Whistleblowers allege insurance cheat.

• Author: Swartz, Nikki
• Position: UP FRONT

Thousands of Katrina victims not only lost their houses and everything they owned in the storm, but some were further devastated when their insurance companies ruled that their losses were a result of water damage, which was not covered under their policies, and not by wind damage, which was covered. However, ABC News recently reported that at least one insurance company may have deliberately changed, shredded, and destroyed documents that indicated wind damage losses so it would not have to pay Katrina victims' claims in Mississippi.

ABC's report cited two independent State Farm Insurance adjusters, sisters Kerri and Cori Rigsby, who said they have given the Federal Bureau of Investigation and Mississippi state investigators thousands of internal company documents. The Rigsbys, who had worked for State Farm for eight years, said they witnessed "widespread" fraud at State Farm offices in Biloxi and Gulfport, Mississippi, including systematic orders from supervisors that Hurricane Katrina damage reports be buried, replaced, or changed so that the company would not have to pay policyholder claims.

The sisters told ABC that supervisors "pressured" contracted engineers to write reports that concluded damage was caused by water instead of wind. They said reports that concluded otherwise were hidden in a special file and replaced by new reports. In one case, Cori Rigsby told ABC, a State Farm senior coordinator threatened an engineering company that if it did not change the findings in its report, the insurer would not pay the engineering...