Winner 1997

State Farm: Good Neighbor or Bad Faith?

KGO Radio

The fast-paced nature of local news radio often precludes what should be a critical mission for the medium—to act as a watchdog in the community. KGO Radio in San Francisco reminds us of the importance of this function, as associate news director/reporter Susan Kennedy spent three months investigating allegations of fraud, forgery and fabrication by State Farm—the state’s largest insurance carrier—in the aftermath of three devastating natural disasters in the Bay area. The enterprising reporter spent much of that time researching court records, complaints, depositions and testimonies, as well as insurance documents, and internal memoranda. As a result, Ms. Kennedy uncovered a system that begins with an internal State Farm training video detailing mad-dog defense tactics allegedly used to delay payment of policy holders’ claims, and also includes allegations of forgery and shredding of documents. Ms. Kennedy’s reports were buttressed by extensive background information, including research of bad faith lawsuits and complaints filed with the California Department of Insurance. As the dimensions of the investigation grew, Ms. Kennedy enlisted the help of KGO-TV, and served as producer for a three-part television series that coincided with a six-segment radio series. In response, KGO received dozens of phone calls from policy holders describing numerous instances of unpaid claims. The California Department of Insurance asked for a copy of the KGO series, and has since been investigating how State Farm handles insurance claims. For its investigative zeal, and its sincere interest in promoting the welfare of its listeners, a Peabody to KGO Radio for State Farm: Good Neighbor or Bad Faith?