‘Satisfied’ Customer Now Suing State Farm Insurance
EmailOne of State Farm Insurance’s "satisfied" customers on the Mississippi Gulf Coast is now suing the company, joining hundreds of other policyholders who allege State Farm defrauded them over their Hurricane Katrina insurance claims. Thomas McIntosh’s case was shown on our 20/20 report, which detailed allegations that State Farm supervisors in many cases demanded that Hurricane Katrina damage reports by buried or replaced or changed so that the company would not have to fully pay policyholders’ claims in Mississippi. After our report aired, State Farm released a statement saying that McIntosh, in fact, "did receive payment and has declared that he is satisfied with his payment and the way his claims were handled by State Farm." THE BLOTTER RECOMMENDS The Case of the Missing Engineering Report Whistleblowers Sued for Speaking Out and Wearing State Farm Jackets on 20/20 Click Here to Check Out Who’s Blowing Hot, Cool and Smoke Today on Our Homepage After learning that we planned to mention McIntosh’s case in our report, State Farm asked him to meet with two attorneys representing the company. McIntosh says the attorneys presented him with what they called two "confidential" versions of an engineering report on his home dated Oct. 20, 2005. These reports indicated that the damage to the McIntosh home was largely caused by water, which was not covered in his insurance policy. McIntosh says, as a result, he was only paid about $36,000 on his claim despite suffering losses of over $1 million. After viewing the engineering reports, McIntosh signed a statement written by the attorneys, acknowledging that he was "satisfied" and had "no dispute with State Farm over any insurance issues relating to the adjustment or payment of any claims by State Farm." However, after his meeting with the State Farm attorneys, ABC News contacted McIntosh and made him aware of an earlier, pre-existing engineering report on his home. This report, dated Oct. 12, concluded that "the interior damage of the structure is primarily the result of the failure of the windows, wall and doors due to the wind." Wind damage is covered under State Farm policies. A copy of the first report also included the image of an attached "Post-it" note that read: "Put in wind file – do not pay bill – do not discuss." State Farm has told ABC that despite an extensive search of its files, it cannot find any record of McIntosh’s first engineering report. McIntosh has retained well-known Mississippi trial lawyer Richard Scruggs and has sued State Farm for allegedly undertaking "a fraudulent, illegal, tortious, and unethical course of conduct." The lawsuit also states McIntosh only signed the document provided by the State Farm attorneys "out of fear that if he did not cooperate his insurability would be jeopardized." State Farm has not yet responded to the McIntosh lawsuit. However, a State Farm spokesman has said that the allegations are contrary to the way the company does business, and only a small percentage of claims have resulted in lawsuits. Despite the fact that McIntosh is now suing the company, State Farm’s statement declaring him a satisfied customer is still posted on the company’s website.
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It is high time that corrupt excutives do hard time for things like this. Our laws need to be changed to where fines are never enough and that people have to go to jail for this kind of crap.
Posted by: Mike | November 21, 2006, 1:35 pm 1:35 pm
I did not suffer hurricane damage and I pray for those who did, but I would not put this deceit past State Farm Insurance. I was told by my agent’s secretary that I had an appointment to see an “adjuster” after an automobile accident…I was not at fault. The adjuster turned out to be a fraud investigator, 30 miles away, and I was questionned for almost 3 hours in her office, until I told her I was leaving, I’d had enough. The cause? The same secretary who set up the appointment first said that she had “inadvertantly” removed an old car from my policy, and insured a brand new car with basic, no colission, coverage. Then she changed her story and said that I had told her to do this! I finally was paid a check, the car was totled, and moved on. State Farm was never a good neighbor to me.
Posted by: C | November 21, 2006, 3:49 pm 3:49 pm
1. Most of the damage was due to floods caused by the levy breaks and storm surge. 2. The government did not require the people to have flood insurance. 3. The people only bought and payed for insurance for wind and not water damage. 4. It is difficult to separate the wind and water damage. 5. The insurance companies did not charge for insurance against water damage and can not pay for the water damage without going bankrupt. Who is at fault? 1. The owners for not buying flood insurance 2. The government(local, state and federal): a)for not ensuring that the levies were built properly; b) for allowing housing in areas prone to floods without requiring flood insurance. 3. The insurance companies for selling wind only insurance in known flood areas.
