This outcome is not surprising. Only the very most undereducated among us believe that businesses can continue to provide service while going broke. Much like the health insurance debate, whereby the cost of doing business (health care) is driving higher premiums, so goes property insurance. No amount of ‘insurance baiting’ can change that fact. Don’t like what you pay for insurance, health of home? Complain to your duly elected insurance commissioner. He sets the premiums and policy terms and conditions (that means whats covered and when, for our attorney friends edification).
He’s so busy running from one fundraiser to another, from one special interest group meeting to another, he’s not even a valid governor in most people’s opinion. Yes, old ladies love that charming smile, and young children think he’s cool. Meantime, the rest of us are drowning with the impact of our insurance premiums, assuming we have premiums to pay from a company willing to write coverage, and he IGNORES consumer groups who have REPEATEDLY offered alternative financial solutions, who simply ask that their proposals be vetted. This is a microcosm of issues that go along with living in Florida. I’m ready to get the hell out of here, my state of birth, because our “leadership” as they like to call themselves, are useless and only interest in politics… what’s good for them and them only. Sickening to the core..
From Associated Press Article in NY Times yesterday:
“We clearly have to have companies that are writing homeowners’ insurance in Florida that make money.” McCarty said. “Otherwise their appetite to do business will go away.”
Crist, who has led the charge to reduce rates, paused when asked about McCarty’s statements.
“We’ll see,” Crist said. “Hopefully most of them don’t.”
‘Looks to me as if this political experiment is about to blow up…
Looks like Alex took Kevin in the back room and had a talk with him. Or Kevin wants to keep his job and has to do a one eighty. Either way, what an embarrassment.
McCarty is finally starting to realize/admit he has been wrong all along. That’s good. Maybe he will be able to keep his job when Crist leaves, but I wouldn’t bet on it. He has already provided a lot of misinformation to the cabinet and legislators and I think a lot of people want to see him out on his butt. Maybe George Lemieux has a job for him…
As far as Crist goes, I think this is another thing that makes him look stupid, which is about right. What about his run for US Senate???
You can only hide from the problem for so long. It’s nice to finally see him admitting the things they did to keep rates artificially low are wrong and are having a negative impact on the consumer.
Government forced rate decreases and overstated wind mitigation discounts being used to control pricing has only lead to deteriorating reserves of companies and less choices for consumers. And we all knew it was NOT in the best interest of the customer but for the benefit of those running for public office.
Let’s hope the truth and reality of the problems they created keep coming to the surface so there can be short and long term solutions that benefit us – the consumers and citizens of Florida!
This is exactly what was expected when the gov’t gets involved. They force companies to lower premiums and when several go bust they wonder how that could happen. This is what will happen when the gov’t gets involved in healthcare too.
So nice that both Kevin and Charlie are waking up to the fact that Florida is a disaster for HO Insurance. Fraud, did you say? No, can’t be! Fraud is the single most expensive bill any insurance company pays today. Let the free market work it out. Besides putting a man on the moon and dropping a bomb on Japan to end WWII, the gov’t has never done anything right!
State Farm uses catastrophe adjusters who come for big events. The argument you give is pointless. State Farm’s greed is bleeding so red it hurts insureds, agents & staff for their brand image.
Most recently they secretly launched an auto rate increase to help offset more losses they are suffering in that line as well.
You need a new agent then, not a new Co. As there are not “thousands” of other companies. There are like ZERO. WHen was the last time you Royal Palm Insurance Co or St Johns, or Edison, or Olympus, or ASI, or Security First, or Safe Harbor, or CPIC pull up with a 1000 claims reps after a storm.
That would be 1000 claims reps to figure out how not to pay the claim. You have to remember Slim this is a pro State Farm choir here. They all talk about free market but it should only apply to State Farm. They all talk about State Farm should make any amount they want without consideration to those it hurts. How about all the wasted money. No one talks about State Farm bringing this upon themselves by over insuring in Florida to begin with. It started with greed by State Farm in South Florida and it is ending with greed by State Farm. State Farm of Florida pays State Farm Mutual for reinsurance and then cries poor. Not that any State Farm flunky will admit anything is wrong with their company or that they ever did anything wrong. Of course State Farm had no hand at all in their current situation right? It’s all the State’s fault. You cannot fix the problem if you cannot admit you are a part of it. State Farm still spends tons of money advertising in Florida when they won’t write anything but auto or financial/health insurance. Another waste of money. You keep wasting it then wanting more. They are the model of greed and poor company management. Don’t give them a dime until they address that issue.
