Funny thing is – when anyone asks for a rate quote, all they want to know is what it costs. Not where the phone people work, not claim settlement provisions, not accident free discounts, not whether my staff all have mortgages or not, not our rating with AM Best or Moodys.
Who is the cheapest.
That is what the average American wants to know. How they have been conditioned.
Why do we pay $50 a barrel for oil from people who hate us? Why don’t we harvest it ourselves and pay US $50 a barrel?
Wouldn’t that be in our best interests too? Harvest it here where we have environmentalists and environmental controls? We have mitigation programs in the event of a spill. Does Venezuala?
Iran? Russia?
NOT!!!!
What would be the least effective and most expensive, highest possibility of oil spill? The way we do it now.
Who is the cheapest;;. Not State Farm.I have read your comments and can say that State farm has a model that works for State Farm,Not – for- the – consumer. American companies were forced to put more money into labor and less into product.
THAT IS BS TELL AGENTS ABOUT LABOR/ PRODUCT WE SELL A CHEAP PRODUCT THAT REALLY COSTS MORE THAN IT SHOULD WHILE IN THE MEAN TIME THE CEOS AND THE SHARE HOLDERS MAKE ALL THE MONEY AND THE CONSUMER PAYS FOR ALL THIS .Bloomington, Illinois-based State Farm Insurance Cos. has cut ties to an Indian company mired in a $1 billion fraud scandal,. I HAVE READ MORE scandal about State Farm in the last 4 years than I CARE to remember .I PRAY THAT ONE DAY ALL RECORDS WILL STOP BEING SEALED IN OUR COURTS TO PROTECT THIS GREED AND THAT SOMEONE WILL CONDUCT THE INVESTIGATION THAT GONZALES WAS SUPPOSED TO DO. MAYBE IT IS TOO LATE. EVERYTHING HAS BEEN SEALED UP NICE AND TIGHT. HOW CONVENIENT!
Thanks for the article. Will add State Farm to the list of companies I will not do business with. State Farm had to hire from India? Insufficient qualified Americans to fill these jobs?
It’s time to start bringing these jobs back to America. With dire economic circumstances in our own country, employees here will do whatever it takes to be employed here.
Sorry for the employees in India, but insurance is not a charity.
Good point Mike. Many companies are “international” and if they do business overseas I could see some using some overseas employees/vendors. I don’t condone it but understand it. However in State Farm’s case I don’t believe they are “international” at all. They need to hire American firms.
I have read your comments and can say that State farm has a model. That model works. Because of rising cost in business they must cut cost where they can to make their model work. If their model works they keep their insurance products very very competitive. If the model doesnt work they pass the cost on to their policy holders. So, premiums go up if they use American labor.
It isnt the companies that use Indian labor that will put America out of business.
It is greed, politicians, and labor itself that will put America out of business. People dont buy American cars anymore because they are cheaply made. American companies were forced to put more money into to labor and less into product.
First, as someone else pointed out, State Farm (being a Mutual) is focused on lowering the cost per policy…and as such, can outsource the talent needed to whom ever they want, to achieve the best cost arrangement possible.
Secondly, what makes anyone think that the brain power in the states is up to the challange ? When State Farm went to network their enterprise (400,000 computers) even Microsoft had to pass on the job, in their words placing 400,000 computers on one network was over their comfort level. Don’t forget that State Farm has the largest Private data network on the earth today. There is only one data system that is larger, that is the one operated by the US Government, owned by you and me.
Lastly, there is soooooo much jealously out there towards State Farm that it comes out as pop shots and snipes over little issues. Get over it, State Farm is the most powerful force in the insurance market and has been for several decades. Everyone in the Auto & Home market follows in there dust and will eagerly eat the scraps that fall from their table. Be grateful that State Farm is the Beacon, lighting the way for all of us, showing all the right way to run as the lead dog.
Good night all.
