Sen. Trent Lott’s attorney is claiming that State Farm has destroyed or moved reports that showed that homeowners whose homes were damaged by Hurricane Katrina actually had covered losses. I wrote about this before at which time I commented that the rule was when in doubt, provide coverage.
Well, State Farm seems to think the rule is “when in doubt, destroy the evidence.” Now, this is still an allegation, but when it starts to come up more than once, you have to wonder if it is a business practice. One couple makes the allegation and then Sen. Lott’s attorney makes the same allegation based on whistleblowers who have come forward.
State Farm seems to be having problems with these hurricane claims. Heck, most of the insurance companies seem to be having problems. Allstate was sued in Texas and then came back and pulled out of some markets in Ohio because, as their spokesperson said “The current insurance model is not well-suited for handling losses from low-frequency, high-severity, mega-catastrophic events.”
I keep bringing up this point, but no one seems to be listening: if the insurance companies would pay what they owe to begin with then they would have fewer problems.