On June 21, Allstate Insurance announced that it settled a post-trial legal dispute with its insured, Robert Weiss, in a significant Hurricane Katrina-related damages case.

Allstate had asserted that a majority of Weiss’ property damage was caused by a non-covered storm surge (wind-driven water) and not by wind, a covered peril.  On this basis, under his homeowners policy, Allstate paid Weiss approximately $45,000 for structural damage and living expenses out of policy limits totaling approximately $583,100.  Additionally, Weiss’ federal flood insurance policy paid for a portion of the damage to his home.

In April 2007, a jury awarded Weiss $561,000 for wind damages, $750,000 in statutory bad-faith compensation, and $1.5 million in punitive damages against Allstate, holding that Allstate wrongly assessed Weiss’ claim. The jury finding was especially significant because the trial had been the first wind vs. water dispute trial in Louisiana.

After the jury verdict, Allstate petitioned the court to order a new trial or reduce the amount of the verdict. However, the case was settled (for an undisclosed amount), prior to a decision.