Allstate Accuses La. Couple of Misrepresenting Claim after Katrina

Allstate Insurance Co. says a Louisiana couple misrepresented their claim after Hurricane Katrina damaged their home and is asking a federal judge to throw out their lawsuit against the insurer less than a week before trial.

Allstate, in court papers filed April 4, said policyholders Robert and Merryl Weiss of Slidell are seeking at least $34,000 from the insurer for a boathouse the company says wasn’t located on the insured property when Katrina hit Aug. 29, 2005.

A lawyer for the Northbrook, Ill.-based insurer argues the couple voided all coverage under their policy when they allegedly misrepresented their claim. A lawyer for the Weisses declined to be interviewed.

Allstate made the same argument in February during the first federal trial for a Katrina insurance case in Louisiana. That trial ended abruptly when the plaintiffs, Lawrence and Elizabeth Tomlinson, dropped their lawsuit amid the misrepresentation allegations.

Although the Tomlinsons dropped their lawsuit before a jury could decide the case, Allstate says a judge was prepared to instruct jurors that if the Tomlinsons had misrepresented their claim, then “the case was over.”

Alan Kanner, a lawyer who represents other policyholders with lawsuits against insurers after Katrina, said “attacking the victim” appears to be one of Allstate’s primary strategies in these cases.

“The question is, ‘How much ammunition do they have in front of a jury?”’ Kanner asked.

Allstate spokesman Michael Siemienas wouldn’t comment on its move to dismiss the suit, but said, “Allstate believes that this claim was adjusted appropriately and that we paid what was owed under the terms of the policy.”

A trial for the Weisses’ lawsuit is scheduled to start April 9. It would be only the second trial among hundreds of federal lawsuits Louisiana homeowners have filed against insurers in Katrina’s aftermath.

The Weisses’ waterfront home on the north shore of Lake Pontchartrain was reduced to rubble by Katrina. Their Allstate homeowners policy had limits of $343,000 for the dwelling and $240,100 for personal property, but the couple also had a separate flood insurance policy.

Allstate paid the Weisses $350,000 for coverage under their flood policy but only $29,483 for structural damage to their home and $14,787 for additional living expenses under their homeowner policy.

The couple accuses Allstate of bad faith for not paying the full value of their claim. They say the company ignored evidence that Katrina’s winds were responsible for much of the damage. Allstate and other insurers say their policies cover damage from a hurricane’s wind but not its flood waters.

The Weisses say an Allstate adjuster told them in October 2005 that wind may have destroyed the home before storm surge washed away its remains. Months later, however, the couple received a report from Allstate-contracted engineers that blamed storm surge for the home’s destruction.

Allstate attorney Judy Barrasso said in court papers that the company only recently obtained documents proving the Weisses didn’t have a boathouse on the property that is part of their claim. Instead, she said, the couple now says it was located on adjacent property they also owned.

“Simply put,” Barrasso wrote, “Plaintiffs have demanded payment of at least $34,000 – or more – for a structure that never existed, and their expert has opined wind destroyed a structure that never stood.”