I have had State Farm for a long time and so has most of my family members. And I will tell you I had a Fire claim few years back and they were absolutely amazing with my claim and payment…
I have many friends who have been fighting with Citizens for years now over claims and their rates have always been higher until this year only b/c they dropped sinkhole coverage… I will gladly pay for good insurance…
State Farm has the best claims force and strongest financial backing (reinsurance)in Florida. In 2004, they handled almost 300,000 hurricane claims. They brought claims reps in by the hundreds and employed their “military-like” claims operation to deliver the best claims experience for customers in Florida. I didn’t see other companies able to do that. Argue all you want, but it’s the truth. State Farm has been among the best in the business for years, and that’s why they have grown so much. People are not stupid. If all SF did was mishandle claims and overcharge people, do you think they would have held on to their top ranking across the US since 1944?
Most of the people that bash State Farm never had a policy with them or a claim. Maybe they have some other reasons – founded or unfounded. But, the bottom line is that Florida is better off with State Farm in this market, even if you chose not to buy coverage from them. I will, and so will hundreds of thousands of others.
Al, State Farm uses a small number of Independent adjusters after majors storms, but it’s less than 10%. They have a national cat team that is housed in Jax and then is called out to areas of the country that are hit. I know, I have a very good friend that works in the unit. And that 10% of independent adjusters are supervised my SF management.
“Secretly” launched an auto rate increase, it was filed with the OIR and on their web, how is that secret? Why don’t you slam all the other carriers for their rate increase too.
Per National Underwriter, the vast majority of all carriers that offer HO in 2008 lost money. They all need a rate increase. What do you expect when the government continues to print money!
Funny to read some of these blogs. Premiums are a symptom of the problem in healthcare and homeowners insurance. In order to lower the premium you have to lower the cost of healthcare or homeowners claims. So, Stop changing the name of legislation to reflect your anger at a symptom. Health insurance reform instead of Healthcare reform. or adressing the homeowners insurance without looking at the cause. We have 30 or so carriers who have no money insuring our homes. Hartford, SF Nationwide, Allstate, Auto Owners, Safeco. All have droped their policies and now you get mad at the last one standing. Ha Ha, Fix the problem. Reinsurance, Windstorm exposures, Over bearing regulation.
TO THE UNTOUCHABLES. 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 judgment 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 attorneys 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.
insurance. ”In order to lower the premium you have to lower the cost of CEO….
When there’s a disaster, the companies homeowners count on to protect them from financial ruin routinely pay less than what policies promise. Insurers often pay 30-60 percent of the cost of rebuilding a damaged home–even when carriers assure homeowners they’re fully covered, thousands of complaints with state insurance departments and civil court cases show.
Paying out less to victims of catastrophes has helped produce record profits. In the past 12 years, insurance company net income has soared–even in the wake of Hurricane Katrina, the worst natural disaster in U.S. history. Property- casualty insurers, which cover damage to homes and cars, reported their highest- ever profit of $73 billion last year, up 49 percent from $49 billion in 2005, according to Highline Data LLC, a Cambridge, Massachusetts-based firm that compiles insurance industry data.
The 60 million U.S. homeowners who pay more than $50 billion a year in insurance premiums are often disappointed when they discover insurers won’t pay the full cost of rebuilding their damaged or destroyed homes. Property insurers systematically deny and reduce their policyholders’ claims, according to court records in California, Florida, Illinois, Mississippi, New Hampshire and Tennessee. The insurance companies routinely refuse to pay market prices for homes and replacement contents, they use computer programs to cut payouts, they change policy coverage with no clear explanation, they ignore or alter engineering reports.
record profits. In the past 12 years, insurance company net income has soared–even in the wake of Hurricane Katrina, the worst natural disaster in U.S. history.
