Skip to main content

Exit WCAG Theme

Switch to Non-ADA Website

Accessibility Options

Select Text Sizes

Select Text Color

Website Accessibility Information Close Options
Close Menu

Mississippi Jury Finds State Farm Violated Federal False Claims Act

A federal jury in Gulfport, Mississippi has decided that insurance giant State Farm Fire and Casualty Co. committed fraud against the U.S. government when it submitted false claims to the National Flood Insurance Program after Hurricane Katrina. The case was brought as a whistleblower lawsuit under the qui tam provisions of the False Claims Act by former insurance adjusters and sisters Cori and Kerri Rigsby.

According to the Sun Herald, the sisters-turned-whistleblowers grew suspicious of how State Farm was paying post-Hurricane Katrina claims. The sisters alleged that State Farm falsified documents to make it appear that property damage was caused by flood waters, when in reality it was caused by wind damage covered under the State Farm policy. The whistleblowers alleged that State Farm’s motive in creating false reports was to pay less for wind damage under the policy, and be able to charge the National Flood Insurance Program for more of the loss.

The Sun Herald reports that before opening the case to claims involving other homeowners, the whistleblowers had to prove that State Farm committed fraud on one property – the Biloxi home of Thomas and Pamela McIntosh. Cori and Kerri Rigsby were both involved in processing the McIntosh claim after Hurricane Katrina. According to the Rigsby sisters, State Farm paid flood policy limits of $250,000, but paid only $36,000 out of the $500,000 wind policy limits. State Farm then submitted a claim to the National Flood Insurance Program for $250,000.

The verdict means State Farm will have to repay the National Flood Insurance Program $250,000, plus an undetermined amount of damages. In addition, it may cause the examination of thousands of claims paid by State Farm after Hurricane Katrina.

According to the qui tam provisions of the False Claims Act, the whistleblowers will receive a portion of the recovered money.

Facebook Twitter LinkedIn

By submitting this form I acknowledge that form submissions via this website do not create an attorney-client relationship, and any information I send is not protected by attorney-client privilege.

Skip footer and go back to main navigation