Rocketman, I agree with most of what you said excepting that Satefarm lights the way and all others follow in their dust. There are so many different forms of coverage that State Farm could have no way to light the entire insurance trail. They are good at what they do and they have proven that over many years of obvious hard work and planning. Their brand in the United States is an icon sure enough.
Now, having said that let me say they are not a company anyone should follow in the past few years because they way they handled their old time good paying customers during the recent hurricane events of the past 4 years is truly a tragedy and should be an embarrassment to State Farm. When you are the big boy you act like a leader, not the way they acted. Might be true and might not, but the fact remains perception is reality.
Milo,
Too much pressure on one event. No one Storm defines any company. Only a long track record does this, and by the way, they have that record. If they were the company that many people framed after katrina, than they would not be the most purchased company, but they are. More people purchase State Farm Auto and Home insurance than any other company. Makes ya think…Now look at it from the other side….Someone get’s their home washed out into the ocean with a storm, does not carry the right coverage, whom do you go after…your home insurance company…and what company does most people have….State Farm. It’s a fight to the finish, what do those people have to loose ?, they have lost everything, their ONLY chance is to try to hang this on there home insurance comapany, but the home policy is not a flood policy, never has and never will be. Ok with that said, State Farm handles 30,000 new claims every day. According to JD Powers, State Farm satisfies people more than any other company of size (not to down Amica, but come on folks, size matters, its easy to please a small number of clients, but try doing that with a company 20 times larger) Ok, 30,000 new claims per day, what if State Farm satisfies 99% of the people, that still leaves 100,000 people (1%) who were not satisfied. Ok, so the 1% sues and drags State Farm’s good name thru the muck, what does this say for the 99% of people that they were take care of in a timely and fair way…..Makes ya think again. Just because people sue State Farm does not mean that they are bad. They should not be embarrased, they should look at the 99% and congradulate their employees on a job well done. State Farm’s peer companies DO NOT rate as high, let’s remember.
Article: State Farm Loses First Federal Katrina Case
Free Case Evaluation
A Louisiana jury recently decided that homeowners who lost everything during Hurricane Katrina were entitled to insurance coverage from State Farm Insurance Company. It was the first federal trial in Louisiana against the insurer.
The case
The plaintiffs in the case were a Louisiana couple whose home was destroyed by wind damage and flooding during Hurricane Katrina in 2005. The couple contacted their State Farm homeowners’ insurance adjuster who inspected what little was left of the home and decided that the damage was primarily caused by wind first, so the couple would be covered.
Unfortunately, another State Farm adjuster visited them two months later, re-inspected their home and denied their claim stating that the damage was caused by flood waters had caused the damage, so they were not covered. Confused, the couple then hired their own adjuster who agreed with the first assessment – that the damage was caused by wind. They sued State Farm for bad faith.
The decision
Although the couple sued State Farm for approximately $2 million, the jury only awarded them about $200,000 plus $150,000 in penalties because State Farm did not adjust their claim as it should have. It may not be a financial landslide for the couple; however, the decision may prompt State Farm to settle other, similar claims quickly or face bad faith insurance lawsuits.
What is bad faith?
Bad faith occurs when an insurer wrongfully denies a valid claim, simply ignores a claim or refuses to pay the full amount of a claim that is rightfully due the policyholder. Insurers will often point to a vague statement in a policy, deny coverage and hope that the policyholder will simply accept their determination and go away.
Lawyers whose practices focus on bad faith insurance litigation know how these insurance companies operate, understand how insurance policies are written and can assist policyholders in collecting policy proceeds that are rightfully theirs.
If your insurance company has acted in bad faith, you can contact an attorney near you for a free consultation by clicking here.
