La. courts brace for Katrina lawsuits
NEW ORLEANS -- Courts already inundated by a wave of litigation against insurance companies over damage from Hurricane Katrina are bracing for a last-minute barrage of lawsuit filings as a deadline nears next week.
Thousands of Louisiana home and business owners are expected to sue their insurers, both in federal and state courts, in the days leading up to Katrina's second anniversary on Wednesday.
Many of the cases involve policyholders accusing companies of shortchanging them for wind damage from the hurricane. Insurers say their policies cover damage from wind but not a hurricane's rising water.
The deadline for filing suit was originally last August, but state lawmakers extended it. Many home and business owners weren't taking any chances last year and thousands filed suit in the days leading up to Katrina's first anniversary.
State and court officials expect long lines to form next week on the eve of the storm's anniversary.
"Common sense suggests there might be," said Loretta Whyte, head clerk for US District Court in New Orleans.
The longest lines haven't formed yet. New Orleans attorney Wiley Lastrapes Jr. didn't have to wait long yesterday at Orleans Parish Civil District Court to file suits against insurers on behalf of nine clients.
"I didn't want to be here at a time when it's going to be chaos," Lastrapes said.
In Mississippi, where Katrina damaged or destroyed tens of thousands of homes, property owners have another year to file suit against insurers. More than 1,200 cases have been filed in federal court in Gulfport, Miss., and only 449 of those cases remained open as of Tuesday.
Among those preparing last-minute lawsuits in Louisiana is Attorney General Charles Foti. His office is expected to sue insurance companies for allegedly shortchanging homeowners who applied for housing grants through the state's cash-strapped Road Home program.
The Louisiana Recovery Authority initially estimated insurance policies would cover 76 percent of damage incurred by Road Home applicants. But the authority now estimates insurers have covered 69 percent of damage. The difference translates into an increased cost of $5,700 per grant, according to the authority. The federally funded, state administered Road Home expects a shortfall of $4 billion after all applications are processed.
