NEW ORLEANS -- Allstate Insurance Co. must pay a Louisiana man who lost his home to Hurricane Katrina more than $2.8 million in damages and penalties, a federal jury decided yesterday in a case that hinged largely on whether it was wind or a storm surge that wiped out his house.
Allstate spokeswoman Kate Hollcraft said the company will appeal.
"Allstate is shocked with the jury verdict in favor of the plaintiff. Allstate believes it acted in good faith throughout the entire claims process with the Weiss family," Hollcraft said.
The jury found Allstate -- which claimed most of the damage was due to a storm surge, an event not covered in its policy -- did not pay Robert Weiss enough money to cover wind damage to his home. The verdict included a $1.5 million penalty for the company's failure to pay the claim quickly enough.
"Our intention was to get what we were owed and to send a message that we would not be intimidated," Weiss said after the verdict was read.
Allstate lawyer Judy Barrasso said in closing arguments that Katrina's winds were not strong enough to do the damage.
She said Weiss already had received more than $400,000 in insurance payments -- including $350,000 in federal flood insurance. "Have you really seen any proof that the damages were in the million-dollar range?" Barrasso asked the jury.
The lawyer for the Weiss family, whose home was in the Slidell area on the north shore of Lake Pontchartrain, told the jury in closing arguments that the house was too high above sea level to have been destroyed by Katrina's storm surge.
The eye of Katrina passed just east of Slidell on the morning of Aug. 29, 2005.
The lawsuit against Northbrook, Ill.-based Allstate was the second Katrina damage claim to come to federal trial in New Orleans. Hundreds of similar disputes are pending in Louisiana and Mississippi.
In addition to federal flood insurance, Weiss had an Allstate homeowner policy with limits of $343,000 for the dwelling and $240,100 for personal property.
The company, blaming the majority of damage on Katrina's storm surge, paid $29,483 for structural damage and $14,787 for additional living expenses.
Richard Trahant, a lawyer for Weiss, argued the house was 17 feet above sea level and that engineering data suggested only 14 feet of surge hit the area.
"It never reached the bottom of the house," he said.
Allstate's Barrasso said sustained winds at the house did not exceed 100 mile per hour.
"There was plenty of evidence to show the winds were not strong enough to topple this house and the storm surge was," she said.