It is funny to read so much pro State Farm. I call it as I see it. The majority of you are all employed by or were employed by State Farm. At least a couple of you will at least admit it. Again, State Farm of Florida buys reinsurance from State Farm Mutual. They then go to the OIR and say look how poor I am due to reinsurance expenses. It’s funny how easy it is to see the problem with that. Other reinsurers are global and these Florida companies pay those companies for their reinsurance. Then you want to say State Farm has the same expenses? You are not fooling anyone with that bull. They pay themselves and cry broke. I also find it funny for those who have “had a claim” with State Farm and it was wonderful and no one does better. Really? Prove it. Show me the claims stats for every single company doing business in the USA. Show me how the polls State Farm does are not twisted to their favor. Give me a break. You can bet there are unhappy State Farm clients out there after a claim. I bet there are a few thousand in LA. This is not a discussion when you cannot be unbiased. State Farm over insured here in Florida. They wrote more business than was healthly and now they pay for it. No one commmenting about that huh? Sure they can hire thousands of claims adjusters since they are one of the oldest and richest companies in the industry. You cannot compare small Florida companies to State Farm yet you keep trying to when it is convenient. You want no regulation for State Farm under the free market arguement but yet you only want free market to apply to State Farm. As I said a pro State Farm crowd here. To be fair to this story I would like to see them stay in Florida. I just don’t bow down and worship them as most people here do. They have many issues and problems from poor management to pushing for change that only benefits them. Think how much more money they would have if the company and their agents had not overinsured in Florida. Risk management is not something they were familiar with it seems.
What is funny is the repeat State Farm hater with the same bull over and over. Most of us do not work for SF. Where do you work, a trial lawyers office or the Fl Insurance Commissioner’s office? Your facts and conclusions are as accurate as anonymous internet posting usually are. Troll.
State Farm has history of not releasing records
By Anita Lee
McClatchy Newspapers
Advertisement
BILOXI, Miss. (MCT) — In some cases, State Farm’s top leadership prefers not to share or even keep records that offer insight into how policyholder claims are handled, according to court records.
Chairman and CEO Edward B. Rust Jr. said in sworn testimony earlier this month that no minutes are kept of quarterly meetings held by the company’s top management, the Chairman’s Council, and that policyholders have no right to information about an investigation State Farm Insurance Cos. has ordered of its relationship with Haag Engineering Co.
State Farm spokesman Phil Supple said the company doesn’t “intend to-;try this-;case in the media.”
“State Farm stands by testimony given by President and Vice Chairman Vince Trosino, who said when asked about these allegations, ‘It’s not part of our system. It’s not part of our core values. It’s not what made us the most successful property and casualty insurer, life insurer, in the country.'”
Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports.
Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.
In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.
In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys
“As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”
Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm’s history of destroying and withholding records.
In 1998, Fye wrote in a Florida case
“I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records.”
In some cases, company executives did not keep records.
Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony Sept. 6 from Rust. Topics included Rust’s Chairman’s Council, made up of top State Farm executives. The group, which includes the company’s general counsel, meets quarterly.
Marr was fishing for records of those meetings that he could subpoena for his lawsuit.
“Certainly,” Marr asked Rust, “you keep records of the quarterly meetings where the entire Chairman’s Council is present?”
“We have an agenda,” Rust said, “but minutes in that, no.”
“Why not?” Marr asked.
Rust replied, “Never felt a need to.”
Marr later asked, “Are there any written agendas that are available should I choose to request them in the lawsuit?”
“I’m not sure what might be available,” Rust said.
Rust also said policyholders, who essentially own the private mutual company, are not entitled to know what the Chairman’s Council discusses or decides about litigation against State Farm, citing attorney-client privilege.
Marr questioned why the company would withhold information from policyholders, who own State Farm.
“Well, again,” said Rust (who has a law degree), “I’m not an expert in the area, but I think as you find — even if I’m a shareholder in a publicly traded company, there are things that are not — you know, I do not have access to.”
Marr later asked if policyholders have a right to see documents from State Farm’s investigation of Haag.
They paid every claim I have ever submitted. That’s why I buy insurance.
Did you buy it for the discounts, Slim?
Wow! Has Kevin had a change of heart…or is it more likely that NO ONE can stay in business if they keep losing money.
This outcome is not surprising. Only the very most undereducated among us believe that businesses can continue to provide service while going broke. Much like the health insurance debate, whereby the cost of doing business (health care) is driving higher premiums, so goes property insurance. No amount of ‘insurance baiting’ can change that fact. Don’t like what you pay for insurance, health of home? Complain to your duly elected insurance commissioner. He sets the premiums and policy terms and conditions (that means whats covered and when, for our attorney friends edification).
