With the State Farm policy holders slabbed by Katrina, slabbed by State Farm’s handling of their claim, and most recently slabbed by Judge Senter’s disqualification of their legal representation are left twisting in the wind, State Farm “vigorous defense” is now a transparent attempt to slab them – and justice – once again.
The Motion to Stay filed yesterday by the attorneys for the Rigsby sisters noted the transparency.
This motion is nothing more than a transparent attempt to focus attention away from the fraud State Farm perpetrated on its own policyholders and on the federal government, and create a side-show big enough to camouflage its own obvious wrongdoing.
Comments on the web, however, suggest State Farm’s camouflage is wearing thin…
For two years, State Farm, insurance industry lobbyists, the Wall Street Journal, and national business writers have been pushing the fiction that the whole Katrina insurance dispute is nothing but a shakedown orchestrated by Dickie Scruggs. This allows them to avoid any investigation of the facts of the cases.
Scruggs is not and was not the center of the universe.
Other attorneys sued State Farm and several had better results in court and better settlements out of court. Other insurance companies did not systematically assign all damage to flooding the way State Farm did.
State Farm deserved every suit filed against it, but has successfully manipulated the media to focus on the personalities instead of the facts.
…and folks don’t care for what they’re seeing – some obviously thinking worse of State Farm than Scruggs.
When you get into a fight with a skunk you had better have a damn good strategy on which way to haul ass if things go south. Dickie(The Bully) did not have a blue clue on SF’s strategy to deal with skunks. If the truth EVER be known SF researched every motion in every case he had ever filed. They knew where he was and who he was meeting with and what was being said. Maybe Skunk Dickie got OutSkunked by the Biggest Skunk of all and look who the losers are, the SF policy holders in Katrina’ Aftermath.
Most surprising of all, however, was the open acknowledgment of what the Rigsby attorneys claimed was a sideshow.
The fact that State Farm lawyers turned this brief around in a few hours tells me State Farm has learned a lot about controlling the news cycle and effectively promoting its position. Compare that to 15 months ago, and it’s like night and day. Take a good look, ladies and gents, because what you are seeing, what you have seen the last nine or 10 months, is one of the most sophisticated and successful corporate litigation and public relations strategies you will see in your lifetime. I mean, for a while Scruggs had it all goin’ on with linking public relations with litigation, but this rivals any effort ever put out by Scruggs.
It will soon be the third anniversary of Katrina without justice for the slabbed – justice delayed and denied by State Farm’s continued attempts to deceive.
You people keep missing the point. Anyone who was within storm surge range of the Gulf and didn’t buy flood insurance slabbed themselves.
Flood is flood is flood. Buy the insurance and collect on it, or don’t buy it and don’t. But there is no “don’t buy flood but collect anyway” option.
Why did Scruggs feel he needed to launch a combined political/criminal/PR/civil assault on State Farm and the other carriers? Because he had neither the facts nor law on his side to win the case on the merits.
The old lawyer’s expression goes like this: “If you have the facts on your side, pound on the facts. If you have the law on your side, pound on the law. If you have neither the facts nor the law on your side, pound on the table.”
The whole Scruggs strategy was table-pounding, and because State Farm resisted it, it has unraveled before our eyes, torn apart by Scruggs, et al’s greed and lack of ethics and the case’s own internal inconsistencies.
However, time will tell. If State Farm’s behavior was as bad as you say, and plaintiff’s case as strong as you think, there will be a line of lawyers a mile long wanting to take over the cases from the SKG or KLG or whatever they are calling themselves these days. If, however, plaintiffs find themselves unable to secure successor counsel, that will speak loudly about the lack of merits of their cases.
Time will tell.
Mr. Claimsguy somehwere along the line you missed the fact that many other lawyers like Chip Merlin have been kicking State Farm’s ass and taking names this entire time down here. You can talk about Dickie Scruggs like it means something but the facts have been on the side of the State Farm policyholders whether they were represented by Scruggs or Merlin.
