Attorneys for homeowners suing State Farm Insurance Cos. after Hurricane Katrina have long accused the insurer of pressuring engineers to alter reports on storm-damaged homes so that policyholders’ claims could be denied.Now, some of these lawyers claim they have evidence to prove their allegation — internal e-mails from an engineering firm that helped State Farm adjust claims after the Aug. 29, 2005, hurricane destroyed thousands of homes on the Mississippi Gulf Coast.
State Farm denies pressuring engineers to change their conclusions, but the e-mails, obtained Tuesday by The Associated Press, indicate the company was threatening to dismiss Raleigh, N.C.-based Forensic Analysis & Engineering Corp. less than two months after Katrina.
Why? Because the engineering company was – and I quote from one of the emails – “‘too emotionally involved’ and were ‘working very hard to find justifications to call it wind damage when the facts only show water induced damage.'” The response?
In a reply dated Oct. 18, 2005, Down [Randy Down, the firm’s vice president of engineering services] questioned the insurer’s motivations and questioned if there was an ethical problem with State Farm telling the firm what to put in reports. He also suggested that on another occasion, State Farm asked the firm to remove information from a report because “they would then have to settle.”
Oops. Your slip is showing there, State Farm.
Down added in a later email: “I really question the ethics of someone who wants to fire us simply because our conclusions don’t match hers.”
Randy, what your conclusions didn’t match was State Farm’s determination to cheat its clients out of their claims.
So what do we have here? Two of the nation’s largest homeowners’ insurance companies moving heaven and earth to make sure they don’t have to pay off. Allstate is using intimidation and State Farm is cooking the engineering reports. Sweet.
Mississippi Attorney General Jim Hood, who is overseeing a criminal investigation of insurance company behavior after Katrina, wasn’t impressed by State Farm’s denials of wrong-doing.
“It is a document that clearly shows State Farm used engineers and coerced engineers to write a report like they wanted,” Hood said.
Tell me again that the insurance industry doesn’t need to be regulated and watched like a hawk.