NEW YORK — Claiming nearly half of southern Mississippi residents believe insurance executives are on a par with child molesters, State Farm Mutual Automobile Insurance Co. said Wednesday it's seeking a change of venue for lawsuits stemming from damage caused by Hurricane Katrina.
Mississippi has been a hotbed for lawsuits against insurers following the Aug. 29. 2005 hurricane, which destroyed coastal Mississippi and damaged homes as far as 100 miles inland. All told, Katrina caused more than $38 billion in destruction in four states.
State Farm is the largest homeowners' insurer in Mississippi. Other major carriers include Allstate Corp. , Nationwide Financial Services Inc.'s parent Nationwide Mutual, Zurich Financial Services and St. Paul Travelers Cos. Inc. .
The insurers face about $20 billion in lawsuits from claimants in Southern Mississippi who say the carriers failed to pay their insured losses. Among those filing the suits is attorney Richard Scruggs, best known for his successful battle against the tobacco companies.
State Farm said in its motion that it is seeking to have a case moved to northern Mississippi, where damage from Katrina was minimal and perceptions about insurers are different.
To support its motion, State Farm commissioned a survey which showed that 88 percent of southern Mississippi homes were damaged, and only 12 percent of those in the northern part of the state.
Forty-nine percent of southern Mississippians agreed with politicians' statements that insurance executives ought to be held in the same low esteem as child molesters and that "insurers will lose every case," the survey said.
If State Farm succeeded in getting its cases moved, it's likely that other insurers would do the same, said Robert Hartwig, chief economist of the Insurance Information Institute.
"There's been wall-to-wall coverage of insurance there, often adverse," said Hartwig. "It's quite reasonable to want a change of venue."
Scruggs, who represents many of the Mississippi plaintiffs, could not be reached for comment.
Robert Rusbuldt, chief executive of the Independent Insurance Agents & Brokers of America, said State Farm deserved a fair hearing. But he said insurance company "inefficiencies," including having to speak with up to five different adjusters, had created many of the barriers to settling claims.
"I hope the insurance industry will be better prepared for the next disaster," he said.
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