[JURIST] Jury selection begins Monday in the first trial of thousands of lawsuits brought by Louisiana homeowners affected by the Hurricane Katrina disaster [JURIST news archive] against their insurance companies. Homeowners Lawrence and Elizabeth Tomlinson are suing Allstate [corporate website] insurance company in federal court for bad faith, alleging that the insurance carrier did not correctly adjust their claim and also did not start adjusting the claim within the 30-day required time limit. Allstate maintains that they properly paid the couple in the amount of $100,000 for damage to their home, personal belongings, and living expenses, and that the Tomlinsons misrepresented part of their claim.
Meanwhile, 350 lawsuits are pending in Mississippi against insurance companies over the separate issue of whether their insurance policies should cover water damage when the policies, as written, cover wind damage created by a hurricane, but not water damage by "wind-driven surge." Last month, a federal judge temporarily rejected [opinion, PDF; JURIST report] a proposed settlement [JURIST report] by State Farm [corporate website] to pay $80 million to 640 policyholders who sued the company and another $50 million to approximately 35,000 other homeowners in Mississippi who did not sue State Farm after their claims were denied. The judge said the agreement between State Farm and Mississippi Attorney General Jim Hood [official website] did not contain enough information to ensure that it was a fair and reasonable settlement. AP has more.