News - Special Packages - Hurricane Katrina

Tuesday, Nov. 03, 2009

Wind versus water damage debated in State Farm case

GULFPORT — Four years after Hurricane Katrina, as a Biloxi policyholder’s case against State Farm Fire & Casualty Co. moved toward trial, the insurance company paid the policyholder for an outbuilding that an eyewitness had sworn the wind destroyed.

State Farm sent Reginald Bossier, who lived on the north side of Biloxi’s Back Bay, a $77,507.80 check for the building. The check included interest from October 2005, when the insurance company first inspected the loss.

Attorneys for Bossier and State Farm offered opening arguments Monday after eight jurors were selected to hear the case in U.S. District Court. The jury must decide whether Bossier is owed more than the total of $93,480 State Farm already has paid on a policy that provided about $650,000 in coverage.

State Farm contends water destroyed Bossier’s one-story home. Bossier argues State Farm wrongly shifted the burden to him to prove wind heavily damaged his home before the water arrived.

Bossier’s attorney, Judy Guice, recently won a state Supreme Court decision that established an insurance company can deny coverage under an all-risk policy only by proving water caused the loss. Private insurers cover wind damage, but exclude water damage from coverage instead provided through a federal flood insurance policy.

Guice told the jury State Farm adjusters were instructed to deny coverage when they were unable to distinguish wind from water damage. “The proof will show State Farm forced the insured to sue and prove his losses,” said Guice, who hopes to seek punitive damages if Bossier wins his case for policy limits in the trial’s first phase.

State Farm attorney Ben Mullen argued the insurance company denied coverage only for excluded water damage, as the policy dictates. He said testimony from the same eyewitness will show water had risen high enough by 8 a.m. to destroy the Bossier home in the Bayside Drive neighborhood.

State Farm initially paid Bossier $2,300 for roof and siding damage, but sent an additional $13,000 check in January 2008, after discovering the payment was based on the wrong building materials.

Guice pointed out the check arrived only after Bossier had hired an attorney. To show State Farm’s investigation was less than thorough, she read into the record testimony from two Pilot Catastrophe Service adjusters who handled State Farm claims.

Both adjusters said they could cover only distinct wind damage. “If I couldn’t differentiate between wind and water, I could not pay,” said adjuster Matthew Thiele. He also said he could not rely on eyewitness testimony. He said, “People would say just about anything, it seems like.”