Articles & Information:
Allstate’s Secret Documents Revealed in $1.4B Trial
Insurance Companies May Be Sharing Your Personal Information
Insurance Rescissions: A Damaging Practice
WA State Passes Tough Bad Faith Insurance Referendum
Port of New Orleans Sues Insurer over Unpaid Katrina Claims
Louisiana AG Sues Insurers for Bad Faith over Katrina Claims
Allstate Must Reveal Secret Documents
Teen Dies after CIGNA Refuses To Pay for Transplant
Allstate Paying $25,000 a Day for Not Producing McKinsey Report
California Insurers Will Pay $7.2M for Scamming Seniors
Consumer Legislation May Limit Mandatory Arbitration
Suing HMOs for Denying Care: The Controversy Continues
Texas Mutual Accused of Fraud
$8M Punitive Damages Award against State Farm Upheld
Allstate Suspended From Doing Business in Florida
New Study Accuses Insurers of Overpricing and Underpaying
PacifiCare Faces $1.3 Billion in Penalties for Over 130,000 Violations
California Coming Down On Insurers ‘Like A Ton Of Bricks’
United Health Care: Huge Fines & Scandals
Florida’s Governor Believes Allstate Is Gouging Residents
Mississippi AG Moves Forward With New State Farm Investigation
American Fidelity Ordered To Pay $10M in Punitive Damages
Allianz Life Agrees To $10M Settlement for Deceiving Seniors
NY Attorney General Accuses Nation’s Largest Insurers of Fraud
AIG & General Re Insurance Executives Found Guilty Of Fraud and Conspiracy
Allstate Releases 150,000 McKinsey Documents
Fireman’s Fund Hit With $5.3M Bad Faith Insurance Verdict
Can Insurance Companies Fund and Administer Health & Disability Plans?
Insurer Unum Group Reverses 42% Of Previously Denied Disability Claims
Central United Life Insurance Class Action: Policyholders Have Until June 3rd to Opt Out
Insurer Balance Billing: A Practice That Leaves Policyholders in the Dark
Insurers Ordered To Pay $60M in Bad Faith Disability Claim
Texas Bad Faith Insurance Lawsuit Awards Restaurant $4.2M
Big Insurance Companies Vs. You: Tipping The Scales In Your Favor
Actually, there may be insufficient qualified Americans to fill the computer jobs. Much of the insurance industry, (and most large companies in America and the world) depend very heavily on Mainframe computer systems, and COBOL as a computer language. Unfortunately, the American educational system decided 20+ years ago that COBOL was a dead computer language and stopped teaching it. It is virtually impossible to find an American trained programmer under 40 who knows COBOL. I am the only native born US citizen/programmer on my team at work – all the others were born and trained overseas, although several are now US citizens or in the process of becoming citizens. Despite the fact that there are more Mainframe computers today than ever before, and more COBOL code, US college professors still claim they are obsolete.
Louisiana Attorney General, Charles Foti, is suing insurance industry giants Allstate Insurance Company, State Farm Insurance Company, Lafayette Insurance Company, USAA Casualty Insurance Company, Farmers Insurance Company and Standard Fire Insurance Company, along with several other smaller insurers, for acting in bad faith and conspiring to deceive the victims of Hurricane Katrina by providing lower damage estimates, offering lower claim payments and forcing many homeowners to take them to court.
Violation of Monopolies Act
The petition, recently filed in New Orleans Civil District Court, alleges the insurance companies “participated in an on-going scheme to rig the value of property damage claims paid by insurance companies to their insureds
HOW CONVENIENT!
Comment:
Who is the cheapest;;. Not State Farm.I have read your comments and can say that State farm has a model that works for State Farm,Not – for- the – consumer. American companies were forced to put more money into labor and less into product.
