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Judge Orders Citizens to Pay $92.8M in Katrina Claims

Posted on 01 Apr 2009

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A Louisiana judge has ordered Louisiana Citizens Property Insurance Corp. to pay $92.8 million to 18,573 policyholders in the state whose claims from damage caused by Hurricane Katrina were not adjusted on time.

The state-sponsored insurer of last resort is expected to appeal the judgment by Jefferson Parish Judge Henry Sullivan, according to the Times-Picayune newspaper.

A company official said that if the judgment stands, it would probably not necessitate a special assessment to pay for it, but would probably require increasing the size of the emergency assessment issued after the hurricane to pay off the bond used to pay claims.

If Citizens dos not have the cash available to meet its needs, the report said, it can levy special assessments on all owners of insured property in Louisiana to raise money.

Plaintiffs in the case, Geraldine R. Oubre et al v. Louisiana Citizens, have also filed an appeal of a settlement in another class action suite against Citizens. The attorneys intervened in that case as they felt it improperly infringed on their case in Jefferson Parish, which was certified as a class action suit first, according to the Times-Picayune.

Both suits involve anyone in the state who had trouble getting Citizens to handle their 2005 storm claims in a timely manner.

The appeal means that $13 million to be distributed to around 13,000 plaintiffs will likely not be distributed until the dispute is resolved.

The report said there are still 44,000 people who filed Katrina-related claims with Citizens who did not opt out of the suit and could have valid complaints over late adjustment of claims.f