Citizens Property Insurance Offers $80 Million Insurance Settlement to Customers
Louisiana homeowners insurance company Citizens Property Insurance, which is responsible for property claims for many homeowners, has recently offered to settle a dispute over the slow handling of claims from hurricanes Katrina and Rita. The insurer provided policyholders who filed the class-action lawsuit with an insurance settlement of $80 millionÂ in return for their complaints.
Citizens Property Insurance Accused of Slow Processing
Citizens Property Insurance policyholders who are unable to acquire coverage through private providers filed a lawsuit against the insurance company due to the company’s slow processing of claims following hurricanes Katrina and Rita in 2005.
The policyholders filed a class-action lawsuit complaining Citizens Property Insurance did not begin adjusting their claims for the hurricanes within 30 days as required by state law.
The insurer said it was completely overwhelmed in the claims adjustment process, especially after Katrina,Â because much of New Orleans was swamped with floodwaters, making it difficult for the company to know whereÂ it should begin.
Just one month later, Hurricane Rita flooded the southwestern portion of Louisiana, making it difficult for the company review claims in a timely manner.
Insurance Settlement of $80 Million Offered
Citizens has offered to pay $80 million inÂ the insurance settlementÂ to an estimated 25,000 policyholders, with no more than $25 million of that total going toward attorney’s fees.
Plaintiff attorneys originally offered to settle all claims in the case for $123 million. That offer, according to documents that were reviewed by the board, didn’t detail how much would be paid to lawyers but did say it would have covered all 25,000 policyholders who initiated claims against Citizens Property Insurance.
The insurer reportedly already turned over $6 million to pay claimants instead of having to post an appeals bond to continue challenging the case. The $80 million offer would be added to that payment.
After attorneys receive their share of the insurance settlement, policyholders are expected to receive around $2,400. However, amounts still need to be approved by a state judge before any can be issued.