He’s so busy running from one fundraiser to another, from one special interest group meeting to another, he’s not even a valid governor in most people’s opinion. Yes, old ladies love that charming smile, and young children think he’s cool. Meantime, the rest of us are drowning with the impact of our insurance premiums, assuming we have premiums to pay from a company willing to write coverage, and he IGNORES consumer groups who have REPEATEDLY offered alternative financial solutions, who simply ask that their proposals be vetted. This is a microcosm of issues that go along with living in Florida. I’m ready to get the hell out of here, my state of birth, because our “leadership” as they like to call themselves, are useless and only interest in politics… what’s good for them and them only. Sickening to the core..
From Associated Press Article in NY Times yesterday:
“We clearly have to have companies that are writing homeowners’ insurance in Florida that make money.” McCarty said. “Otherwise their appetite to do business will go away.”
Crist, who has led the charge to reduce rates, paused when asked about McCarty’s statements.
“We’ll see,” Crist said. “Hopefully most of them don’t.”
‘Looks to me as if this political experiment is about to blow up…
Looks like Alex took Kevin in the back room and had a talk with him. Or Kevin wants to keep his job and has to do a one eighty. Either way, what an embarrassment.
McCarty is finally starting to realize/admit he has been wrong all along. That’s good. Maybe he will be able to keep his job when Crist leaves, but I wouldn’t bet on it. He has already provided a lot of misinformation to the cabinet and legislators and I think a lot of people want to see him out on his butt. Maybe George Lemieux has a job for him…
As far as Crist goes, I think this is another thing that makes him look stupid, which is about right. What about his run for US Senate???
We’ll see…
You can only hide from the problem for so long. It’s nice to finally see him admitting the things they did to keep rates artificially low are wrong and are having a negative impact on the consumer.
Government forced rate decreases and overstated wind mitigation discounts being used to control pricing has only lead to deteriorating reserves of companies and less choices for consumers. And we all knew it was NOT in the best interest of the customer but for the benefit of those running for public office.
Let’s hope the truth and reality of the problems they created keep coming to the surface so there can be short and long term solutions that benefit us – the consumers and citizens of Florida!
Kevin’s goose is cooked.. He will be selling furniture at Rooms To Go by February 2011….
This is exactly what was expected when the gov’t gets involved. They force companies to lower premiums and when several go bust they wonder how that could happen. This is what will happen when the gov’t gets involved in healthcare too.
They stripped all the multiline, loyalty credits and building code grades out of my policy.
DUMP THEM CHARLIE!
So nice that both Kevin and Charlie are waking up to the fact that Florida is a disaster for HO Insurance. Fraud, did you say? No, can’t be! Fraud is the single most expensive bill any insurance company pays today. Let the free market work it out. Besides putting a man on the moon and dropping a bomb on Japan to end WWII, the gov’t has never done anything right!
Who cares if they paid your claim?
They have to it is a contract. So do the thousands of other companies. They will shred thousands of policies anyway.
My agent is nothing more than a dying dinosaur.
State Farm uses catastrophe adjusters who come for big events. The argument you give is pointless. State Farm’s greed is bleeding so red it hurts insureds, agents & staff for their brand image.
Most recently they secretly launched an auto rate increase to help offset more losses they are suffering in that line as well.
You need a new agent then, not a new Co. As there are not “thousands” of other companies. There are like ZERO. WHen was the last time you Royal Palm Insurance Co or St Johns, or Edison, or Olympus, or ASI, or Security First, or Safe Harbor, or CPIC pull up with a 1000 claims reps after a storm.
That would be 1000 claims reps to figure out how not to pay the claim. You have to remember Slim this is a pro State Farm choir here. They all talk about free market but it should only apply to State Farm. They all talk about State Farm should make any amount they want without consideration to those it hurts. How about all the wasted money. No one talks about State Farm bringing this upon themselves by over insuring in Florida to begin with. It started with greed by State Farm in South Florida and it is ending with greed by State Farm. State Farm of Florida pays State Farm Mutual for reinsurance and then cries poor. Not that any State Farm flunky will admit anything is wrong with their company or that they ever did anything wrong. Of course State Farm had no hand at all in their current situation right? It’s all the State’s fault. You cannot fix the problem if you cannot admit you are a part of it. State Farm still spends tons of money advertising in Florida when they won’t write anything but auto or financial/health insurance. Another waste of money. You keep wasting it then wanting more. They are the model of greed and poor company management. Don’t give them a dime until they address that issue.
