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'Satisfied' Customer Now Suing State Farm Insurance

November 21, 2006 10:49 AM

State_farm_memo_nr_1 One 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."

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. 

November 21, 2006 in Hurricane Katrina | Permalink | User Comments (27)

User Comments

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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 | Dec 6, 2006 3:03:57 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 | Jan 6, 2007 10:11:28 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 | Jan 6, 2007 10:51:58 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 | Feb 11, 2007 2:58:30 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 9:36:43 PM

I too was defrauded by state farm as they are very good pathological liars.

Posted by: connie stoia | May 9, 2009 4:26:11 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 | Nov 23, 2009 8:13:48 PM

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