Homeowners Sue Insurers for Denied Katrina Claims : NPR

Homeowners Sue Insurers for Denied Katrina Claims : NPR: "Did Insurers Willfully Deny Valid Claims?

Scruggs says State Farm and other insurance companies are operating in bad faith by denying claims without a good reason. In some cases, Scruggs says, insurance companies had two engineering reports done. The first one would have provided coverage but the second one was used to deny payment.

'I think the motivation was for insurance companies to pay as little as possible for as long as possible,' Scruggs says.

Two adjusters who used to work for State Farm have stepped forward, turning over thousands of pages of documents which they say suggest the company willfully denied valid claims. They are now working for Scruggs.

'They saw some things that they believed weren't proper in the adjusting and handling of these claims,' Scruggs says.

A federal judge recently ordered four managers for State Farm to testify about the process the firm used to deny claims in these wind-water cases."

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