Farmers vows to appeal California court ruling

Farmers Insurance Exchange will appeal a decision by a San Diego Superior Court regarding premium payment plans offered to its customers in California and Nevada.

In September, San Diego County Superior Court Judge Jay M. Bloom ruled that Farmers Group Inc. illegally charged service fees to customers who paid monthly installment. The fee was more than premiums specified in the policies approved by the California Department of Insurance, the court said. Farmers was ordered to pay $115 million to California and Nevada consumers who paid an additional $60 to $95 on their policies because of the installment plan.

Jeff Beyer, senior vice president and chief communications officer, said, “This legal ruling erroneously interprets fees for our billing options as insurance premium payments, which they are not. There was no dispute over the fees charged – the ruling said we had the right information on the wrong piece of paper. We cannot agree with this decision.”

Farmers was named a class action defendant in 2004 as part of a wave of lawsuits nationwide challenging insurance company premium payment options, disclosures and service fees for both life and property and casualty insurers. Other insurance companies are receiving judgments for the same type of lawsuit, according to the company.

The lawsuit did not dispute a fee could be charged for the billing options, nor did it dispute the amount to charge. The only dispute was the location of where the fee is shown, according to Farmers. In the 44 years monthly payment billing options have been offered to Farmers customers in California and Nevada, the company has not shown the billing service fee on the policy declarations page because it is not considered part of the premium.

“We dispute every aspect of today’s ruling,” Beyer said. “We will aggressively challenge this erroneous legal decision.”

Topics California Legislation Agribusiness Nevada