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State Farm Accused of Cheating Katrina Customers

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.

Posted by Diane E. Dees on 08/25/06 at 6:57 PM | E-mail | Print | Digg | de.licio.us | Reddit | Newsvine | Yahoo! MyWeb | StumbleUpon | Netscape | Google |



Comments

This should surprise no one, insurance companies in America have been doing this for hundreds of years.

This absolutely proves that State Farm is at the top of the insurance company slime heap.

And of course the Bushies are complicit in this.

May God bless these two courageous women for bringing this to the attention of all.

Will State Farm Ins Co be investigated by the federal or state governments, Not likely unless they plan a coverup.They just gotta protect those insurance companies who corrupt our govt. via their handmaidens the Republican party.

No wonder American business thrives, they cheat the people and get subsidies(like no prosecution) from govt. It's called corporate welfare.

This should result in an Enron type of investigation.

Posted by: Bob DAmico on 08/27/06 at 12:30 PM

My comments are observations about State Farm and its contractor staffing practices in general.

I myself worked as a State Farm contractor in their IT department, at their corporate headquarters in Bloomington, Illinois.

The first thing I noticed was a clear 'two class' system in their work environment. Contractors wear blue badges whereas the real employees wear red badges. These blue contractors are everywhere, it appeared to me almost half or more than half of their work force. What is more, a HUGE percentage of these were Indians on H-1 licenses. I like most people out of work was simply looking for a job, had applied for the real jobs but couldn't get hired any other way.

State Farm has done well in my opinion in creating an enormous, disposable labor force with practically no rights or job security. Real employees are even forbidden by company policy from socializing with 'blue badge' employees. I found what I thought was a country club environment where 'red badgers' called in sick, took frequent vacations while the blue badge force handled much of the dirty work- fearing for their jobs. Also I saw 'blue badgers' who weren't liked socially who disappeared, regardless of their work ethic.

As for my personal experience, I literally found my access card turned off one evening, locking the door behind me. This was after I had completed a large project of several months. My contracting company then phoned me and said State Farm 'liked my work but no longer needed me in that department.' I was forbidden to phone or contact any of my co-workers (it was explained this would make the real employees feel bad) and even had to wait days for my belongings to be returned.

It was ironic that my belongings included an assortment of State Farm calendars, pens, and other items I had purchased as someone who had been proud to be part of their team. What a horrible display of the inhumanity of a large company.

So I say, hats off to those contractors, good work in turning in those rats!

Posted by: Joel Smith on 10/23/06 at 5:26 PM

I think State Farm deserves to be investigated to the fullest for being the most corrupt insurance company in the industry. However, as posted earlier, their Republican cronies help keep them in business and not investigated to the fullest extent of the law. State Farm systematically destroys correspondence and information concerning legitimate claims in order to save a buck. They will spend $1 million to fight a $10,000 claim. If employees don't buy into their brainwashing tactics, they find a way to fire those employees or make it so darned hard on the employee that the employee quits. As far as I'm concerned, I will personally, as an ex-employee, bring light to the pubic eye about this mafia type company that has stated they intend to be the only insurance company in the country and the only bank in the country. What has Ed Rust been smoking?

Posted by: Marty on 01/06/07 at 7:39 AM

I have to get some money from State Farm for an Auto Accident, in which one of their clients insered, hit my car behind.

Until now, the process is not is not looking very good, but I will come back with some more info...

Posted by: Dan Bogdan on 03/10/07 at 8:29 PM

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