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ABC's "20/20" claims State Farm cheated Katrina victims

Aug 25, 2006 | Crain’s

State Farm Insurance has been accused of cheating policyholders out of claims filed for damages sustained by Hurricane Katrina.

Two sisters who worked as independent adjusters for the Bloomington-based insurance company told ABC News that they witnessed State Farm supervisors altering claims to avoid payouts to policyholders in Mississippi, according to ABC’s Web site.

The network is scheduled to air its report on Friday night’s “20/20” program.

Kerry and Cori Rigsby, both whom have worked for State Farm for eight years, told ABC reporters that State Farm employees in Biloxi, Miss., and Gulfport, Miss., pushed for reports to conclude that Katrina-related damages were caused by water and not wind. Water damage is not covered by State Farm policies.

Insurance companies including State Farm and Allstate have come under fire recently by Mississippi and Louisiana state authorities who have accused the industry of underpaying or denying damage claims from Hurricane Katrina.

Dick Luedke, a spokesman for State Farm, said the company was unable to comment on a report that it has not seen, however, a lawyer for the insurer was interviewed for the piece.

The Rigsbys said they have provided the Federal Bureau of Investigations and Mississippi state authorities with internal company documents supporting their claims.

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