State Farm to pay US$2.5 million in punitive damages

State Farm Insurance reacted with “surprise and concern” when a U.S. court ruled against the firm in a suit launched by a family who lost their home in Hurricane Katrina.
U.S. District Court Justice L.T. Senter ruled that in the case of Broussard v. State Farm the company did not present sufficient evidence to prove what damage to the Broussard home in Biloxi, Mississippi was caused by wind and what was caused by water.
Senter further said that the Broussard’s only needed to prove a direct physical loss, according to a State Farm release.
The company was also found liable for punitive damages in the amount of US$2.5 million.
“We did not expect this decision,” Kim Brunner, executive VP, secretary and general counsel for State Farm, said in a statement.
“Testimony of expert witnesses showed that damage to the Broussard home was overwhelmingly caused by water and not wind.”
The company will be evaluating its next steps with regard to this decision which will likely include an appeal, the company statement said.
State Farm has closed 98% of the claims it received arising from the storm and has paid out more than US$1.1 billion in claims in Mississippi.