The Mississippi Attorney General has settled its dispute with State Farm Insurance Cos. over how the insurer handled Hurricane Katrina damage claims in Mississippi. 

State Farm has complied with a January agreement with Mississippi by reopening some claims and agreeing to pay at least $74 million more to Gulf Coast policyholders whose homes were damaged or destroyed by Katrina’s storm surge.

The insurer also has agreed to notify nearly 150 more State Farm policyholders who haven’t sued or settled their claims that they still can have their cases re-evaluated.

The settlement required State Farm to establish a U.S. District Court-approved administrative procedure to re-evaluate claims of its policyholders and make new offers to its policyholders for no less than 50 percent of the limits for slab or pier-only claims, subject to policy limits and prior payments.

State Farm had refused to comply with U.S. District Judge L.T. Senter Jr.’s requirements to obtain his approval of the class action settlement, which led to the breach-of-contract suit, according to Hood.

Instead, State Farm set up the process with the then Mississippi Insurance Commissioner to re-evaluate the claims.

The original terms of his agreement would have required State Farm to pay out much more in claims – up to $400 million.