In January, a Mississippi jury held State Farm liable for $2.5 million dollars in punitive damages for rejecting a Katrina claim that State Farm said was due to wind before the storm rather than the hurricane itself. In the same month, State Farm agreed to settle with hundreds of Mississipi homeowners, but Senter rejected the proposed settlement.

State Farm insurance company reached a settlement Tuesday with hundreds of Mississippi policyholders whose claims were denied after Hurricane Katrina, bringing an end to s trial that began January 9 in the US District for the Southern District of Mississippi. The agreement between State Farm and Mississippi Attorney General Jim Hood will award $80 million to the more than 600 named homeowners who filed the lawsuit. Hood, who compared negotiations to "a death roll with an alligator for the last two months," said the settlement also provides for an additional $50 million for thousands of other homeowners in Mississippi who did not sue State Farm after their claims were denied. That $50 million figure however, is just a minimum and could easily reach hundreds of millions, depending on the number of applicants.

Tuesday's settlement only applies to Mississippi litigants and State Farm as additional lawsuits against the insurance company still are pending in other states affected by the Katrina disaster. The settlement does, however, end Hood's investigation into allegations of fraudulent claim denials by State Farm, including allegations the company pressured its engineers to doctor their reports. In Mississippi, Hood also has also brought action against other insurance companies including Allstate and Nationwide.