State Farm can spin it anyway they want but the old saying Money talks, bullshit walks comes to mind when I read comments that insinuate anything other than the simple fact that the boys from Bloomongton wouldn’t be paying a dime if they felt like they had a legal leg to stand on.
True, Sop, but what Mr. Claimsguy and others also miss is how much trust people here have always placed in State Farm. It was almost a “status symbol” to have your insurance with them. So aside from the actual loss, we’re dealing with a lost of faith in our trusted “good neighbor” – and their defense strategy is only increasing that sense of betrayal. It’s beneath them – or what we all thought of them – to mount a defense that disqualifies the legal counsel selected by their policyholders.
State Farm can recover any money lost from paying Katrina claims but if someone in the company doesn’t insist they defend this case with dignity and put a stop to what’s going on, they may never recover the reputation they once had as our trusted “good neighbor”.
A lot of you think you know what happened by watching the media. Most of you have failed to remember that less than 1% of Katrina claims have been disputed. I personally handled Katrina claims…I had one customer tell me wind caused the damage, even though the roof was FULLY intact and the home was damp and wet. You do not need an engineering degree to make that decision. Many customers make that same argument after the media began reporting that private insurance does NOT cover flood. Interesting point here…if Scruggs/Hood stated that insurance covers flood, then why did Scruggs and Lott have flood insurance, and they collected $250k on their policy. If private insurance covers flood, why do they accept that payment? They want their cake and eat it to. It does not take a genuis to understand…Scruggs wants money; Hood and Lott are trying to save face with their voters. Less than 1% of 280,000 claims are being disputed! Private insurance paid out BILLIONS! Why would an insurance company risk their reputation over 1% of their claims? BECAUSE the customer did not have coverage! Notice that customers that were located miles inland are not filing the lawsuits! There is an old saying in the claims world, “if in doubt, pay it out”…it means if you cannot be 100% certain the claim is NOT covered…then you have to extend coverage. The private insurance industry LOOKS for coverage, and errors on the side of the customer. I know, i handled 300-plus Katrina claims, I did not deny one claim! Insurance also has an obligation to only pay what it owes. My premium is directly influenced by the claims paid out…I do NOT want to pay higher preiums because insurance companies are paying claims not covered because this was a bad disaster or media pressured it…I do not feel I should be subsidizing other people’s decisions to not have flood insurance or living in a flood plain. You reep what you sow…stop looking for handouts!
IAWT – that makes two of us who worked there – you and me – and Sop who actually was slabbed. I’m going to let him respond and just welcome you to slabbed.
Welcome to slabbed Mr Independent adjuster. There is some validity to what you wrote and there are inaccuracies too. First I
I truely understand your passion and desire to rebuild the community. What many people do not understand (a lapse of good judgement by the media) the horrible present state of insurance in the coast is a result of the political environment. When LA, MS, AL want to make private insurance retroactively cover non-covered claims, it creates an environment of bad business. Insurance lobbyists for years of requested the legal ability to take flood insurance off the gov’t hands and into the private market. When the leaders of those states decide to figure it out…the citizens will have a free market to choose the right insruance for them, capitalism at it’s finest. By the politicians are making it worse, not the insurance companies.
A notable fact…State Farm’s market share in LA, MS, AL after Katrina….increased…do you know why? CUSTOMER SERVICE!
I agree that not every claim was handled perfectly. I have made coverage mistakes on theft claims, hail claims, etc…new facts, customers withholding of facts, timelines can all impact whether or not a claim is covered. With years of claim handling experience, I can better able to understand the nature of these disputed claims more than you can.
Claims mangers seeking opinions or asking for re-inspections is a common practice. I had an engineer once deny a claim, only for me to overturn it…had I stuck to the engineer’s report, the customer would not have been paid. So King asked for a re-inspection…that’s common…sometimes the report is overturned in the customer’s favor, sometimes it’s not.
Funny thing…when I overpay a claim, my employer does not ask the customer to pay the over-pyment money back…BUT the world comes to an end if a claim is underpaid. Nor do we make a customer repay us if we mistakingly pay a non-covered claim.
