Oklahoma has reached a $25 million settlement with Farmers Insurance over the company’s handling of earthquake claims, state officials say.
Oklahoma Attorney General Mike Hunter and Insurance Commissioner Glen Mulready said an investigation revealed Farmers denied or failed to properly pay approximately 1,000 earthquake claims submitted by Oklahomans who purchased coverage to protect their property.
The company will reopen the claims process and re-evaluate the claims using an independent administrator. Approved claims will be paid pursuant to an individual insured’s policy.
Farmers has said it believes its actions with respect earthquake claims in Oklahoma “are in good faith and correct,” according to an Associated Press report. The company emphasized in a statement that it “has not admitted to any wrongdoing in this settlement, and our decision to settle should not be misconstrued as an admission that we believe any claims were improperly denied,” the AP reported.
The Oklahoma AG’s office said under the agreement, Farmers will make additional payments as needed if damages exceed the agreed upon amount to pay eligible claims.
The terms of the agreement include:
- An earthquake claims review process will be formed to re-examine every eligible claim.
- Farmers will send each eligible insured a written notice that their claim has been re-opened for review and describe the earthquake claims review process.
- If an eligible individual has more than one eligible earthquake claim, all eligible earthquake claims will be re-examined.
- The state and Farmers will mutually agree upon an independent, third-party claim administrator with Oklahoma property claims expertise. Farmers can have no prior or existing relationship with the claim administrator.
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