An employee currently employed by State Farm Insurance Co. has verified that the insurance company has been shredding records relating to claims arising out of Hurricane Katrina. It appears that State Farm has been shredding records weekly at the Biloxi Catastrophe Office and on various schedules at other south Mississippi offices since Hurricane Katrina hit. This verification comes from Shred-It, the company that does the work, and that’s not good news for State Farm policyholders. State Farm claims that the records were shredded for very good reasons and that it wants to keep customer information out of the wrong hands.

The State Farm employee, based in Biloxi, told the Sun Herald that at least one shredded document was an engineering report that went missing after Mississippi Attorney General Jim Hood subpoenaed records of this sort from State Farm for use in a grand jury investigation. The Attorney General says that he also had subpoenaed that specific report and others for his lawsuit against State Farm. He says his office is trying to determine whether insurance companies are using falsified engineering reports to blame tidal surge for property damage and thus deny claims.

The Biloxi employee who told about the shredding is a current claims representative on the State Farm Catastrophe Team. The employee first learned, while working on a policyholder file, that an original engineering report had been destroyed. He was told by a co-employee that the engineering report in question had been shredded. Apparently, this was after State Farm had been subpoenaed by Attorney General Hood to produce all the engineer reports for the grand jury. Even if State Farm is somehow able to justify shredding documents, I have to say that it sure doesn’t sound right under the circumstances.

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