The Louisiana Citizens Property Insurance Company has agreed to settle two long running class action lawsuits against it. The lawsuits pertain to claims handled in the aftermath of hurricanes Katrina and Rita. The board of the state-run insurance company voted unanimously to settle the lawsuits for $61 million. Contingent to settling the suits the board designated $150,000 for court costs, $750,000 for administrative expenses, and have allowed Richard Robertson the CEO to place caps on each claim at $4,500.
Class action suits against insurance companies have become commonplace in the wake of disasters.
This is the second time within three months that Citizens Property has had to hand out millions of dollars. A July judgment forced the insurance company to pay $104 million to approximately 18,500 policyholders. That lawsuit was also filed over adjustment claims after hurricanes Katrina and Rita. Of the two lawsuits that were just settled, one had 7,800 claimants while the other had 12,000.
The lawsuits come as no surprise after the damage that was wreaked by Hurricane Katrina and Rita. Citizens Property are also expecting upwards of $80 million in claims after the damage done to the Gulf by Isaac. Class action suits against insurance companies have become commonplace in the wake of disasters. Insurance companies try to cover their losses by not paying their policy holders nearly as much as they are rightly owed. As a result, policy holders are forced to file class action suits to get the requisite funds to cover their damages. In addition to Citizens Property, Allstate Floridian Insurance Company, Allstate Floridian Indemnity Company, and State Farm have also had class action suits filed against them recently over compensation for damages incurred by the recent hurricanes.