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A neighborhood near Waveland, Miss. is left in rubble after Hurricane Katrina swept through in late August 2005 . - 


SCOTT JAGOW: The insurance company, State Farm, has agreed to settle hundreds of lawsuits over damage from Hurricane Katrina. These were filed by people in Mississippi. Hillary Wicai reports.

HILLARY WICAI: Was the devastation caused by Katrina wind damage or flooding?

That ensuing debate left many policyholders with unpaid home insurance claims because only wind was covered.

Mississippi's deal with State Farm is the first of its kind in the storm of lawsuits generated by Katrina's unpaid claims. The deal calls for State Farm to pay about $80 million to more than 600 policyholders who sued.

But Mike Barry with the Insurance information institute says State Farm will also review about 35,000 other homeowners' claims.

MIKE BARRY: What State Farm is saying is that also in these three particular counties, families who believe that their damage claims were not adequately resolved, State Farm has said they're willing to revisit them.

The deal also settles the criminal probe by the Mississippi attorney general into allegations that State Farm fraudulently denied claims after Hurricane Katrina.

I'm Hillary Wicai for Marketplace.