Katrina Compensation Case Goes to Court

A federal court in New Orleans is hearing the first of thousands of lawsuits filed by homeowners against their insurance companies after Hurricane Katrina. Most who are suing say they didn't get enough money to cover the damage to their houses. But the insurance companies say they have settled almost all Katrina claims, and their settlements were fair.

Elizabeth and Troy Tomlinson are the couple in Monday's case. Their five-bedroom brick house in an upscale suburb of New Orleans was covered by a deluxe homeowners' policy from Allstate. Their home house didn't flood, but Hurricane Katrina tore up the roof, and rainwater poured in.

The house has been repaired. It appears to have a new roof, new floors and a new staircase banister. The Tomlinsons declined to be interviewed before the case began.

Allstate says the house didn't need as much work as the Tomlinsons had done, and say the company shouldn't have to pay for a head-to-toe makeover.

The Tomlinsons say Allstate took too long, and the repairs covered massive damage from the water — which warped the floors, caused mold to grow on the carpet, caved in ceilings and destroyed the wiring.

This is just one case, but thousands of people are watching, including Cheryl Cuccia, who is also suing Allstate. She's got plenty of problems, including water that's still pooled in her light fixtures, 17 months later.

"It should be clear glass," Cuccia said, "But what you see is some sort of water, moisture, mold, orange rusty sludgy stuff."

She says she can't continue repairs because Allstate gave her less than half the money she needs. She decided to sue when the Louisiana Insurance Commission passed her back to an Allstate representative.

"And he said, 'You've gotten everything you're entitled to. It's not our fault if you haven't been able to fix your house with the allotted money and allotted time.' I eventually realized he was immovable, and they were going to be immovable, and that I needed help."

Insurance companies, for the most part, characterize those who have sued as a disgruntled minority. Allstate, for example, says it has settled more than 98 percent of its Katrina claims.

"That doesn't mean people are happy, that means people took a check," New Orleans attorney Allan Kanner said.

Kanner represents dozens of homeowners suing insurance companies.

Kanner said few people can afford to fight, especially considering it could take up to 10 years for all the suits that have been filed to make it to court. There are about 6,000 so far. Louisiana extended the deadline to sue by another year, and thousands more suits will probably be filed.

Kanner said these cases could backfire because the jurors, most likely hurricane victims themselves, may think the plaintiffs should just get over it and move on.

"You know, a lot of people in New Orleans have developed very thick second skins, and they may think the people litigating are greedy. They may think the people litigating are going to drive up their insurance premiums ..."

The lawyer said both sides are seeking ways to move the cases along quickly, because the faster they are settled, the faster thousands of New Orleanians can begin to put one part of Katrina's damage behind them.