The 2 year anniversary of Katrina is today while the LA statute of limitations came and went yesterday which was the deadline to file Katrina lawsuits in LA by insureds.
LA had extended their statute of limitations on property claims from 1 year to 2 years following the Katrina storm damage. Yesterday was the last day for insureds in LA to file suit. AL and MS have different terms with AL with a 6 year limit and MS with a 3 year according to the chart below so it may still be years that we continue to see new litigation. The chart also shows a 2 year property damage statute in TX (Rita claims). We do not yet know if there were a mass number of suits filed or not this past week in LA. We will report back on that when information becomes available.
Here is a good blog article by the Merlin group giving a simple explanation as to what that means for insureds on their claims in LA as well as from an attorney’s perspective. They point out, as I did in the Citizens blog on the task force last week, about the 5 year statute of limitations in FL which a task force board member indicated he wanted to reduce because of the long tail on claim file reopens. Click here for that blog. The interesting thing is that just because an insured can no longer file suit on a case, does not mean that a carrier will refuse to take a look at a claim request to reopen a file for supplemental damage, it simply means the insured no longer can file suit on the case.
Don’t mistake this for their handling of a newly reported loss at this late date. Claims with late reporting barring unusual circumstances are always handled under a Reservation of Rights while the cause of the reporting delay is investigated with a denial in order for late reporting if the investigation determines the carrier’s right to inspect a loss and investigate the claim have been prejudiced by the late reporting. Here is a good article written about liability claims but explains reservation of rights letters and provides very good instruction for completing one. The Citizens 2007 Claims Procedure manual also has some ROR sample forms as does a link in my blog on Scruggs about the 242 carrier exhibits which contains many actual ROR letters sent out on coverage issues if you need to see samples of finalized ROR letters.
You might also be interested in looking at the actual FL statute of limitations which does not just pertain to insurance claims but to other actions such as 1 year for a lien to be placed on real property for services or material performed(such as a contractor may do if an insured fails to pay the bill).
Here is a good article explaining both the Statute of Limitations and the Statute of Repose if you do not know the difference. This next article here gives general guidelines on the number of years different statutes run while this last article gives you a chart for all 50 states. An adjuster needs to make sure these are up to date stats before applying them to a particular loss. Make sure to note that there are different statutes for different kinds of losses such as an injury versus a property damage loss. Other factors such as federal or state laws will govern the proper limitation period as the articles linked to above explain. This explanation from FL on “tolling” a statute and things to consider when dealing with minor children is also good information to know as to when the statute “clock” stops running on various issues.
Here is also information on the federal statute of limitations under the Federal Tort Claims Act that pertained to the Katrina Canal Breaches Consolidated litigation.
The Merlin blog points out some issues in MS causing delays there and here is an article coming from Alabama about FEMA grants and the Increased Cost of Compliance allowances to elevate a building in a flood zone there. It is hard to imagine that two years later they are just working on raising homes in the damaged zones. Anyone driving through MS in places like Biloxi can see the reconstruction problems abound as demolition has not even begun in many cases on the coast. The Fema trailer camps break your heart when you realize those folks have been living basically on a concrete pad with wall to wall campers not much more than the size of a small one or two man tow camper.
As these anniversaries approach bringing with them state statute of limitations, do not just assume you are to deny a claim or not respond and timely answer a suit through your carrier’s counsel. These are major issues you need to immediately bring to the attention of your claim manager for direction and guidance on claim handling for any loss approaching or surpassing the state statute of limitations.
I’ll let you know as soon as we start seeing the numbers of new suits alleged to be filed with this week’s deadline in LA. Lest we forget while thinking of this two year anniversary, there were 2,000 deaths, 800,000 homeless, and extensive damage as this anniversary article summarizes. It puts insurance policies and statutes of limitations in perspective. In the insurance world they are very important but to the Katrina victims the coverage issues and statutes just bring a new storm of pain and trauma as they learn of these problems after the storm. I’ll end today’s blog with this insurance article summarizing the stats from both Katrina and Rita with numbers. The number of files that may be effected by the statute of limitations is a very very small percentage of the claims settled as you can see. One can certainly appreciate the comments of this news organization regarding trial lawyers “self serving fiction” spouted in unfounded comments about insurance contracts/claims when viewing the REAL numbers of claims which are unsettled.
Update 8/30- This article is being added as it gives an update on new suits filed which seems a minor number in this article. Also note this report indicates there are a few deadline changes allowing for an extra few days to file.
Update 4:30pm 8/30/07- Here is a new article indicating brisk activity at the courthouse
Update 10:20 Pm 8/31- According to this new article– 2,984 new suits were filed in the last week just in the two jurisdictions mentioned in this article- and these are unrelated to the levee cases which are also mentioned in this new article.