Posted On: November 29, 2008, 10:24 pm CST

Posted By: fraud prevention

"In an economy like this, Californians are relying on the insurance commissioner to keep premiums as low as possible, but Commissioner Poizner refused to hold a hearing to investigate rate hikes that will affect more than 2.5 million homeowners," said Douglas Heller, Consumer Watchdog's Executive Director. "We reviewed the proposed rate increases and concluded that they were unjustified. The commissioner should not have allowed these insurers to jack up prices like this."

At least $20 million of the increase for State Farm was allowed as an exception to Proposition 103's strict limit on excessive insurer expenses in order to let the insurance giant charge customers for "higher quality of [customer] service." Included in Farmers' rate hike was a special exception to the expense limit for millions of dollars allegedly spent on the company's fraud prevention efforts. According to Consumer Watchdog, the company did not meet the standard required to pass those costs on to policyholders.

Consumer Watchdog noted that both State Farm and Farmers are financially well-positioned to pay claims resulting from the recent Southern California wildfires and do not need premium increases to address those losses. The group intends to challenge the Commissioner's decision allowing Farmers' rate hike and is reviewing the propriety of the State Farm increase.
fraud prevention I have a thought to the $25 million in punitive damages $9.5 million judgment against State Farm and an additional $730 million in punitive damages for the insurer's breach of contract with auto policy holders State Farm policy holders was filed in 2003 for breach of contract and statutory consumer fraud in which $1.1 billion was awarded to 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? Fraud prevention from whom Iask themselves!!!!!