that comes from high winds that is the center of the debate and this lawsuit.

Robert and Merryl Weiss blame the winds for totaling their home, north of New Orleans. And Allstate did pay to cover some of the damage.

The couple had a federal flood insurance policy and a separate Allstate homeowner's policy with limits of $343,000 for the dwelling and $240,100 for personal property.
Allstate paid the Weisses $350,000 for coverage under their flood policy but only $29,483 for structural damage to their home and $14,787 for additional living expenses under their homeowner policy.

But Robert and Merryl say some of their neighbors recovered the full value of their policies without the wind/water debate. They accuse the insurance giant of acting in bad faith.

The Weisses say an Allstate adjuster told them in October 2005 that Katrina's winds destroyed their waterfront home on the north side of Lake Pontchartrain before storm surge washed away its remnants. Months later, however, the couple received a report from Allstate-contracted engineers that blamed storm surge for the home's destruction.

Allstate says the couple is misrepresenting their claim.

Back in January, a couple who sued State Farm won a punitive judgment of $2.5 million.