THAT IS BS TELL AGENTS ABOUT LABOR/ PRODUCT WE SELL A CHEAP PRODUCT THAT REALLY COSTS MORE THAN IT SHOULD WHILE IN THE MEAN TIME THE CEOS AND THE SHARE HOLDERS MAKE ALL THE MONEY AND THE CONSUMER PAYS FOR ALL THIS .Bloomington, Illinois-based State Farm Insurance Cos. has cut ties to an Indian company mired in a $1 billion fraud scandal,. I HAVE READ MORE scandal about State Farm in the last 4 years than I CARE to remember .I PRAY THAT ONE DAY ALL RECORDS WILL STOP BEING SEALED IN OUR COURTS TO PROTECT THIS GREED AND THAT SOMEONE WILL CONDUCT THE INVESTIGATION THAT GONZALES WAS SUPPOSED TO DO. MAYBE IT IS TOO LATE. EVERYTHING HAS BEEN SEALED UP NICE AND TIGHT. HOW CONVENIENT
Your assertions that State Farm is all evil all of the time certainly does not jive with any independent analysis. 2nd in auto insurance customer service to Amica, according to JD Powers. Low lapse/cancellation rate. Auto insurance premiums down 5% over the last six years. Oodles of corporate and individual charitable contributions. 85% of State Farm buildings and facilities are energy star rated for reduced energy usage. One of the few mutual companies left in America. One of the biggest life companies in America.
If you don’t like four years of reading bad press about State Farm, then take it up with your local independent (LOL!!) journalist. State Farm has been accused of many things that have later been proven false. Too bad the retractions don’t get the headline that the initial smear campaign does.
When you are the biggest, with the track record of success that State Farm has, you have a target on your back.
All companies need to set an example, just that plain and simple. The auto industry should explain to the public why it costs more to produce in the Untied States, it all begins with trust.
I didn;t say they were the cheapest. I said their model works. Everyone knows that labor cost are the number one cost in business today. Not insurance! I agree with you regarding records and sealed records because , we the public who bails them out, never get to know the entire truth.
As related to labor i was specifically referring to the UAW. If they had any sense at all they would concede as qucikly as possible because the government will never allow things to continue. They make way too much money and have negotiated that amount over the years . It is evident by the lack of quality in the American vehicles that mfg have cut cost where they can which is in product not labor. A diversion of money so to speak. I am not saying the ceos and higher up company people havent been greedy also and they need to be reeled in as well. I for one will never buy another american made automobile until such time i see that the uaw has as much pride in the product they are making as they want me to have. I am positive the American people for the most part feel the same way which is why the foreign companies have gained so muich ground. make something that holds up and doesnt break and doesnt skeak. No excuses.
Thanks Gil Fin. I thought I was the only one who believed that paid posters or lawyers were making these idiotic cut and paste postings. Millions of claims and if they have a couple badly handled claims they have a sexual experience. It seems any idiot can have an opinion on the web.
Monopolize the insurance industry through claims handling? Do you believe in little green men too? THE Insurance industry ONLY BELIEF – IS IN green AS IN MONEY IN MENS POCKETS AND MOST OF THOSE MEN ARE THE BIG WIGS AT THE TOP AND IF YOU DO NOT SEE OR UNDERSTAND THAT THAN YOUR ARE SO ASLEEP THAT NO ONE COULD WAKE YOU UP WITH THE TRUTH IF IT HIT YOU IN THE FACE.
The petition, recently filed in New Orleans Civil District Court, alleges the insurance companies “participated in an on-going scheme to rig the value of property damage claims paid by insurance companies to their insureds” in violation of the Louisiana Monopolies Act. According to a statement by Charles Foti on the Louisiana Attorney General’s website (www.ag.louisiana.gov/):
This alleged scheme gave insurers an unjust advantage over policy holders, which they used before, during and after one of the greatest disasters this country has ever suffered, by reaping huge profits from the misfortunes of persons whom they pledged to protect from the risk of loss. I believe this unjust advantage resulted in the unjust enrichment of themselves to the detriment of the state, policy holders, and commerce in Louisiana.
Reaction to suit mixed
Reaction to Foti’s lawsuit has been mixed. Spokespersons for the insurance industry have said that Foti’s claims are not true and point to the billions of dollars of claim payments that were paid to victims of the hurricane. While many consumer advocate groups have said that they believe that insurance companies may have conspired in order to cut their losses, proving so would be a monumental task. Unfortunately, it will be a task that Foti won’t be able to see through as he recently lost his bid for re-election. It’s still unclear as to what will become of the lawsuit once the new Attorney General takes office.
