Insurance Adjusters Sue Katrina Whistle-Blowers

From the Biloxi Sun Herald:

GULFPORT, Miss. - A company that contracts with State Farm Insurance has sued two former employees who are helping a prominent attorney build cases against the insurer for denying claims after Hurricane Katrina.

E-A Renfroe and Company, a Birmingham-based insurance adjusting firm, alleges in its lawsuit that Cori and Kerri Rigsby broke the law when they turned over reams of internal State Farm records to attorney Richard "Dickie" Scruggs.

The sisters were assigned by Renfroe to help adjust claims for State Farm. The sisters claim the documents show that State Farm manipulated engineers' reports on storm-damaged homes so that policyholders' claims could be denied.

The sisters resigned from Renfroe after telling a State Farm supervisor in June that they were cooperating with Scruggs. The Rigsbys also turned over copies of the documents to state and federal authorities.

Renfroe's lawsuit, filed earlier this month in a federal court in Alabama, accuses the sisters of violating the Alabama Trade Secrets Act and breaching confidentiality agreements with the company.

In a related story, the Sun Herald reports that "Managers at State Farm will have to testify under oath in a Hurricane Katrina lawsuit, despite the company's protests that they might incriminate themselves in an ongoing criminal investigation."

More on altered engineering reports used to deny claims can be found here.