A former administrator of the National Flood Insurance Program says he does not believe State Farm committed fraud while adjusting claims after Hurricane Katrina in 2005.
David Maurstad, NFIP administrator for 4 years beginning in June 2004, testified for the insurer in Mississippi federal court during a whistle-blower trial.
Former independent adjusters Cori and Kerri Rigsby allege the company defrauded the federal government by shifting wind losses to flood loss reimbursed by the NFIP.
According to Anita Lee of The Sun Herald, Maurstad and Jim Shortley, a former NFIP claims manager, say they consulted with State Farm and other insurers to come up with a plan to streamline NFIP's claims-handling process after the program had come under fire for paying slaws too slowly.
Following the massive hurricane, NFIP decided claims adjusters could forego line-by-line estimates for each piece of a damaged home when it was clear the damage exceeded policy limits.
The Rigsbys, who worked for an independent adjuster hired by State Farm after Katrina, say State Farm used this approach, which they contend does not meet NFIP protocol. But the NFIP officials say the rules were changed following the extraordinary circumstances Katrina presented.
State Farm says it never attempted to influence adjusters or engineers in assessing damage after Katrina. The company continues to present its case.
Kerri Rigsby testified last week about her knowledge of Thomas and Pamela McIntosh's home in North Biloxi. The case has been limited to this one house—the only home a judge has said the Rigsbys have firsthand knowledge.
The McIntoshes four years ago settled a lawsuit with State Farm, saying “there is no credible evidence” the insurer acted in bad faith while handling their claim.
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