With extreme weather comes great financial responsibility. Some insurance companies are allegedly attempting to skirt that responsibility.
What’s happening?
“Like a good neighbor, State Farm is there,” is a motto that now feels disingenuous to Koteiba Azzam, a homeowner from Sunland Park, New Mexico. Insurance Business Magazine has reported that Azzam filed a federal lawsuit accusing State Farm of orchestrating a company-wide strategy to underpay insurance claims.
Azzam claims that the investigation conducted by State Farm after a burst pipe damaged his house was deemed “insufficient and unreasonable,” resulting in a lack of coverage, leaving the house in disrepair, and leading to the premature closure of his case.
The basis of Azzam’s lawsuit is allegations that State Farm and its consulting firm, McKinsey & Company, adopted a claims management system called “Fire ACE,” which was a plan to turn the claims department into a profit center…