How much of your preium is tied directly to fraudlent claims? It’s claim rep’s obligation to inspect the damage, estimate the damages, make a coverage determination, and not pay a penny more needed to repair/replace the covered loss…overpayments are a diservice to every customer of that insurer. These slab cases were handled with the best intentions…not to make life bad for customers.
So in the end, slab cases are impossible to adjust perfectly….and admittlingly there is covered damage to pay, how much though? State Farm has never pushed back against those, and arbitration is used to resolve those disputes. Some end up being over paid and some under paid. Imperfect settlements are a result insufficient evidence to support both sides.
I agree, slab cases may have not been handled perfectly. But, since it is a fact that storm surge casued damage as well, simply paying policy limits on slab cases is then “slabbing all policyholders” and simply paying flood limits is “slabbing taxpayers”. So…since slab cases cannot be proven 100% in favor of the insurer or insured…these have to be worked out. And they are!
In regards to Scruggs and Hood…they were trying to force private insurance to pay non-covered flood claims, THAT IS WRONG!
State Farm was trying to make right decisions and help people, it was not purposely trying to hurt or cheat anyone, that is FACT! State Farm employees were major contributors in donating relief aid. FACT! The State Farm employees were trying to do the right thing…it was sincere and from the heart. AGAIN< FACT. I worked with almost 300 State Farm claim reps…I can provide hundreds of heart wrenching stories of helping our customers. I witnessed one co-worker talk a customer out of suicide over the phone. I had customers shed tears of happiness when I handed them a check. MORE FACTS!
State Farm “slabbing” people systematically…if you think that then it shows your limited knowledge, which is hand-fed to you by the media. I know the background and behind the scenes details.
Now, let’s talk about the purposeful actions to hurt and cheat…political corruption, bribery, extortion, contempt…these are facts that Scruggs, Balducci, Rigsby sisters et al have already plead guilty or currently being tried. FACT!
Notice no State Farm employee is being charged with the same actions. State Farm has nothing to gain by cheating anyone…Scruggs et al had a lot gain…money, re-election, etc.
I’m sure you have years of experience in some industry or topic…and my knowledge in that area is limited…you might be able to teach me. In regards to insurance industry…it was my college education and my life for many years…I can say with 100% confidence, unless you are employed in the public affiars dept with a private insurance co…then you do not have all the information…
FACTS are this…State Farm employees endured harsh conditions to provide heart felt assistance. Scruggs et al, systematically abused the law for personal gain!
These FACTS help many people understand who to trust…reminder, State Farm busines INCREASED after Katrina…and lawyer who fooled us to believe he was helping the citizens…faces prison.
BTW nowdoucit…you’ve been slabbed.
Obviously I don’t see things quite that way Mr Independent Adjuster. Jim Hood nor Dickie Scruggs forced State Farm into anything and they certainly have no responsibility for State Farm claims managers ordering up multiple engineering reports on properties like Mr Beckhams or the McIntoshes. I’ve seen copies of the reports myself and think on balance the media reporting here on these cases has been accurate.
I understand the latest State Farm PR blitz tries to portray the wind water litigation as centering on Dickie Scruggs but we both know that is not true. Like I said earlier to Mr Claims Guy, Chip Merlin and a host of other reputable trial lawyers have been making State Farm pay and pay big since 2006. It doesn’t jive with your talking points so I understand your desire to avoid that unpleasant fact. However, as much as you guys would like to forget the Diamondhead Slingshot Group they are also forever a part of this story.
I submit that you along with a host of other State Farm adjusters that came here temporarily after Katrina did great work in harsh conditions as you pointed out. But you left, most likely before the slab claims were denied and the fallout from decisions made above the field level manifested themselves to the point where dissatisfied policyholders felt the need to take to the streets in protest. I’ve been here all along and know the score that way – I’ll grant I’m not a professional adjuster but then again it doesn’t take a professional adjuster to know the meaning of settlements at 100% plus on the policy limits.