Now I am supposed to believe that these insurance adversaries have attempted to monopolize the insurance industry through claims handling? Do you believe in little green men too?
Sorry to change the subject, but what does any of this have to do with Indian employees? And the big long list of articles and lawsuits? Well, just because someone brought a lawsuit does not legitimize the claim. The ones I recognized from the list were without merit or frivolous, and at least a few were dismissed. Granted, it makes for an impressive list for those who don’t scratch the surface, but upon examination that list is not relevant.
Don’t you attorneys have some other periodical to impress yourselves with?
I think unforti=unately they cannot because they themselves would be incriminated. The sad thruth is that they depended on Americans sitting by and taking the standard 7% increase on sticker all of these years. When the other mfgs were allowed into the US to sell their cars Americans found out there are good viable optins and guess what? The cars dont break! You dont have to change the steering pump in 7000 miles or anything. I am not saying all american cars are the same , but foreign cars seem to be more appealing, less likely to break. Much more expensive to maintain however they last! The American Car mfgs need to rethink their business model and the UAW does too because if they dont work together to make this happen they will find themselves on the streets! Too bad because America will loose a great home grown industry. What i dont understand is if we all see the handwriting on the wall why doesnt the UAW or GM executives? Maybey they do but greed and old school thinking has them trapped menatlly. I sure hope they wake up because American technology is superior to anyones elses in the world(I still believe that whether true or not). We just have to learn how to use it again and learn how to properly market that technology like our forefathers did after world war 2. Lets hope and pray.
As far as State Farm. I guess anyone can sit in the audience and shoot at any business. I have no doubt all business has skeletons. We are a great country and a mixture of many natinalities which is what makes us great. Lets stand up and be counted again. More of the same wont work anymore because we are no longer a North American economy. We are a global economy and very much connected to each other. Whether State farm did the right thing or not after the Hurricanes is yet to be seen. I certainly can see both sides of the argument. As far as the Indian company they were using, well i am sure they needed the labor and not unionized prices so they sought labor outside of the US where labor was cheaper. Was it the right answer? Hmmmm… Id rather see them use US labor. makes more sense however given the complexity of the enviroment to make money now i am not sure they did the wrong thing. Just did what they thought best to make money for their company. They are the largest and they do have a target on their back. Thats for sure. I think Americans need a much better understanding of insurance and a better eeducation. That is the industries fault for allowing this much time to pass without fully educating the public about what they are really buying and what it covers. Hope all settles down and America can get back to being America, the country we are all proud of or were.
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. WE ALL HAD JUST ABOUT ENOUGH.
by Anita Lee
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.
Shareholders? State Farm is a mutual company and has consistantly paid millions in dividends to its policyholders–even in tough economic times. Of course State Farm makes the press due to its size (larger than the next 3 combined). In nearly every state they remain the most stable and have filed for no or little rate increases while most of the other large companies have consistently filed for dramatic increases. I’ve been a State Farm policyholder for ever and have no reason, after many years to consider any of the “second-tier” carriers. Jealousy is part of the deal when you are on top!
