The Gulf Coast has hot and calm days that are merciless for those on the water. I recall my teenage years in Mississippi, stripping to briefs and jumping off a sailboat that was going nowhere fast on a calm morning race in Mobile Bay. I was thinking about that while attending a deposition of Chris McIntosh in Gulfport yesterday and after reading emails from marine engineers who suggest that it will take several months, rather than weeks, for the worst of the oil spill onslaught to reach Florida.

The civil litigation in the Rigsby qui tam litigation seems to move as slow as my sailboat on a calm day. The McIntosh’s claim is a focal point, as the very able qui tam team representing the Rigsby sisters tries to prove that State Farm conspired to overpay national flood claims to reduce its own exposure for amounts owed on State Farm all risk policies. Since State Farm adjusted flood claims, it was an obvious temptation to overpay the non-covered flood peril through Write Your Own National Flood coverage and pay a smaller remainder under State Farm’s own all risk policy. The Rigsby sisters, acting as Relators for the general benefit of the federal government to recoup these overpayments in a qui tam litigation, are attempting to prove this occurred in the Katrina claims handling.

Slabbed has done a masterful job keeping abreast of these developments. The discovery has obtained emails and other State Farm documents not previously made available in the prior individual State Farm Katrina litigation. Policyholder attorneys and those with actions against State Farm should be studying this case as it progresses. As indicated, the litigation has taken quite a bit of time, but the qui tam counsel are doing a masterful job in a very complex matter.

My father is somewhere in Louisiana working on the oil spill mess as a consultant for the state. When we last spoke, he indicated that the oil spill sheen may grow quickly and make the dense and more dangerous part of the spilled oil appear to be coming to shore much quicker than it is really moving. We may have a little more time to prepare for the oil slicks than previously indicated.

Unfortunately, once the slick starts appearing on beaches, it is not just going to stop. Oil is patchy and will deposit on our beaches in various forms, including tar balls. Some marine engineers have sent us private emails suggesting that we will get daily doses of tar balls along the northern Gulf Coast later in the fall and continuing for years.

I will try to get more information on the speed of the oil slick spread. The point is that the water and fishing from Gulfport to Panama City Beach is fantastic right now. People were on water jet skies in Biloxi and there was no scent of petroleum in the air as some previously reported. There is even a contingent of Florida fishermen meeting with officials today in an attempt to open the Snapper season early.

Preparation and steps to mitigate potential damage are always important. Do not panic. Sometimes, things move a little slower than first anticipated–like my sailboat on those calm sunny days.

  • Don Phillips

    State Farm is not the only write your own flood carrier doing what Chip describes.

    I testified in a trial in Pensacola this year where a different write your own flood carrier had a flood policy and a wind policy on a house in Pensacola Beach. Hurricane Ivan caused severe wind and flood damage to the house.

    One adjuster handled both the flood and wind adjustments. The problem was that he put things like upper wall cabinetry; windows & electrical that were above the high water mark; and 100% of the walls, wall coverings & wall insulation under the flood policy. His inflated flood estimate ended up exceeding the flood policy limit. The carrier paid the flood limit of coverage. They also paid the minimized wind loss less the deductible. The insured got screwed out of the money that exceeded the flood limit that should have been paid under the wind policy. Plus the carrier got reimbursed 100% of the inflated flood payout.

    In addition to minimizing their wind claim payout the carrier also got an undeserved benefit on the loss adjustment expense. The storm adjuster’s fee is on a sliding scale based on the size of the loss. By inflating the flood loss the majority of his fee was paid under the flood coverage. FEMA reimburses the write your own carrier the flood adjusment expense.

    The difficult part of this was trying to explain all of this to a jury of six lay people. Despite the defense counsel’s best attempts the insured’s attorney was able to get the jury to understand that the entire flood payout comes from FEMA’s pocket, meaning you and me, while the wind payout comes from the carrier’s own pocket. Thankfully they got that. The insured got the money they had been shorted but the way this claim (and I am sure thousands of others) was adjusted stinks to high heaven.

  • Laureen

    The insurance industry is so big and has so much money they get away with minimizing damages and payouts that prevent the policyholders to repair visible damages to pre-loss conditions without having to pay for repairs themself. As a result policyholders are sacrificing the correct way to repair the damage and are being cheating on a daily basis.
    I have been solely fighting the insurance company and their clients my homeowners association for over 2 years and because I am not represented by counsel they try and put me on their pay me no mind list. My home is been filled with black toxic mold for over 2 years and I still cannot get a full and complete construction estimate out of either one of the them. I have used all of my savings and I am practically broke as a result. State Farm and my homeowners association wanted me to put the walls that were damaged by water back with the mold still embedded in the structure. I could not do that so they are causing me to fight for the correct way to repair our home and for fresh non-toxic air to breathe. WHAT A DISGRACE!!!