Louisiana’s property insurer of last resort has paid a $104 million judgment in a case involving more than 18,500 policyholders who sued over slow adjustment of claims after hurricanes Katrina and Rita struck in 2005.
Plaintiffs’ attorney Fred Herman said eligible plaintiffs will receive their share of the money from Louisiana Citizens Property Insurance Corp. in three to six months. A state judge still has to decide how much of the award should pay for attorneys’ fees and costs.
Citizens CEO Richard Robertson said the company still has about $100 million to $110 million in cash reserves to continue paying claims “for the foreseeable future.” But a catastrophic storm this year could force Citizens to impose an assessment on policyholders to replenish its cash reserves, Robertson added.
“Nobody likes to have to spend $104 million,” he said. “It’s pretty painful, but it won’t put us out of business.”
A state judge ruled in 2009 that Citizens did not adjust damage claims for the storms within 30 days, as required by law.
Thousands of policyholders still have similar claims pending against Citizens that aren’t covered by the class-action judgment.