State Farm announced today that it will stop writing new policies for homeowners in Mississippi. The action comes in the wake of $1.1 billion in payouts the company has made for Katrina-related lawsuits. The company’s post-Katrina claim that water damage was not covered prompted even Trent Lott, notorious critic of frivolous lawsuits, to sue.
It’s not global warming and the increasing risk of mega-hurricanes that has State Farm worried—insurance companies have been budgeting for environmental destruction for 30 years. Rather, State Farm’s Mike Fernandez told the Washington Post, it’s the “political and regulatory and legal environment” in the state. Lott always did call Mississippi “the center of jackpot justice.” Too bad the state’s residents will have to empty their wallets for pricier policies as a result of State Farm’s action.
