State Farm Hit With Katrina Class Action Suit

As reported in a wire service story:

A lawsuit filed Tuesday by nearly 700 Gulf Coast homeowners accuses State Farm Insurance Co. of using a
“one-size-fits-all” engineering report as the basis for refusing to cover damage to homes destroyed by Hurricane Katrina.

The suit alleges that the insurer denied many of the homeowners’ claims without investigating whether Katrina’s wind or water was
responsible for damage to their homes.

Instead, the suit claims, an engineering firm hired by State Farm drafted a generic, “one-size-fits-all” report that concludes
all damage to homes on Mississippi’s Gulf Coast was caused by “storm surge” and not hurricane-force winds.[...]

Richard “Dickie” Scruggs, a high-profile lawyer who is suing four other insurance companies for denying claims after Katrina,
filed the suit in federal court on behalf of 669 State Farm policyholders.[...]

“State Farm intentionally suborned and encouraged the corruption of scientific investigation and accepted physical realities …
to achieve the desired result of blanket denials of coverage,” his lawsuit states.

Scruggs, who represents nearly 3,000 homeowners on the coast, also has sued Allstate Insurance Co., Metropolitan Life Insurance
Co., Nationwide Mutual Insurance Co. and United Services Automobile Association. Before Tuesday, however, fewer than a dozen of his
clients were named as plaintiffs in those suits.

That a class action suit has been filed is not particularly surprising. What’s more surprising (I think) is that it’s taken this
long to arise.

You can see the linked article for more information, and I imagine that googling around would provide further details beyond what is
covered in the article. However, the general gist is that Scruggs is claiming that State Farm has been strong-arming adjusters to
conform to the most favorable engineering report they could find, and that the big dog has been destroying evidence to the contrary.

Of course, State Farm, denies those claims.