Who is going to pay for these faults? The taxpayers!
Posted by: Bill | November 21, 2006, 5:36 pm 5:36 pm
*News Flash*
If it has to do with water State Farm will NOT cover it. And they will move heaven and earth to see to it. They’ll write you a policy that makes like you’re covered then send out rider after rider making changes. I went through it with them only to be told upon making a claim that NOTHING below ground level was covered from flood damage. Our friend in the Chicago area lost their entire house, it was pushed off it’s foundation by flooding. State Farm didn’t cover anything, Yet other insurers were on location writing checks for damages their neighbors had suffered.
Posted by: D. Rogers | November 21, 2006, 6:50 pm 6:50 pm
about 25 years ago i had a problem with state farm , they lied to me ,I proved it, won in the ga supreme court, all insurance companys are crooks, they prey on the misfortune of others. most will probably end up in hell, seems like justice to me
Posted by: steve | November 21, 2006, 8:44 pm 8:44 pm
I was a victim of water damage as a result of Hurricane Rita. I suffered water damage to all the rooms on the north side of my house. The caulking around my windows failed and wind driven rain was forced into the home. State Farm paid for all of the damages to carpets, floor rugs, etc.
Posted by: L Stroud | November 21, 2006, 11:59 pm 11:59 pm
“…joining hundreds of other policyholders who allege STAGE Farm defrauded them over their Hurricane Katrina insurance claims.”
Posted by: dspcarroll | November 22, 2006, 7:48 am 7:48 am
I am a Katrina Survivor. I swam out of my house that is NOT in a flood zone. I know that I was not in a flood zone and opted not to buy insurance for that. I did however, have “hurricane” insurance. This did not cover anything except for a couple of thousand in roof damage. Insurance companies hide behind a law passed in secret that defined flood damage as any wind driven water or rising water. If I had a flood, the Gulf of Mexico flooded and the rest of the coast from the Florida Keys to the tip of the Yucatan Peninsula would have flooded. My house was destroyed by a HURRICANE and the insurance companies would not cover it.
C, your comment about the levies overflowing is an indication that you have no clue as to what really happened. New Orleans did have damage from the levies overflowing but the Mississippi and Alabama Gulf Coasts were hit by a storm surge that was wind driven by a hurricane. Realize that there was more damage done than what happened in New Orleans. They just had more newsworthy incidents (looting, killings, etc) than the rest of us. Our law enforcement professionals maintained law and order and should be commended. But the fact that we were not as publicized speaks for itself.
The fact is, I am forced to buy insurance from a company that would not honor it’s own contract. That’s extortion.
Posted by: Greg | November 23, 2006, 3:41 pm 3:41 pm
If you failed to purchase flood insurance, then you have only yourself to blame.
Posted by: Ferd | November 27, 2006, 4:27 pm 4:27 pm
State Farm wrote the homeowners polity on my house that was severely damaged by Katrina winds and rain. NO rising saltwater flooding was involved but I did take a few feet of saltwater rain through the two large “skylights” Katrina made in my roof when a 120′ tall oak tree came to visit. I have replacement cost insurance. I’ve finally recieved a bid for “covered” damage repair at a bit bit over $140K. State Farm had allowed I had about $50k in structural damges so far, and it took over a year to get that. The percentage of payout to covered damages seems to be consistant with State Farm in MS. Time to go back into “negotiation” with them again.
State Farm is definitly a good neighbor, like a rabid dog!
Posted by: Fred | November 27, 2006, 4:38 pm 4:38 pm
Welcome to the reality of coastal life. We in coastal NC have been living with this since Bertha and Fran in 1996. State Farm earned a bad rep back then for the same sort of thing they are pulling in LA/MS now. That said, it’s an old story – insurance covers wind and hail, not flood (there’s no such thing as “hurricane” insurance). Wind-driven water is wind, not water damage, as mentioned by L Stroud above. If you are swimming out of your house, it’s a flood. If you’re blown out, it’s a hurricane (or more likely a tornado!).
After 96 insurance companies here started raising rates and deductibles substantially. When I got my policy in 03 the best I could find was $1000 deductible, Allstate wanted 2% of the house value. As of last year all wind/hail is covered by the state plan, for which I pay 2x my regular insurance.