THE PRAYER FOR AMERICA
Comment:
ONE THING STATE FARM FORGETS TO TELL ALL OF YOU IS THAT IN FLORIDA WHEN THE WIND HIT HOMES PEOPLE WERE COVERED, BUT STATE FARM JUST DECIDED IT WAS ALL WATER SO NO CLAIMS WERE PAID. THEN THEY CRIED TO THE GOVERNMENT TO COVER ALL FLOODS AND HAVE PASSED LAWS SO THE GOVERNMENT WILL COVER WIND DAMAGE AS WELL. I SAY IF YOU TAKE ALL THE BILLONS IN PREMIUM AND THEN CONVENIENTLY DO NOT COVER ANYTHING—WHAT A RACKET. STATE FARM MUST STOP HIDING THE TRUTH BY SEALING RECORDS IN OUR COURT ROOMS. THIS BIG GIANT HAS SCREWED THE AMERICAN PEOPLE FOR TO DARN LONG. WE SAY PLEASE LEAVE ALL 50 STATES MY GOOD NEIGHBOR, AND TAKE YOUR BS COMMERCIAL OFF THE AIR. I THINK ITS HIGH TIME THE ETHICS BOARD OPENED UP THEIR EYES AND TAKE A CLOSE LOOK AT STATE FARM AND ANY INDUSTRY THAT CAN RAPE PEOPLE AT THE LOWEST TIMES OF THERE LIFE AND THE LITTLE JUNIOR OF A CEO ED RUST WHO HAS TAKEN A GREAT COMPANY THAT HIS GREAT GRANDFATHER STARTED AND TURNED IT INTO HIS LITTLE BANK. WAKE UP PEOPLE AND LOOK AT THE HISTORY. I DID NOT MAKE IT UP. I WISH THAT I DID NOT KNOW THE TRUTH, BUT I DO SO I AM TRYING TO TELL YOU. I HOPE WITH ALL HOPE AND THE LOVE OF THIS GREAT AMERICA SOMEONE ELSE MAY CARE.
— Allstate is the nation’s worst insurance company for consumers, an association of lawyers who sue big business concludes in a report released Wednesday.
“The rankings show a distinct pattern of insurance industry greed amongst 10 companies that refuse to pay just claims, employ hardball tactics against policyholders, reward executives with extravagant salaries, and raise premiums while hoarding excessive profits,” the American Association for Justice concludes.
Researchers spent six months compiling information from court documents, SEC and FBI records, state insurance department investigations and complaints, nationwide news accounts, and testimony of former insurance agents and adjusters.
“We’re not surprised we’re being targeted by the trial and personal injury lawyers because Allstate has been at the forefront of the fight against insurance fraud and the effort to resist unreasonable demands made by lawyers,” Allstate spokesman Michael Siemienas said Wednesday.
“If trial lawyers and personal injury lawyers don’t like Allstate, the facts show that consumers do.”
The AAJ says the U.S. insurance industry collects more than $1 trillion in premiums annually, and has $3.8 trillion in assets, surpassing the Gross Domestic Products of all countries but the United States and Japan.
Robert Hartwig of the industry-sponsored Insurance Information Institute said consumers should consider the source: litigious attorneys who help drive up insurance costs. He also said the industry has paid out nearly $300 billion to tens of millions of policyholders across the country over the past 20 years.
The top 5 offenders on the list:
1. ALLSTATE – CEO, Thomas Wilson; 2007 compensation, $10.7 million; 2007 profits, $4.6 billion; assets: $156.4 billion. “According to investigations and documents Allstate was forced to make public, the company systematically placed profits over its own policyholders… The amount Allstate paid in claims dropped from 79 percent of its premium income in 1996 to just 58 percent 10 years later. In auto claims, payouts dropped from 63 percent to just 47 percent.
2. UNUM – CEO, Thomas Watjen; 2007 compensation, $7.3 million; 2007 profits, $679 million; assets, $52.4 billion. “Unum, one of the nation’s leading disability insurers, has long had a reputation for unfairly denying and delaying claims..”
3. AIG – CEO, Robert Willumstad; 2007 compensation for former CEO, 14.3 million; 2007 profits: $6.2 billion; assets, $1.06 trillion; “AIG executives have also come under fire for opportunistically seeking price increases during catastrophes. Now the company has been labeled ‘the new Enron’ because of charges of multibillion-dollar corporate fraud.”
4. STATE FARM – CEO: Edward B. Rust Jr.; 2007 compensation, $11.7 million; 2007 profits: $5.5 billion; assets, $181.4 billion. “In many cases, the company has gone to extreme lengths to avoid paying claims, including forging signatures on earthquake waivers after the deadly Northridge earthquake, and altering engineering reports regarding damage after Hurricane Katrina.”
