State Farm directs Wind and Water Damage Claim be sent to NFIP only.
Barely two weeks after Katrina's hurricane force winds blew through the Gulf Coast, State Farm distributed a memo directing its claims adjusters and engineers to direct the wind and water-based property damage claims to the National Flood Insurance Program only. On page two of State Farm's memo dated September 13, 2005, the company stated the following.
Barely two weeks after Katrina's hurricane force winds blew through the Gulf Coast, State Farm distributed a memo directing its claims adjusters and engineers to direct the wind and water-based property damage claims to the National Flood Insurance Program only. On page two of State Farm's memo dated September 13, 2005, the company stated the following.
Damage to Property Caused by Flood Waters with available Flood Policy Where wind acts concurrently with flooding to cause damage to the insured property, coverage for the loss exists only under flood coverage, if available. State Farm Water/Wind Protocol Memo, 9/13/05.See page 2. |
Outside the radar of the American public's eye,
the company (STATE FARM) essentially gave itself a taxpayer funded bailout.
This unintended taxpayer-funded bailout was not a single nor isolated incident.
(complete story here: http://www.taylor.house.gov/index.php?option=com_content&view=article&id=300&catid=51 )
Rimkus Consulting Group, State Farm, AllstateAt Rimkus Consulting Group--an engineering firm that worked for State Farm, Allstate, and a few other insurance companies, on-site damage assessments that had concluded that wind was responsible for some of the damage were rewritten by engineers back at the office who had never visited the sites. Several engineers who conducted on-site assessments for Rimkus have stated that the company revised their reports to blame all damage on flooding without their knowledge, consent, or consultation.
Forensic Analysis and Engineering Corporation (FAEC) and State Farm
Internal emails between the engineers of Forensic Analysis and Engineering Corporation, a State Farm contractor, reveal that State Farm demanded that they not estimate how much damage was caused by wind and how much was caused by flooding, but instead to simply determine the "predominant" cause of the damage. After FAEC engineers concluded that wind had been the predominant cause of damage to a few houses, State Farm threatened to fire FAEC and agreed to retain the company only after FAEC agreed to rewrite the reports that had blamed the loss on wind.
FAEC emails
Mowbray Uncovers Insurance Companies' Apparent Fraudulent Practices
Award winning investigative journalist Rebecca Mowbray of the New Orleans Times Picayune has reported several cases of fraud in which insurance companies shifted wind damages to the flood insurance program, including allegations that NFIP was billed for extensive repairs to homes with no flooding or minimal flooding, cases in which adjusters used much higher estimates for building materials when figuring the amount of the flood claim than when estimating the wind payment for the same house, and a case in which adjusters attached a list of upstairs contents to the flood claim for ground floor flooding instead of to the wind claim for upstairs damage.
(complete story here: http://www.taylor.house.gov/index.php?option=com_content&view=article&id=300&catid=51 )
Rimkus Consulting Group, State Farm, AllstateAt Rimkus Consulting Group--an engineering firm that worked for State Farm, Allstate, and a few other insurance companies, on-site damage assessments that had concluded that wind was responsible for some of the damage were rewritten by engineers back at the office who had never visited the sites. Several engineers who conducted on-site assessments for Rimkus have stated that the company revised their reports to blame all damage on flooding without their knowledge, consent, or consultation.
Forensic Analysis and Engineering Corporation (FAEC) and State Farm
Internal emails between the engineers of Forensic Analysis and Engineering Corporation, a State Farm contractor, reveal that State Farm demanded that they not estimate how much damage was caused by wind and how much was caused by flooding, but instead to simply determine the "predominant" cause of the damage. After FAEC engineers concluded that wind had been the predominant cause of damage to a few houses, State Farm threatened to fire FAEC and agreed to retain the company only after FAEC agreed to rewrite the reports that had blamed the loss on wind.
FAEC emailsMowbray Uncovers Insurance Companies' Apparent Fraudulent Practices
Award winning investigative journalist Rebecca Mowbray of the New Orleans Times Picayune has reported several cases of fraud in which insurance companies shifted wind damages to the flood insurance program, including allegations that NFIP was billed for extensive repairs to homes with no flooding or minimal flooding, cases in which adjusters used much higher estimates for building materials when figuring the amount of the flood claim than when estimating the wind payment for the same house, and a case in which adjusters attached a list of upstairs contents to the flood claim for ground floor flooding instead of to the wind claim for upstairs damage.
| Insurers bilked flood program, suit says |  |
Adjusters say wind claims underpaid By Rebecca Mowbray - Times-Picayune, May 31, 2007 A newly unsealed whistleblower lawsuit claims that at least eight major insurance companies in Louisiana and their adjusters are ripping off the federal government by overbilling the National Flood Insurance Program for Hurricane Katrina flood damage while stiffing homeowners on wind damage payments under their homeowners insurance policies. http://www.taylor.house.gov/index.php?option=com_content&task=view&id=181&Itemid=36 |
