“Whistleblowers” barred from testifying as witnesses in State Farm Insurance Hurricane Katrina case


Back in August 2006, I reported on Kerri Rigsby and Cori Rigsby, sisters who worked as independent adjusters for State Farm. The sisters were deemed “whistleblowers,” for their allegations of corruption at State Farm Insurance.

The sisters came forward, claiming that there was fraud in the Biloxi and Gulfport field offices related to the processing of Hurricane Katrina claims. They said that supervisors were pressuring adjusters and consultants to attribute hurricane damage to water, rather than wind, so that claims would not have to be paid. Under the State Farm policies, water damage is not covered, but wind damage is. Continue reading

Judge Promises Quick Decision in Katrina Insurance Case


Carolyn King, one of the 5th U.S. Circuit Court of Appeals judges who will rule on the case involving New Orleans homeowners and insurance companies, has promised a quick ruling. Although such rulings usually take months, Judge King has acknowledged that tens of thousands of people could be affected by the case, so a quick ruling is important.

In November, U.S. District Judge Stanwood Duval ruled for policyholders who said that the insurance policy language excluding water damage from policies was ambiguous. He said that the policies didn’t distinguish between floods and rainfall that were acts of God, and other water damage caused by something like a broken levee. (I have a hard time seeing how a policyholder might think that a flood did not include water from a levee break. A flood is a flood, and flood damage was excluded.) Continue reading