SUPREME COURT TO HEAR KATRINA FRAUD RULING

The US Supreme Court on Tuesday agreed to hear State Farm’s appeal of last year’s ruling by the 5th US Circuit Court of Appeal in New Orleans that upheld a verdict that the company had defrauded the US government when it shifted a hurricane Katrina-related property loss to the National Flood Insurance Programme. The case was brought by sisters Cori and Kerri Rigsby, who worked as claims adjusters for State Farm in the wake of the 2005 storm. The Rigsbys claimed that damage to a Biloxi, Mississippi home was caused by wind and should have been covered under the owner’s State Farm policy. State Farm, in turn, said that the damage was caused by flooding and should be covered by the NFIP. The jury concluded that the federal government had been defrauded of $250,000 and ordered State Farm to pay $758,000 in total damages.