Posted On: April 22, 2007, 3:14 pm CDT

Posted By: a -Z CARES

BLES. Edward B. Rust, Jr., will be happy to tell
you that he is the Chief Executive Officer of State Farm Mutual Insurance
Company. He has deep family ties to State Farm, as his father and grand father
have both served in that capacity. He will also tell you that he is an educated
man who has been to law school and is a past practicing attorney. In addition,
he was the chairman of the Coalition for Excellence in Education and a member of
George W. Bush's transition advisory team on education. So with all of that
education why will he not deal with his company's inbred greed. Does he not
know that we are in the 21st century where anyone can look on the internet and
see the billions of dollars that are being spent to protect their empire from
the consumer?
In Utah, the company was fine $25 million in punitive damages, in part for the
"systematic destruction of documents and systematic manipulation of individual
claim files to conceal claim mishandling". An Idaho appeals court fined the
company $9.5 million in punitive damages for making use of "a completely bogus"
outside bill review company that helped lower the cost of medical bills. In
October of 1999, an Illinois jury rendered a $456 million judgement against
State Farm and an additional $730 million in punitive damages for the insurer's
breach of contract with auto policy holders by relying on generic replacement
parts. Rust was adamant in his insistence that fraud had not been committed. A
class action law suit in the name of State Farm policy holders was filed in 2003
for breach of contract and statutory consumer fraud in which $1.1 billion was
awarded to plaintiffs. When a company is misleading the public, should that not
be considered fraud? A consumer would go to prison for that type of behavior.
State Farm will let you know that, in several states, fraud and abuse is
pushing up the cost of auto insurance. A court in late 2001 reached an
unfriendly consumer decision that could have the effect of reaching deep into
the pockets of the consumer. Sharply higher jury awards in vehicular liability
cases are putting additional upward pressure on auto insurance rates. The
average jury award in auto liability cases rose from $187,000 to $269,000 in
2000, an increase of 44%. I question if any of the lawsuits would be necessary
if the company would just fairly pay their claims. The company represents on
their web-site that consumer protection is one of their most important goals,
but do they really think that courts would be awarding multiple millions of
dollars in bad faith claims if that were their emphasis?
State Farm's ratings are based on their financial strength. State Farm
states that their high ratings are also based on strong claims paying ability.
With this ability, why is it necessary for their policy holders to allege that
the claims department was directed, in evaluating their cases, to take them to
trial instead of settling within the limits of the policy? This practice
exposed policyholders to judgments above the limits of their policies, when the
company was attempting to make an effort to win smaller decisions. Two former
in-house attornies for State Farm contend that they were often called upon by
the insurer to represent its' policy holders and were forced to commit "unlawful
and unethical activities, including requiring the two to stay silent about the
rights of the policyholders".
State Farm seems to have reckless indifference for the truth for the
purpose of corporate and personal economic gain. State Farm should know that
continued scrutiny of their claims paying practices will continue especially
with the advent of new claims that are surfacing from lawsuits revolving around
Hurricane Katrina.
A message to Mr. Rust, and any employee of the company that is acting in bad
faith for its policy holders. Its time to stop no more. Melanie Hodges