Allegations by whistleblowers and plaintiffs lawyers that State Farm Fire & Casualty Co. used a “one-size-fits-all” engineering report to deny policyholders’ Katrina-related claims are stirring up Mississippi’s southern federal district.

State and federal prosecutors and grand jurors are looking into allegations that insurance claims were denied on the basis of a biased engineering report. The allegations were brought to light by two claims adjusters who had worked for an Alabama risk management firm under contract with Bloomington, Ill.-based State Farm.

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