A Gulf Coast homeowner claims State Farm Fire & Casualty Co. coerced him into signing a statement that he is satisfied with its handling of his claim after Hurricane Katrina, even though it only paid for a fraction of the damage to his home.
In a lawsuit filed Monday in federal court, Thomas McIntosh of Biloxi claims State Farm obtained his “false and fraudulently induced ‘statement”’ in an attempt to quash media reports about the company’s handling of claims following last year’s hurricane.
The Bloomington, Ill.-based insurer only paid McIntosh and his wife $36,228 for their claim, citing an engineering report that blamed Katrina’s storm surge for most of the more than $1 million in damage to his home.
However, McIntosh says State Farm never told him that its engineers initially concluded that wind, not water, was responsible for most of the storm damage.
Hundreds of policyholders on Mississippi’s Gulf Coast are suing State Farm and other insurance companies for refusing to cover billions of dollars in damage from Katrina’s rising water, including wind-driven storm surge.
State Farm spokesman Phil Supple said McIntosh’s allegations are “absolutely contrary to the way we do business.”
“We dispute these characterizations of our behavior,” he said. “We have worked hard and long to help a lot of Mississippians.”
McIntosh, who met with State Farm attorneys in August, says he didn’t understand the implications of the conflicting engineering reports when he agreed to sign a for stating he was “satisfied that (my) adjustment and payment under the State Farm policies was done correctly.”
State Farm later sent that statement to media outlets, including The Associated Press, that were preparing reports about allegations that the company pressured engineers to alter reports so it could deny claims by McIntosh and other policyholders.
McIntosh says he learned about the conflicting reports from Mississippi Attorney General Jim Hood’s office, which is investigating allegations that State Farm and other insurers fraudulently denied claims after Katrina.
Zach Scruggs, one of McIntosh’s attorneys, said his client signed the statement because he worried that State Farm would cancel his insurance coverage if he didn’t cooperate.
“It was certainly an intimidating atmosphere for anybody,” Scruggs said of McIntosh’s meeting with State Farm attorneys. The company arranged that meeting several days after an ABC News reporter questioned a State Farm attorney about the conflicting reports for McIntosh’s property.
Supple, who said State Farm hasn’t seen McIntosh’s lawsuit, has rejected the allegation that the insurer pressured engineers to change their reports.
“For the small percentage of claims that are headed to court,” he said, “we will look for ways to resolve these disputes while at the same time defending the honorable actions of State Farm and its employees.”
Forensic Analysis and Engineering Corp., the Raleigh, N.C.-based firm accused of issuing conflicting reports for McIntosh’s claim, also is named as a defendant in his lawsuit.
McIntosh’s attorneys say they obtained reams of internal State Farm records from “whistleblowers” Cori and Kerri Rigsby, sisters who worked for a company that contracted with State Farm.
One of those documents was a note attached to McIntosh’s initial engineering report that read, “Put in Wind file — DO NOT Pay Bill DO NOT Discuss,” according to the lawsuit.
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