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Class Action Suit Filed Against AIG Over Katrina Claims

October 13, 2005
A New Orleans resident has filed a class action suit against American International Group (AIG) and its subsidiary, Audubon, charging the companies have failed to help their policyholders who are in desperate need of assistance after the hurricane.

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Toni Swain Orrill, a New Orleans resident whose house was severely damaged in Hurricane Katrina, said she "called and e-mailed the insurance company over 60 times, and could never get through."

"Many others whose homes were severely damaged in the storm" could not " get through to their insurers, much less get relief from them," said her husband Ray Orrill, an attorney who filed the suit on behalf of his wife and others in similar straits.

Americans for Insurance Reform (AIR), a New York City-based national coalition of public interest organizations, said that AIG and Audobon were the underwriters and service providers of Louisiana Citizens Fair Plan (FAIR), which provides homeowners' policies of last resort to those who cannot get insurance elsewhere, including many poor people in New Orleans and the surrounding area.

The class action suit is on behalf of Louisiana's FAIR plan policyholders - about 400,000 people. The suit alleges that AIG has completely failed to provide any way for its policyholders whose homes have been damaged to initiate a claim or even reach its offices to find out how to do that, or to provide temporary disaster relief provided under their policies.

Ray Orrill said that another insurer, Allstate, provided his wife with a FAIR claim form as a courtesy, after failing to get any response from AIG. She submitted it to AIG almost thirty days ago and has not received a response.

AIR became involved when Toni Swain Orrill called a hotline it had set up to help Katrina victims who were seeking help in dealing with their insurers.

"This is the worst case that we have seen of a complete failure of an insurance company to respond to the immediate and dire situation of its Katrina policyholders," said AIR co-founder Joanne Doroshow.

"Many FAIR policyholders were struggling economically before the storm hit, and some are now reaching the point of severe impoverishment due to AIG's failure to help them. Many have still not received the temporary living expenses they are entitled to under their policies."

Doroshow said that more than a month after Katrina, AIR's hotline is still receiving calls from people who cannot reach AIG insurance adjusters. One woman whose home was devastated reports she's been completely unable to reach any AIG representative to request temporary funds or a visit from an adjuster. Another caller says she's been passed around from number to number and AIG has been largely unresponsive to her.

AIR's Hotline number is (888) 450-5545.

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