I have had State Farm for a long time and so has most of my family members. And I will tell you I had a Fire claim few years back and they were absolutely amazing with my claim and payment…
I have many friends who have been fighting with Citizens for years now over claims and their rates have always been higher until this year only b/c they dropped sinkhole coverage… I will gladly pay for good insurance…
State Farm has the best claims force and strongest financial backing (reinsurance)in Florida. In 2004, they handled almost 300,000 hurricane claims. They brought claims reps in by the hundreds and employed their “military-like” claims operation to deliver the best claims experience for customers in Florida. I didn’t see other companies able to do that. Argue all you want, but it’s the truth. State Farm has been among the best in the business for years, and that’s why they have grown so much. People are not stupid. If all SF did was mishandle claims and overcharge people, do you think they would have held on to their top ranking across the US since 1944?
Most of the people that bash State Farm never had a policy with them or a claim. Maybe they have some other reasons – founded or unfounded. But, the bottom line is that Florida is better off with State Farm in this market, even if you chose not to buy coverage from them. I will, and so will hundreds of thousands of others.
Al, State Farm uses a small number of Independent adjusters after majors storms, but it’s less than 10%. They have a national cat team that is housed in Jax and then is called out to areas of the country that are hit. I know, I have a very good friend that works in the unit. And that 10% of independent adjusters are supervised my SF management.
“Secretly” launched an auto rate increase, it was filed with the OIR and on their web, how is that secret? Why don’t you slam all the other carriers for their rate increase too.
Per National Underwriter, the vast majority of all carriers that offer HO in 2008 lost money. They all need a rate increase. What do you expect when the government continues to print money!
You are pointless
Funny to read some of these blogs. Premiums are a symptom of the problem in healthcare and homeowners insurance. In order to lower the premium you have to lower the cost of healthcare or homeowners claims. So, Stop changing the name of legislation to reflect your anger at a symptom. Health insurance reform instead of Healthcare reform. or adressing the homeowners insurance without looking at the cause. We have 30 or so carriers who have no money insuring our homes. Hartford, SF Nationwide, Allstate, Auto Owners, Safeco. All have droped their policies and now you get mad at the last one standing. Ha Ha, Fix the problem. Reinsurance, Windstorm exposures, Over bearing regulation.
TO THE UNTOUCHABLES. 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 judgment 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 attorneys 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.
insurance. ”In order to lower the premium you have to lower the cost of CEO….
When there’s a disaster, the companies homeowners count on to protect them from financial ruin routinely pay less than what policies promise. Insurers often pay 30-60 percent of the cost of rebuilding a damaged home–even when carriers assure homeowners they’re fully covered, thousands of complaints with state insurance departments and civil court cases show.
Paying out less to victims of catastrophes has helped produce record profits. In the past 12 years, insurance company net income has soared–even in the wake of Hurricane Katrina, the worst natural disaster in U.S. history. Property- casualty insurers, which cover damage to homes and cars, reported their highest- ever profit of $73 billion last year, up 49 percent from $49 billion in 2005, according to Highline Data LLC, a Cambridge, Massachusetts-based firm that compiles insurance industry data.
The 60 million U.S. homeowners who pay more than $50 billion a year in insurance premiums are often disappointed when they discover insurers won’t pay the full cost of rebuilding their damaged or destroyed homes. Property insurers systematically deny and reduce their policyholders’ claims, according to court records in California, Florida, Illinois, Mississippi, New Hampshire and Tennessee. The insurance companies routinely refuse to pay market prices for homes and replacement contents, they use computer programs to cut payouts, they change policy coverage with no clear explanation, they ignore or alter engineering reports.
I was with SF for 8 years and worked Cat for most of them (100+ days for 3).
After I left the Farm, I opened my own Independent shop and for 18 years worked (cat and non-cat)for a number of carriers, including State Farm.
Without a doubt, SF is the most profesional, competent, skillfully managed claims organization out there.
Without a doubt!
record profits. In the past 12 years, insurance company net income has soared–even in the wake of Hurricane Katrina, the worst natural disaster in U.S. history.
