State Farm® Disappointed by Outcome of Katrina Case

Bloomington, Illinois, January 11, 2007 -- State Farm Insurance Companies is expressing surprise and concern over the ruling today by U.S. District Court Judge L.T. Senter in Broussard v. State Farm.

“We did not expect this decision,” said Kim Brunner, Executive Vice President, Secretary, and General Counsel for State Farm. “Testimony of expert witnesses showed that damage to the Broussard home was overwhelmingly caused by water and not wind.”

The judge ruled that State Farm did not present sufficient evidence to prove what damage to the Broussard home in Biloxi, MS was caused by wind and what was caused by water. He further said that the Broussard’s only needed to prove a direct physical loss.

“We believe that the ruling is inconsistent with the insurance contract and Mississippi law,” said Brunner.

State Farm is also disappointed with the jury’s finding the company is liable for punitive damages in the amount of $2.5 million. The company will be evaluating its next steps with regard to this decision which will likely include an appeal.

State Farm has a strong record of helping policyholders in the Gulf Coast recover from Hurricane Katrina. State Farm has closed 98% of the claims it received arising from the storm and has paid out over $1.1 billion in claims in Mississippi.

About State Farm
State Farm® insures more cars than any other insurer in North America and is the leading U.S. home insurer. State Farm's 17,000 agents and 68,000 employees serve over 74 million auto, fire, life and health policies in the United States and Canada, and more than 1.8 million bank accounts. State Farm Mutual Automobile Insurance Company is the parent of the State Farm family of companies. State Farm is ranked No.22 on the Fortune 500 list of largest companies. For more information, please visit statefarm.com® or in Canada statefarm.ca ™.