Stormy E-mail Situation for Katrina Insurer

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Posted Apr 11, 2007, 03:31 pm CST
By Martha Neil

Internal e-mail recently produced in discovery in ongoing coverage litigation against State Farm over damage caused by Hurricane Katrina shows the insurer pressured consulting engineers to alter reports about what caused storm damage to policyholders' homes, the plaintiffs' attorneys say.

Insurers say homeowner policies cover wind damage but not flooding, so engineering reports about the cause of damage could help State Farm deny coverage, depending on the conclusions reached. State Farm denies pressuring engineers. However, e-mail indicates the insurer threatened to dismiss Raleigh, N.C.-based Forensic Analysis & Engineering Corp. within two months after the catastrophic Aug. 25, 2005 hurricane destroyed thousands of homes on the Mississippi Gulf Coast, according to an AP investigation and a Chicago Tribune article.

Zach Scruggs, an attorney for the plaintiffs, says Forensic turned over internal e-mails in the pretrial discovery process for one of the lawsuits brought by hundreds of homeowners.

The e-mails "confirm everything that we have always suspected," he says. "What it says is pretty shocking. This outlines the whole scheme of theirs."

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