Allstate (ALL)

Litigation

Allstate is defending several matters filed in the aftermath of Hurricanes Katrina and Rita.  Several statewide class action lawsuits are pending against Allstate in Louisiana and Mississippi, as well as a suit by the Mississippi Attorney General, asserting that the flood exclusion found in Allstate’s and other insurance companies’ policies is either ambiguous, unenforceable as unconscionable or contrary to public policy, or inapplicable to the damage suffered in the wake of Hurricane Katrina.  The suits seek primarily declaratory relief and, in some cases, damages in an unspecified amount.  Additionally, in connection with a petition for injunctive relief filed by the Texas Attorney General, Allstate is subject to an order temporarily preventing it from denying claims for loss of use (additional living expense) caused by Hurricane Rita if the insured property is rendered untenantable, regardless of whether direct physical loss or physical damage to the property occurred.  A temporary injunction hearing is set for October 20 and October 24, 2005.  Allstate denies that there is coverage under these circumstances.  These lawsuits are in various stages of development and Allstate intends to vigorously defend them.  The outcome of these disputes is currently uncertain.