If you live in a flood zone you should be required to pay for flood insurance. If this was done, rates would be lower due to higher participation. Yeah, only the gov’t would be able to manage it but at least it wouldn’t be run by an insurance company. Lawyers look like saints next to those guys…
Posted by: John | November 27, 2006, 4:50 pm 4:50 pm
Like this is going to make any difference in the world, but here goes:
Insurance companies are run by lawyers.
Most politicians are lawyers.
You do the math.
As for the levies – thank the Sierra Club for halting the renovation/rebuilding of existing levies and construction of new ones.
Posted by: Scott | November 27, 2006, 5:02 pm 5:02 pm
Welcome to the reality of coastal life. We in coastal NC have been living with this since Bertha and Fran in 1996. State Farm earned a bad rep back then for the same sort of thing they are pulling in LA/MS now. That said, it’s an old story – insurance covers wind and hail, not flood (there’s no such thing as “hurricane” insurance). Wind-driven water is wind, not water damage, as mentioned by L Stroud above. If you are swimming out of your house, it’s a flood. If you’re blown out, it’s a hurricane (or more likely a tornado!).
After 96 insurance companies here started raising rates and deductibles substantially. When I got my policy in 03 the best I could find was $1000 deductible, Allstate wanted 2% of the house value. As of last year all wind/hail is covered by the state plan, for which I pay 2x my regular insurance.
If you live in a flood zone you should be required to pay for flood insurance. If this was done, rates would be lower due to higher participation. Yeah, only the gov’t would be able to manage it but at least it wouldn’t be run by an insurance company. Lawyers look like saints next to those guys…
Posted by: John | November 27, 2006, 5:13 pm 5:13 pm
My family had property that was severely damaged by Katrina. Neighbors nearby had little damage–we were destroyed. There was also severe shearing to the TOPS of the trees on our lot. The insurance companies claimed 100% WATER damage for what was obviously a localized tornado. When does a flood avoid the neighbors? You could see the path through the trees. Doh!
After fierce negotiations they offered to pay pennies on the dollar.
I think they should all be tied to poles the next time a tornado comes by. Then they can learn the difference between WIND and FLOOD.
Posted by: Jean | November 27, 2006, 10:31 pm 10:31 pm
In response to C. above:
The government does,in fact,require flood insurance in flood prone areas;you must have it to get a hosing loan. If you have no mortgage,THEN it is optional.
Levee failure has squat to do with this story. This man lived in MS. where most of the damage was caused by the wind driven storm surge.
It also is apparent that the damage to this mans home was caused by wind and that the insurance company is trying to weasel out of paying the bill. This is wrong ethically,morally,and legally. We pay for insurance and it is not there when we need it.
It is not difficult separate wind and water damage,as anyone has lived through an experience like this can tell you. It is not too terribly difficult to tell whether
your home was damaged by flooding or whether it was wind and wind-driven rain.
Tens of thousands have lost everything,including their loved ones,and you are assigning blame to people for not buying flood insurance? Nice compassion there,guy. I can only hope that you never have to endure a tragedy like this.
Lastly,we residents of New Orleans ,and the Gulf Coast,are also “the taxpayers” and we do not deserve to be overlooked.
Posted by: N.O. Resident | November 28, 2006, 2:30 am 2:30 am
I wouldn’t take out a policy with State Farm for anything in this world. They are CROOKS. I had to sue them twice after two auto accidents where their insureds hit me. They didn’t want to pay anything. Crooks, crooks, crooks.
Posted by: Me | November 29, 2006, 4:16 pm 4:16 pm
Mr. Rhee has one problem–why has he not forced the removal of his name from the satified customer list if he has been cheated?? The facts of the State Farm Position is valid as to law. You can not make a company cover an item not named as a covered event in a policy. If you want that coverage than pay for!!
Posted by: Tom Reynolds | November 30, 2006, 3:13 pm 3:13 pm
Mr. Rhee has one problem–why has he not forced the removal of his name from the satified customer list if he has been cheated?? The facts of the State Farm Position is valid as to law. You can not make a company cover an item not named as a covered event in a policy. If you want that coverage than pay for!!
