State Farm Accused of Cheating Katrina Customers

| Fri Aug. 25, 2006 9:57 PM EDT

Kerri Rigsby and Cori Rigsby, two independent insurance adjusters who worked exclusively for State Farm for eight years, say they have turned over to the FBI and Mississippi investigators thousands of documents proving that the insurance company systematically cheated victims of Hurricane Katrina. In an interview with ABC News, Rigsby and Rigsby describe what they call "widespread fraud" in State Farm offices in Biloxi and Gulfport, Mississippi.

The adjusters say that the insurance company brought in a shredding truck to destroy documents; however, State Farm maintains that shredding documents is standard procedure to protect customers' privacy. However, Rigsby and Rigsby also said that outside engineers were pressured to prepare reports stating that structural damage was caused by water (not covered in State Farm policies), not wind. Furthermore, they reported that when wind was listed as the cause of damage, the reports were hidden and new reports were ordered.

Hundreds of homeowners in the areas damaged by Katrina have complained that they cannot get paid by their insurance companies, and State Farm is often mentioned as an especially difficult company to get money from. One of the most frequent reasons cited for refusing to pay is that house damage was caused by water, not wind. However, it is not unusual to hear homeowners say that they were told this even if their house did not flood.

Get Mother Jones by Email - Free. Like what you're reading? Get the best of MoJo three times a week.