Finally I also disagree with your assertion the problems we face in rebuilding lie at the feet of our current politicians. As then New Orleans Federal Reserve Bank board member Dave Dennis clearly states insurance is the 800 pound gorilla standing in the way of our recovery. That’s not the fault of State Farm though, rather IMO it is the result of failed public policy with roots going back all the way to McCarran Ferguson and our patch work state by state system of regulating the insurance industry.
sop
IA, if you mean “slabbed” by your comment, I welcome the direct contact too much to object. It’s the ” wolf-in-sheep’s- clothing comments of those who attempt to discredit me on State Farm’s behalf with words like “ridiculous” that I find offensive.
Sop and I both have friends who are State Farm agents that we hope will be able to rebuild/recover their pre-Katrina business
Very good dialog on both sides. Even “balanced” I might add. Something another agent told me from down there (yup, I’m an ins. agent so there’s the disclaimer,) was that many of the people that got slabbed that had flood insurance collected 100% payment on the flood policies and 100% from the citizens plan down there. If this is correct, is it ethical or legal? I am told that the agents cannot divulge this information because of privacy laws and that some were threatened with private lawsuits if the information got out because their insureds knew how they would look to the people that got zilch.
I am sympathetic to the company’s position (of course you say,) but here is a good analogy using car insurance which I sell: IAssume you have a car that only has liability and collision coverage on it and you do not carry other than collision coverage (comprehensive). In the middle of the night you hear a loud noise and when you go outside there are just a few small pieces of plastic and glass where your car used to be. It has been stolen (apparently after the thief rammed it with their car.) Now you file a claim for the total value of the car because even though you dont carry theft coverage, the car was a total loss because of how hard the thief hit it. You cant prove how hard it was hit, the insurer cant prove how hard it wasnt hit. Should you collect 100%? If you feel so, how would you feel about the rate increases that would inevitably come about from people filing these same types of claims? What if there were 100 of these, 1000 of them? More? I think this demonstrates easily why there is such a morass about the insurance issue.
AOR first let me welcome you to slabbed and apoloigize for my blog partners brain fart in accidently deleting your comment. Thankfully we are emailed all the comments so I replicated it. I thank you for recognizing the balance we strive for here on slabbed.
I’m ragged to the extreme having completely my 14th hour on tower so I’ll give you a short answer to your questions with some longer ones perhaps on Wednesday.
On the question of the wind pool payments in addition to flood insurance the answer would depend on what the property was worth. For instance flood maxs at $250K – if a house was worth $600K then it would be entirely appropriate for wind to pay $350K for example. That said I think it is true the wind pool adjusters were very generous in the estimates without a doubt. It is also true that people in the wind pool paid dearly for that coverage before Katrina. It is and always has been more expensive than a private wind policy, in my mind priced to pay no questions asked.
You bring up a good anology with your car accident scenerio. I’ve found out since Katrina the answer from a legal standpoint depends on the type of coverage, multi peril or named peril. And even then there are inherent problems with adjusting the claim of a vehicle that is not there as you point out.
The solution has to come legislatively, WYO insurers are in a bad spot. They have a duty to the taxpayers to adjust wind-water claims with a good faith apportionment of the damage yet as you pointed out in your anology in many cases there was not much evidence upon which to base the claims adjustment.
The outrage comes from the initial outright denial of coverage and then dislcosures of some engineering opinion shopping. My wife’s uncle is a retired agent, his take from years in the business was occasionally there are claims managers more interested in notching their belts to move up the ladder than playing by the rules. I do believe the overwhelming majority claims adjusters and agents perform their jobs ethically and honestly. Unfortunately as a commenter noted on Sam Friednman’s blog oftentimes an insurer is judged by the behavior of the rogue claims manager or adjuster, not by the actions of the many who acted in good faith.
sop
Sop! If you’d told me the right side bar was AWOL, it wouldn’t have been necessary for me to tinker with the new plumbing WordPress installed.
I guess I can’t be too mad, you got the comment back up and fixed the sidebar problem – and wrote a great reply.
We do welcome you AOR and I promise not to touch a button next time you comment!
