ABC'S 20/20 Mischaracterizes State Farm's Claims-Handling Process

ABC'S 20/20 Mischaracterizes State Farm's Claims-Handling Process

BLOOMINGTON, Ill., Aug. 26 /PRNewswire/ -- State Farm(R) is outraged by a misleading story aired on Firday evening's ABC 20/20 program and by depictions made by two external independent claims adjusters, Cori Rigsby Moran and Kerri Rigsby. The story mischaracterizes State Farm's claims handling process in the aftermath of Hurricane Katrina.

The ABC report alleged that engineering reports were altered to deny claims. "How the program characterized State Farm's claims handling is grossly unfair," said Susan Q. Hood, claims vice president, State Farm Insurance.

"The fact is that we sought engineering reports in about 1100 cases, less than two percent, of the more than 84,700 property claims that we handled in the state of Mississippi. We issued payments on more than 60 percent of those claims in which engineers were involved. And in the claims where engineers were involved, we paid far more on homeowner claims than we did on National Flood Insurance Program claims. To be precise, we paid more than $26.5 million in homeowner claims and only $3 million in National Flood Insurance Program claims."

"This evening's report inaccurately portrays State Farm's claims handling policies and our commitment to our policyholders," said Hood. "Our claims associates are committed to operating at the highest level of business and ethical standards. State Farm is committed to paying what we owe, promptly, courteously, and efficiently."

In Mississippi, where the ABC story focused, State Farm paid out more than $1.1 billion in auto, homeowners, and commercial claims. It also paid out more than $790 million in national flood insurance claims for the federal government.

Less than two weeks ago, a federal court ruled that almost all of the damage caused to a coastal home in Pascagoula, Miss., was due to flood not wind. The vast majority of the claims in dispute are also situated along the coast.

In the segment, ABC's Brian Ross shared documents (from among documents shared with Ross by Rigsby and Moran) with attorney Wayne Drinkwater, who represents State Farm in Mississippi, saying the documents demonstrated that there were conflicting engineering reports and that State Farm denied claims. One claim shown to Mr. Drinkwater belongs to a Biloxi, Miss., policyholder who, despite ABC's and the two external independent claims adjusters' assertions, did receive payment and has declared that he is satisfied with his payment and the way his claims were handled by State Farm.

The two women also alleged that State Farm had shredded documents. Like all other large companies and government entities, State Farm has a records management program, which among other things protects the privacy of its customers and appropriately maintains records for regulatory and tax purposes.

State Farm has tried to meet with the two women adjusters who appeared in the ABC 20/20 segment to discuss their concerns. They have refused to do so, despite repeated requests. They are represented by attorney Richard Scruggs.

State Farm handled more than 295,000 property claims and paid (not including payments made under the National Flood Insurance Program) more than $3.1 billion as a result of Katrina. Thousands of State Farm agents and employees from around the country and Canada joined the thousands of agents and employees who already live in the gulf to respond to these storms. "We dedicated these kinds of resources to handle and pay claims, not deny them." said State Farm vice president Mike Fernandez.

State Farm has been working for months with, and providing documents to, the Mississippi Attorney General's office and the U.S. Attorney's office and continues to cooperate with Mississippi and federal officials as they investigate these and other allegations.

"What's so often ignored is that we have thousands of dedicated people, some of whom suffered their own losses at the hand of Hurricane Katrina, who have worked extremely hard in a professional and ethical way to resolve each claim consistently and in accordance with our policies and our commitment to our policyholders," said Hood.

State Farm is a mutual insurance company, not a publicly-traded company. It has been the largest insurer of cars in the U.S. since 1943 and the largest insurer of homes since 1964. It also offers a number of other financial services.

Source: State Farm Insurance Companies

CONTACT: Phil Supple of State Farm Insurance Companies,
+1-309-766-9921

Web site: http://statefarm.com/

-------
Profile: intent