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Tornados Wreak Havoc; Bad Faith in Issue

A Friday night tornado ripped through downtown Atlanta, causing serious damage to buildings in the business district.Inside the CNN Center, water flooded parts of the building, shattered glass littered the floor and dust and debris entered from the torn roof. Next door at the Georgia Dome the SEC conference basketball game was halted.The storm ripped part of the ceiling of the dome off.

On Saturday afternoon, a second tornado claimed the lives of two victims in Bartow and Floyd County in north Georgia. That twister was five times wider and stayed on the ground longer than the Friday tornado.One victim was killed when her home was flattened; flying debris killed the other.

Spring is peak season for tornados.Most tornados occur in what is known as “Tornado Alley” which is the plains of the central and southern states – east of the Rocky Mountains and west of the Appalachian Mountains.The most frequently hit states are Florida, Oklahoma and Texas.Wind speeds vary from 100 to 300 miles per hour and most tornados are two miles long.Tornados come from the energy released in a thunderstorm.

A tornado warning is issued when a tornado is spotted on the ground.According to the American Red Cross, if a warning is issued in your area, then you should:

1. Go to a basement or low level of the ground;

2. If you don’t have a basement, go to an inner hallway or closet;

3. Get away from windows;

4. Go to the center of a room and away from corners;

5. Get under a heavy piece of furniture;

6. Cover your neck and head;

7. If you are in a mobile home, leave and find other shelter.

If you are outside, get out of your car, and duck in the lowest spot you can find like a ditch or gully.Most people are hurt from flying debris rather than the tornado itself.

The Institute for Business and Home Safety recommends that to protect your property from tornado damage, you should make sure your home meets the building code; install strong windows and doors and strengthen the roof through repairs and strong connections to the house.

If you incurred damage as a result of the tornado on Friday and Saturday, you should contact your insurance agent.Most tornado damage is covered by commercial property insurance, homeowners insurance, automobile insurance or business interruption insurance.All of these policies are first party insurance coverage – meaning the claimant is the policyholder.

After a tornado, the first thing you should do if you suffered damage is to take photographs of the damage, contact your agent, make emergency repairs as necessary and document every loss.

While most claims are settled to the satisfaction of the policyholder, you do have rights if you believe the insurance company has failed to carry out its obligations under the policy.

In 2003, 71 policyholders with State Farm Fire and Casualty filed a class action lawsuit against State Farm for bad faith and breach of contract.The class action suit, led by plaintiffs, Donald and Bridget Watkins, claimed that State Farm intentionally denied or underpaid claims arising from tornado damage.The group claimed that State Farm employed outside consultant, Haag Engineering, to inspect brick and structural damage to their homes.They claimed Haag, because of its relationship with State Farm, was biased in assessing home damage.

In May of 2006, an Oklahoma jury awarded the Watkins $13 million for the claim of breach of contract and bad faith against State Farm.Punitive damages against State Farm accounted for $10 million of that judgment.In awarding punitive damages, the jury found that State Farm acted recklessly, intentionally and with malice in denying the claims.State Farm appealed.

Similar claims against State Farm have arisen in Hurricane Katrina related claims.Claimants contend that State Farm uses a “one size fits all” engineering report.The engineering report contends that all the structural damage was caused by “storm surge” rather than wind damage.“Storm surge” would be an uncovered event.

If you believe that you might have a bad faith claim against your first party insurance company, then contact the law firm of Robert N. Katz for a free private consultation.

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