[StBernard] Exclusive: Whistleblowers Say State Farm Cheated Katrina Victims

Westley Annis westley at da-parish.com
Fri Aug 25 22:57:46 EDT 2006


Exclusive: Whistleblowers Say State Farm Cheated Katrina Victims
August 25, 2006 2:25 PM

Brian Ross and Joseph Rhee Report:

State Farm Insurance supervisors systematically demanded that Hurricane
Katrina damage reports be buried or replaced or changed so that the company
would not have to pay policyholders' claims in Mississippi, two State Farm
insiders tell ABC News.

Kerri and Cori Rigsby, independent adjusters who had worked for State Farm
exclusively for eight years, say they have turned over thousands of internal
company documents and their own detailed statement to the FBI and
Mississippi state investigators.

In an exclusive interview with ABC news, to be broadcast on 20/20 -- Watch
20/20 tonight at 10 --and World News, the Rigsby sisters say they saw
"widespread" fraud at the State Farm offices in Biloxi and Gulfport, Miss.

"Katrina was devastating, but so was State Farm," says Cori Rigsby.

At one point, they say State Farm brought in a special shredding truck they
believe was used to destroy key documents. State Farm says shredding is
standard to protect policyholders' privacy.

The sisters say they saw supervisors go to great lengths to pressure outside
engineers to prepare reports concluding that damage was caused by water, not
covered under State Farm policies, rather than by wind.

They say reports that concluded that damage was caused by wind, for which
State Farm would have to pay, were hidden in a special file and new reports
were ordered.

Cori Rigsby says she recalls a senior coordinator ordering that an
engineering company be told to alter the findings in its report so that
State Farm would not have to pay. "Tell them if they don't change their
report, we're not paying their invoice," she remembers the supervisor
saying.

A lawyer for State Farm, Wayne Drinkwater, told ABC News he was unfamiliar
with the Rigsby sisters but denied State Farm cheated policyholders or
pressured outside engineers to reach particular conclusions in their damage
reports.

"We, of course, have not been cheating," Drinkwater said.

The allegations, if proven, would support the suspicions of thousands of
homeowners along the Mississippi Gulf Coast who have been unable to collect
enough insurance money to rebuild their homes.

Many have filed lawsuits against State Farm and other insurance companies
alleging the companies of wrongly denying or low-balling their claims. The
Rigsby sisters' allegations are now a key part of suits filed against State
Farm by well-known Mississippi lawyer Dickie Scruggs, famous for taking on
the tobacco companies.





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