Judge OKs Testimony by State Farm Whistleblowers

Two sisters, Cori Rigsby and Kerri Rigsby, claim that State Farm defrauded the government in the wake of Hurricane Katrina. U.S. District Judge L.T. Senter Jr. ruled that the Rigsbt sisters will be allowed to testify in their lawsuit against State Farm.

Monday, U.S. District Judge L.T. Senter Jr. ruled that Cori and Kerri Rigsby’s work as insurance adjusters gave them "relevant knowledge of the allegations at hand" and that the two should be permitted to testify.

The Rigsby sisters allege that State Farm wrongly denied claims arising from Katrina, shifting costs onto the National Flood Insurance Program.

Michael Newsom, Biloxi Sun Herald 08/10/2009 Read Article: Biloxi Sun Herald

State Farm’s hard-nose practices are catching up with the insurer.

It’s not uncommon for insurers like State Farm to be unreasonable with small claims. The tactic is simple: Resist the small claim as much as possible. Because of the amount of money involved, most lawyers will decline representation. In the end, the insured will have no recourse but to go away. More often than not, the tactic works. However, it failed recently in a Palm Beach County Courthouse.

Charles Turner Sr. lost two sons as a result of an auto accident. The accident was caused by the negligence of one of his sons. Rather than pay Mr. Turner the $10,000, which was State Farm's policy limits, State Farm forced Mr. Turner to go to trial and to endure the humiliation of arguing that one of his son's caused the death of the other son.

Mr. Turner's attorney, Harry Shevin, argued that State Farm was in bad faith by forcing Mr. Turner to file suit to recover money for the loss of one of his sons. After 20 minutes of deliberation, a Palm Beach County jury agreed and entered a $10 million judgment against State Farm.

This type tactic is not uncommon among insurers like State Farm and Allstate, both of whom have a rich history of dirty trial tactics. Only punitive damages will cause insurers to stop these bad faith practices. Read: Trial looms over millions in teen's death