State Farm has been ordered to pay legal fees and damages of three million dollars to two whistleblowers who called attention to the insurer’s fraudulent actions after Hurricane Katrina. The two whistleblowers, who are sisters, worked for a company that was hired as an independent contractor for State Farm. As part of their work, they visited homes to prepare damage assessments.
The sisters alleged that State Farm committed fraud against the National Flood Insurance Program by blaming damage to homes on the storm surge, which is covered by the National Flood Insurance Program, instead of on wind, which would be covered by the insurance policies that they had issued. The sisters’ case was limited to one property that they had worked on and therefore had acquired personal knowledge of. In that case, the National Flood Insurance Program paid the homeowners two hundred and fifty thousand dollars that was categorized by State Farm as flood damage. State Farm also paid the homeowners a much lower amount, saying that their payment was for the portion of the damages caused by wind. After the fraud was exposed, the insurance giant was ordered to repay the government for the two hundred and fifty thousand dollars that the NFIP had paid to the homeowners, in addition to the damages and attorneys’ fees due the whistleblowers.
It is important to note that the sisters claim that the case which they were directly involved in was not an isolated incident, and that State Farm had a widespread practice of doing the same thing for other claims on properties along the Mississippi Coast after hurricane Katrina. State Farm has filed a counterclaim against the whistleblowers, alleging that they violated the law by taking company files, and that counterclaim is pending.
Barrett Law PLLC: Protecting the Rights of Mississippi Whistleblowers
Insurance fraud can cost homeowners money, in the form of higher premiums for everyone. When the government is defrauded, public funds are used to pay for damages that should have been paid for by a private company. The whistleblowers who exposed State Farm’s fraudulent handling of one hurricane damage claim have opened the door to investigation into whether other claims were handled properly. Hurricane Katrina cost the government a lot of money, and it is important that funds are repaid if it is determined that private insurers did not bear their fair share of the burden. It is important that people who have information about other situations in which similar instances of insurance fraud may have occurred bring that information to the attention of those who can investigate the situation further.
If you have already become a whistleblower, you may be the target of retaliatory action. The Mississippi Whistleblower Attorneys at Barrett Law PLLC are here to help you. Our attorneys have experience with navigating the complexities of whistleblower lawsuits. They can help you pursue recovery for the losses that you have experienced as a result of your lawful actions. Call the compassionate and dedicated whistleblower attorneys at Barrett Law PLLC today at 1 (601) 790-1505 to schedule your free, initial consultation.