It is funny to read so much pro State Farm. I call it as I see it. The majority of you are all employed by or were employed by State Farm. At least a couple of you will at least admit it. Again, State Farm of Florida buys reinsurance from State Farm Mutual. They then go to the OIR and say look how poor I am due to reinsurance expenses. It’s funny how easy it is to see the problem with that. Other reinsurers are global and these Florida companies pay those companies for their reinsurance. Then you want to say State Farm has the same expenses? You are not fooling anyone with that bull. They pay themselves and cry broke. I also find it funny for those who have “had a claim” with State Farm and it was wonderful and no one does better. Really? Prove it. Show me the claims stats for every single company doing business in the USA. Show me how the polls State Farm does are not twisted to their favor. Give me a break. You can bet there are unhappy State Farm clients out there after a claim. I bet there are a few thousand in LA. This is not a discussion when you cannot be unbiased. State Farm over insured here in Florida. They wrote more business than was healthly and now they pay for it. No one commmenting about that huh? Sure they can hire thousands of claims adjusters since they are one of the oldest and richest companies in the industry. You cannot compare small Florida companies to State Farm yet you keep trying to when it is convenient. You want no regulation for State Farm under the free market arguement but yet you only want free market to apply to State Farm. As I said a pro State Farm crowd here. To be fair to this story I would like to see them stay in Florida. I just don’t bow down and worship them as most people here do. They have many issues and problems from poor management to pushing for change that only benefits them. Think how much more money they would have if the company and their agents had not overinsured in Florida. Risk management is not something they were familiar with it seems.
What is funny is the repeat State Farm hater with the same bull over and over. Most of us do not work for SF. Where do you work, a trial lawyers office or the Fl Insurance Commissioner’s office? Your facts and conclusions are as accurate as anonymous internet posting usually are. Troll.
State Farm has history of not releasing records
By Anita Lee
McClatchy Newspapers
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BILOXI, Miss. (MCT) — In some cases, State Farm’s top leadership prefers not to share or even keep records that offer insight into how policyholder claims are handled, according to court records.
Chairman and CEO Edward B. Rust Jr. said in sworn testimony earlier this month that no minutes are kept of quarterly meetings held by the company’s top management, the Chairman’s Council, and that policyholders have no right to information about an investigation State Farm Insurance Cos. has ordered of its relationship with Haag Engineering Co.
State Farm spokesman Phil Supple said the company doesn’t “intend to-;try this-;case in the media.”
“State Farm stands by testimony given by President and Vice Chairman Vince Trosino, who said when asked about these allegations, ‘It’s not part of our system. It’s not part of our core values. It’s not what made us the most successful property and casualty insurer, life insurer, in the country.'”
Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports.
Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.
In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.
In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys
“As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”
Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm’s history of destroying and withholding records.
In 1998, Fye wrote in a Florida case
“I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records.”
In some cases, company executives did not keep records.
Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony Sept. 6 from Rust. Topics included Rust’s Chairman’s Council, made up of top State Farm executives. The group, which includes the company’s general counsel, meets quarterly.
Marr was fishing for records of those meetings that he could subpoena for his lawsuit.
“Certainly,” Marr asked Rust, “you keep records of the quarterly meetings where the entire Chairman’s Council is present?”
“We have an agenda,” Rust said, “but minutes in that, no.”
“Why not?” Marr asked.
Rust replied, “Never felt a need to.”
Marr later asked, “Are there any written agendas that are available should I choose to request them in the lawsuit?”
“I’m not sure what might be available,” Rust said.
Rust also said policyholders, who essentially own the private mutual company, are not entitled to know what the Chairman’s Council discusses or decides about litigation against State Farm, citing attorney-client privilege.
Marr questioned why the company would withhold information from policyholders, who own State Farm.
“Well, again,” said Rust (who has a law degree), “I’m not an expert in the area, but I think as you find — even if I’m a shareholder in a publicly traded company, there are things that are not — you know, I do not have access to.”
Marr later asked if policyholders have a right to see documents from State Farm’s investigation of Haag.
“No,” Rust said.
“Why not?” Marr asked. “Is it privileged?”
Rust said, “I believe so.”
(c) 2006, The Sun Herald (Biloxi, Miss.).
IS THIS FUNNY nobody important?
Troll