Carrier Claim Numbers Coming in from Last Weekend’s Storms in MS

April 9, 2008

 We’ve had inquiries into the need for Independent adjusters hoping for claim assignments after last weekend’s storm in MS. By way of a brief update, here is an article indicating about 8,000 losses expected with the majority 10K or less. With no carrier in this article reporting numbers over about 2,000 mentioned in the article, it is very unlikely this will produce a large demand for independent adjusters as carriers are very well staffed this year to handle a catastrophe of that size with their own staff adjusters. If we see the numbers rolling over to any significant numbers, I’ll update this post.

 Updated 4/10/08:

Here are some updated numbers reporting 4,450 total claims thus far reported in MS between the carriers polled with 2,300 the largest by 1 carrier for these Mississippi storms:

I’m starting to hear from independent adjusters now being deployed to TX for the Texas hail storms and will update the blog later today with carrier numbers coming in on the other TX and midwest storms from  the last two days.

State Farm Seeks Dismissal on Rigsby False Claim Act/KLG update/ Levee Break (Sher) decision including Overhead and Profit issues

April 9, 2008

It sure is difficult to get to work these past few days with all of the breaking claims news involving Katrina cases.

First we have developments with State Farm’s move to have the Rigsby Whistleblower (False Claim Act )case dismissed, the attorneys removed which actually comes as no surprise after the decision last week that the Katrina Litigation Group (KLG which picked up where SKG- Scruggs Katrina Group left off) could not represent the remaining policyholders on their pending claims nor could the Rigsby documents any longer be used. The surprising news which also should have been anticipated was that State Farm says they have filed a counter suit against them. If you missed the news last week which I didn’t have time to blog about on those actions- just view this topic and this carrier press release to catch up to speed on the court decision on the Rigsby’s and the KLG.

State Farm has released much information including information from the Rigsby’s depositions along with many court documents. Here is a link to their site with more documents than I’ve seen released on any of the blogs and forums thus far (thank you State Farm!):

I have to say that I am very pleased to see several of the insurance carriers posting their side of these stories/hot topics in the news with links to documents and their summary of the carrier position. Years ago when a staff manager, I found it very frustrating when you’d read bad press and could only speak “talking points”  and I often wondered why a carrier wouldn’t respond with more details than the very limited press releases. Things have changed post Katrina I feel sure due to today’s internet environment to include blogs,  forums, and in response to policyholder attorneys posting their side of the story on their websites. Their posts are most helpful to independents who have a very hard time locating information to keep up to date with developments on major hot claim topics and cases between assignments and this is going far to help educate us all rather than just reading bad press in non insurance related news articles, forums, and blogs.

One comment …. I hope the carriers do a better job at maintaining the archived stories on their websites rather than untimely removing them as MS AG Jim Hood did in December 2007 with his web redesign taking down many documents he had up against the carrier. If you missed it, here’s a news story that ran about his site taking down the documents( it’s by run Dec 2007). Leaves you to ask the question- why? I’ve heard folks guesses which include this was within weeks of Trent Lott’s retirement and the Scruggs indictments. Is there something he didn’t want us to view any longer? I have no idea but the timing is certainly interesting. Also- wasn’t it January 2008 (yes it was- here is a news story that ran when this happened at and here is a link to that story here when he reopened the criminal investigation against the carrier? Something he didn’t want them to be able to link to any longer? Again, no idea! In addition. many of the links in forum blogs that were connected to the Scruggs Katrina group no longer work since they have pulled that site down now making it frustrating I’m sure for folks trying to read through former blogs that contained links to any of those documents referred to in posts.

In addition to reading State Farm’s official website with all of the documents you could want to read, run over to Rossmiller’s insurance coverage blog here for great details and opinions from an Insurance carrier attorney point of view, over here to FOLO for more outstanding information. I particularly enjoyed the Folo comment on the release of an aircraft carrier group of court filings having grown up myself as a Navy brat with my dad serving on numerous aircraft carriers so it was quite easy to envision the author’s description. Once you view the State Farm link above and see all the documents- no doubt you’ll agree with the comparison! Finally, the Sun Herald has several news stories up on the topic to include a quote by a Rigsby attorney you’ll definitely not want to miss-here on page 2 of the story. There are links in the story to about 4 other stories they’ve done on the case as well.

Before I move on to the Sher case, I want to point out this comment on the State Farm press release “State Farm has filed a counterclaim against the Rigsbys seeking damages for their admitted, unauthorized, theft of information from State Farm, in violation of the federal Computer Fraud and Abuse Act.” I didn’t know what that act was so doing a search for more information, I found this article by a law firm out of FL which addresses it and shows the fines and the departments having a right to investigate the fraud and abuse: click here to view it. I am curious if the Rigsby’s did this with several attorneys present as the State Farm site info says, would those other participants also be held to this act? Would the Rigsby’s then have an action they can file against the folks that were there acting as their counsel who didn’t tell them about this act or what they were getting themselves in to? It looks like this allegation if upheld will lead to years of more news on these issues, possible fines and sentencing depending on the subsections violated if this located article is up to date. It looks like there is MUCH we still don’t know about what really happened and when (see blog discussions and court docs- did they first meet with Scruggs in Feb 06, Dec 05, Oct 05…when?)

The second major claims news story deals with the levee break decision in the Sher case. Many of the blogs are reporting on the decision but not commenting on a concern many of us in claims have regarding the decision on page 25 where the judge allows 25% for overhead and profit and 20% for basically unforeseen contingency damages due to “unopposed” testimony of the insureds expert. Page 25 also discusses comments about “water hammer” damage which after over 30 years in claims, I have not heard that term used from the claims side. Someone want to enlighten us on that? Going back to the overhead and profit issues and trying to figure out why Lafayette’s Insurance counsel  did not oppose the plaintiff expert testimony, I am curious if that was a calculated move due to the other overhead and profit suit I posted about (click here) on the 20% standard used for overhead and profit on insurance claims by most carriers? They may have just preferred to let this particular claim settle and then those decisions be addressed under the other suit which named numerous carriers. I’d have to go back and look at that to see if Lafayette was one of them but in any case, it would be strictly a guess only. I tried to find the volume referred to by the judge in the  Louisiana Office of State Facility Planning and Control and couldn’t find it on a google search but did find an instruction memo they did release about hurricane damage to state buildings here written in Sept 2005 after Rita and it sure doesn’t sound like they  were letting contractors by with just adding 20% for contingency damages and expenses when you read their comments about inspections on contractors estimates and inspections required on the progress on repair projects. Without being able to review the exact Volume referred to by the plaintiff’s expert as discussed by the judge in his decision, it sure is hard to understand what that has to do with insurance practices and general insurance claim settlement standards isn’t it? You will find the entire decision ruling on the validity of the  flood policy exclusion language on the Sher case here at Rossmiller’s blog on the Sher decision as well as his supplemental blog adding more information found here.

All input appreciated on these cases and the overhead and profit issues addressed by the Sher decision. Just reply below.