Thanks for the welcome (is there an automatic delete setting for insurance agents?? ha ha.) I would agree that if the “reflex action” was to deny everything without any attempt at negotiating an offer, that is not only not smart, but hardly defendable. I understand too about the flood payments and the wind pool payments being needed to equal the house value but here, you are supposed to insure your house for replacement cost. Dont they have the same requirements there? Here, if you are not insured for full replacement cost on the house, you dont get replacement cost settlements for the house or its contents in any type of claim whether it is a total loss or not. If you insure your house for 50% of the replacement cost and a hail storm causes you to need a new roof, you only get 50% of the cost of the new roof. That way, people know they have to pay for what they will ultimately want to collect. As I have been told and read in some of the pleadings, people needed and got 100% of the flood and 100% of the citizens policy to “make them whole.” My question would be how does the water come and destroy a house that was already 100% destroyed by wind? I read that in particular was the case for Sen. Lott’s house.
I agree that the devil is in the details when it comes to laws, contracts, legal precedents, etc. I saw the same thing in Florida after the 2004 hurricanes. What happened there was each homeowner that had a “hurricane deductible” on their policy never anticipated having more than one storm in the same 12 month period. Now, deductibles on houses work the same way they do on cars. You have a deductible for each loss. (not one for the year as in health policies.) Anyway, insureds that were faced with 2, 3, and 4 deductibles felt it was unfair to them to have these applied per loss (even though their insurers charged them for that arrangement.) They complained, sued, and it was enacted or legislated, I am not sure which, that there would only be one deductible applied to those people for that year. Fair? Dunno for sure but it sure seems like the ins. co. still gets stuck for something they didnt charge for.
Again, appreciate the blog and the ability to see both sides of the very important issues facing coast residents. Keep it up!
AOR
Welcome back – and thanks for noting that we see both sides of not only a “very important issue” but a complex one.
BTW, there’s no auto delete for anyone – but you landed in the spam filter and I went in to get you out. Let’s just say I don’t fish as well as Sop! : ) He’ll be here to answer you just as soon as he’s done.
I will be here to make a comment but not today. My brain is fried and a Grey Goose martini awaits.
sop
“but here, you are supposed to insure your house for replacement cost. Dont they have the same requirements there?”
There is no requirement here in Mississippi that one must fully insure their property though I agree having a replacement cost endorsement is an excellent idea. I personally buy it and paid extra on my inland properties to eliminate the Hurricane deductible too.
“My question would be how does the water come and destroy a house that was already 100% destroyed by wind? I read that in particular was the case for Sen. Lott
Thanks SOP. Looking forward to reading more of the commentary as things develop there.
Peace.
Your most welcome AOR and thanks for coming by.
sop
The problem with insurance CLEARLY is one of Congressional inaction. It dates back prior to Katrina. The industry post 1992 made a decision to retreat from inclusive wind coverage on the US shoreline. This decision was based upon the believe that a hurricane which hit a major populated area could result in the insolvency of those companies with inclusive wind coverage in the impacted zone.
Congress SHOULD have acted to protect our Nation from this risk and even promised to do so with the passage of Homeland Security. To date Congess has not been able to develop an insurance model which protects tax payers and consumers. The insurance industry has found a way to write policies with coverage gaps as big as the grand canyon while charging ever growing premiums for the non-coverage.
Who’s fault is it? Congress. They are the ones elected to protect the federal treasure from looting and consumers from abuse by non-regulated insurance barrons. Industry. The industry is at fault for violations of its own contracts and not ensuring that its customers were aware of their lack of coverage. Consumers. Consumers are at fault for not demanding basic insurance coverage which works. Enough blame to go arround yet no solutions. HR 3121 offers a good balance for consumers, tax payers and industry needs. Yet has not yet taken traction in Congress.
Congressional inaction has resulted in a stalled recovery post-katrina which has cost the federal government untold billions in housing expenitures to fill the gap in housing which as resulted from our Nations broken insurance model. It is a classic lose/lose model. The cost in human suffering in the Katrina Zone is great and that my friends it the ultimate tradegy. That our Nation in the aftermath of its greatest natural disaster has left the victiums of the disaster without a private marketplace inwhich to rebuild its lost housing stock.