A lawsuit that emerged from the aftermath of Hurricane Katrina has been making consistent headlines in the past decade. Two adjusters found themselves caught in a battle against insurance giant State Farm after trying to present documents showing foul play in dealings with victims of Katrina. 

The Rigsby sisters may not ring any bells with those who haven’t been keeping up on events in the insurance-sphere since 2005, but what they’ve been doing holds a certain level of importance.

In the aftermath of Hurricane Katrina, two sisters – Kerri and Cori – found themselves managing several catastrophe adjusters. After a while the sisters began to notice several trends while working with State Farm Insurance. The most notable issue was that State Farm was not properly categorizing the damage done to the properties.

State Farm shot back, and tried to claim among other things that the sisters were still under the constraints of a non disclosure agreement. In fact, in 2008 the sisters were effectively disqualified from testifying against State Farm.

The entire situation has seemed strained since then despite the sisters having some 15,000 documents they say prove the accusations against State Farm.

Fortunately, the sisters have garnered a partial victory as noted by Chip Merlin over at Property Insurance Law Blog. According to one of his more recent posts, State Farm’s attempt to  shut down the case over the non disclosure agreements was overrun by the Supreme Court.

What was the reason?

In this case, there was evidence that adjusters were effectively told to presume flood damage instead of wind damage. There was also evidence that State Farm knowingly violated W5054, concealed evidence of wind damage, and strong-armed an engineering firm to change its reports.

While evidence that the sisters may have acted unethically still exists, it should not discount the larger issue with State Farm’s bad practices.

What do you think? Do you agree with the Supreme Court that there is evidence or is it too soon to tell?