Posted by: Tom Reynolds | November 30, 2006, 3:14 pm 3:14 pm
these guys who live in a house where there is water marks on the walls showing where the flood went up to should stop whining and asking the rest of us to pay their bills(thats who will one way or other either higher taxes or insurance rates)if no marks on walls because house floated away look for marks on nearby objects it was a flood over several hundred sg. miles. water seeks it’s own leval. this was a flood not wind driven rain. unless you lived in a high spot, it was flood damage, we don’t owe you $$. you don’t pay us when we have a tornado
Posted by: rugby | November 30, 2006, 8:54 pm 8:54 pm
this was a flood, we don’t owe you for a flood.
Posted by: rugby | November 30, 2006, 8:56 pm 8:56 pm
I have been with State Farm for 38 years and am currently in a big fight with them. My van was flooded in a flash flood on a major highway in Virginia. After hours of work we got it started and drove back to NC. Two days later it wouldn”t start and all damages state farm is contending are regular maintenance items, not flood damage. The probability of all four “maintenance” problems occuring at the same time is about a trillion to one. Thanks State Farm —see you in court.
Posted by: Randy | December 6, 2006, 3:03 am 3:03 am
how do i contact Joseph Rhee?
i will not post on this blog. comments i have to make will, sooner or later, cost me my job.
Posted by: whistle | January 6, 2007, 10:11 am 10:11 am
As an ex-employee of Snake Farm, I can attest to the fact that they systematically destroy both paper and electronic proof that they continually try to weasel out of paying claims and that they cover up their misdeeds by employing over 1,400 attorneys nationwide. About half of those attorneys are employees and about half are on retainer. If a company has to have that many attorneys, that tells any half-way intelligent person that they have a lot to hide. Besides cheating their policyholders, they continually cheat claimants, agents, and employees. They will spend $1 million to fight a $10,000 claim. They always try to low-ball damage estimates and they continually shred vital information in order to not pay claims. They do not release all documents when ordered by the legal system to do so. They fire or make it so hard on employees who do not buy into their brainwashing tactics that the employees quit. I truly regret ever becoming involved as an employee with this corrupt company and I believe they should be investigated to the fullest extent of the law. They believe employees should live, breathe, eat, drink, dream, etc., State Farm 24/7. They tout themselves as a family oriented company; however, when certain employees have family medical emergencies, they end up making the employees take vacation time instead of paid sick leave for family care (FMLA/FC) and then they end up firing employees or writing them up all of the time if they are out sick more than about 3 days out of the year. I say everyone should boycott this company. I will personally be letting the cat out of the bag about the corrupt things I personally know about. I’d like to ask Ed Rust – How Much Crack or Meth do you smoke every day to come up with these hair-brained ideas of yours?
Posted by: Marty | January 6, 2007, 10:51 am 10:51 am
People, regardless of any personal claim you may or whether you have State Farm as your insurer, YOU NEED TO WRITE TO STATE FARM and let them know what a sham and a fraud it is. You need to write to your U.S. congressmen and representaives and let them know you want them to STOP listening to insurance lobby rhetoric and large corporate interests, and start representing the individuals who make up our great nation. The insurance industry is a hugely wealthy industry; they aren’t suffering; they have never suffered; All losses are passed on to us–the little guy.
It is time for our United States government to stop favorinig them on every single piece of legislation. They are liars and they are crooks. They win the battles because they have billions of dollars to fight the battles. It is time our government helped us, and it is time we, every single one of us, wrote to our representatives and told them so! Maybe a few letters won’t be noticed, but millions of letters will get noticed. WRITE NOW. DON’T PUT IT OFF!
Posted by: jAYE | February 11, 2007, 2:58 pm 2:58 pm
I think that we must be aware that the insurance industry and the mitigation of claims is indeed a very complex issue. The severity of the claim along with the circumstances leading up to the claim add to it’s complexity. Than, of course, there is each individual insurance policy with all the inclusions and exclusions. I suppose many people do not really understand all the fine nuances of their policy when they purchase their homeowners insurance policy.
Posted by: David | May 21, 2007, 9:36 pm 9:36 pm
I too was defrauded by state farm as they are very good pathological liars.
Posted by: connie stoia | May 9, 2009, 4:26 pm 4:26 pm
travelers drop me because i have no center heat have not miss a payment not one time had to put in 2 claims with in 9 years only but no center heat no insurance and i can not get any now thank to travelers
Posted by: ttx | November 23, 2009, 8:13 pm 8:13 pm