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Roy Cupps (Admin)
Posted on Thursday, October 26, 2000 - 7:09 pm:   

American Family Insurance Statement

MINNEAPOLIS, Oct. 13 /PRNewswire/ -- The following statement was issued by
American Family Insurance:

Hennepin County District Court Judge Patrica Kerr Karasov has ruled that
Minnesota state law and American Family Insurance homeowners policy language
require American Family to pay for cosmetic damage as well as physical damage
for some homes with damaged materials from the 1998 storms. When materials
used to replace physically damaged materials on a house do not reasonably
match the existing materials, the company must also pay to replace the
existing materials so there is a reasonable match. The judge, however,
specifically states that when there is a mismatch between new and old
materials on a house because of "the natural weathering of existing
materials," the company is not obligated to provide complete replacement of
existing materials on the house.

We will apply the criteria outlined in the court's order to re-examine the
relatively few claims that have not yet been resolved. (American Family
handled about 60,000 claims and has paid out about $334 million to help
Minnesota homeowners recover from the 1998 storms.) We will also re-examine
claims that were previously settled if a policyholder informs us he/she
believes there is a mismatch of materials that is due to causes other than
"the natural weathering of existing materials." Policyholders with questions
about a 1998 storm loss claim may call 1-866-774-6568 to talk with a Claim
Call Center representative.

We are pleased the judge rejected the request for appointment of a special
master to review these claims. The judge points out in her order that our
"policies provide an adequate and agreed-upon method of dispute resolution
when only the amount of loss is at issue."

It is important to note that because the court based its order, in part, on
the basis of Minnesota statutes, the ruling will apply to all property
casualty insurers in Minnesota.

Key points:

* American Family will use court's criteria to review cases.

* Replacement of existing materials to correct a mismatch is not required

if the mismatch results from "natural weathering of existing


* American Family has handled 60,000 claims and paid $334 million to

Minnesota residents to recover from 1998 storms.

SOURCE American Family Insurance

CO: American Family Insurance

ST: Minnesota



10/13/2000 09:01 EDT "

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