State Farm Files Harrassment Claim to Stop Katrina Investigation


With its policies for defrauding policyholders already exposed in another case, State Farm is trying to prevent the fallout of what could be a highly damaging case on its handling of Hurricane-Katrina-related claims in Mississippi. Its most recent tactic is filing a claim against the attorney general of the state of Mississippi, Jim Hood, claiming that hood’s ongoing criminal investigation violated the corporations’ constitutional rights.

Many have come under fire for the slow progress of rebuilding after the 2005, with many homeless, and devastated areas still in need of cleanup. The Federal Emergency Management Agency (FEMA) has suffered criticism for its poor initial handling of the disaster, and its inability to get displaced persons back into their neighborhoods and homes, but more and more attention has been shifting to the cabal of insurance companies, which practiced bad faith both in the selling of policies and in settling claims.

Now the company is making bad faith claims of its own, saying that the AG’s investigation is “in bad faith and for the purpose of harassment.” This follows a complex deal between the insurance company, the state, and a personal injury lawyer representing 640 clients who had difficulties getting their claims settled. In January, Hood agreed to drop the criminal investigation if State Farm settled the claims with the 640 clients. However, Hood reopened the investigation when State Farm did not follow all the provisions of the agreement specified, but instead followed guidelines set by the Mississippi Insurance Commission, guidelines it felt were more favorable.

Whether a corporation really has constitutional rights is a debatable issue, but what seems clear is that State Farm violated the terms of its agreement with Hood, and therefore should not be surprised if Hood feels free to resume his investigation.

If you have been suffering because of the bad faith practices of an insurance company, you can see how difficult it is even for the state to deal with their wily practices. Do not face them alone. Contact today to get in touch with a bad faith insurance lawyer today.