The previous post to this blog talked about penalties Texas insurance companies face when they do not properly handle a claim that is presented to them by one of their insureds. Recently an insurance case was tried in Federal Court in Mississippi. The case arose out of a lose suffered by Reginald Bossier for damages resulting from Hurricane Katrina. In the case, the jury declined to award any amount of monies for punitive damages.
The insurance company being sued was State Farm. Notice also, that this case was in Federal Court. Earlier posts on this blog have pointed out that the insurance company would always prefer to be in Federal Court, rather than State Court. In this case, the jury compensated Bossier $52,300 for damages to an outbuilding destroyed by Hurricane Katrina. However, the jury refused to punish State Farm for any amount of punitive damages. State Farm had paid for some home damage resulting from the high winds but was refusing to pay for damages caused by water.
The attorney for Bossier had asked the jury to award Bossier $2 million to punish State Farm. That anything less than $2 million would not get State Farm’s attention. The attorney also pointed out that “State Farm would rather pay its lawyers than its insureds.” She also told the jury that if State Farm were not punished then they would continue to deny claims.
The facts of each case are unique and each case has to be carefully looked at to determine its merits. There is no real way of knowing whether another jury would have punished State Farm. It would be interesting to know if this same jury sitting in a State Court would have done anything different.
The Texas Department of Insurance maintains a web-site that highlights recent cases relevant to Texas insurance companies and Texas insureds.