5. CONSECO – CEO, C. James Prieur; 2007 compensation: $2.6 million; 2007 profits: $179.9 million; assets: $33.5 billion. “Conseco sells long-term-care policies, typically to the elderly. Unfortunately, Conseco uses the deteriorating health of its policyholders to its advantage because the company knows if it waits long enough to pay out claims, its customers will die.”
Funny thing is – when anyone asks for a rate quote, all they want to know is what it costs. Not where the phone people work, not claim settlement provisions, not accident free discounts, not whether my staff all have mortgages or not, not our rating with AM Best or Moodys.
Who is the cheapest.
That is what the average American wants to know. How they have been conditioned.
Why do we pay $50 a barrel for oil from people who hate us? Why don’t we harvest it ourselves and pay US $50 a barrel?
Wouldn’t that be in our best interests too? Harvest it here where we have environmentalists and environmental controls? We have mitigation programs in the event of a spill. Does Venezuala?
Iran? Russia?
NOT!!!!
What would be the least effective and most expensive, highest possibility of oil spill? The way we do it now.
Who is the cheapest;;. Not State Farm.I have read your comments and can say that State farm has a model that works for State Farm,Not – for- the – consumer. American companies were forced to put more money into labor and less into product.
THAT IS BS TELL AGENTS ABOUT LABOR/ PRODUCT WE SELL A CHEAP PRODUCT THAT REALLY COSTS MORE THAN IT SHOULD WHILE IN THE MEAN TIME THE CEOS AND THE SHARE HOLDERS MAKE ALL THE MONEY AND THE CONSUMER PAYS FOR ALL THIS .Bloomington, Illinois-based State Farm Insurance Cos. has cut ties to an Indian company mired in a $1 billion fraud scandal,. I HAVE READ MORE scandal about State Farm in the last 4 years than I CARE to remember .I PRAY THAT ONE DAY ALL RECORDS WILL STOP BEING SEALED IN OUR COURTS TO PROTECT THIS GREED AND THAT SOMEONE WILL CONDUCT THE INVESTIGATION THAT GONZALES WAS SUPPOSED TO DO. MAYBE IT IS TOO LATE. EVERYTHING HAS BEEN SEALED UP NICE AND TIGHT. HOW CONVENIENT!
Thanks for the article. Will add State Farm to the list of companies I will not do business with. State Farm had to hire from India? Insufficient qualified Americans to fill these jobs?
Cheaper anything means foreign labor; Let’s buy American for a bit more cost but more jobs and a stronger economy!
Tell those who you buy from that you want them to use American labor and get American made products!
It’s time to start bringing these jobs back to America. With dire economic circumstances in our own country, employees here will do whatever it takes to be employed here.
Sorry for the employees in India, but insurance is not a charity.
All these companies are multi-international companies, theres no such thing as an American company.
Corporations are heartless, and not the least bit patriotic.
Good point Mike. Many companies are “international” and if they do business overseas I could see some using some overseas employees/vendors. I don’t condone it but understand it. However in State Farm’s case I don’t believe they are “international” at all. They need to hire American firms.
I dont know, unless its in their mission statment they have no obligation to the USA. Only to its stock holders or policy holders.
Its unfortunate. Thats why govt needs to regulate these companies before they destroy our country.
I have read your comments and can say that State farm has a model. That model works. Because of rising cost in business they must cut cost where they can to make their model work. If their model works they keep their insurance products very very competitive. If the model doesnt work they pass the cost on to their policy holders. So, premiums go up if they use American labor.
It isnt the companies that use Indian labor that will put America out of business.
It is greed, politicians, and labor itself that will put America out of business. People dont buy American cars anymore because they are cheaply made. American companies were forced to put more money into to labor and less into product.
Hello, is there intelligent life on this thread ?
First, as someone else pointed out, State Farm (being a Mutual) is focused on lowering the cost per policy…and as such, can outsource the talent needed to whom ever they want, to achieve the best cost arrangement possible.
Secondly, what makes anyone think that the brain power in the states is up to the challange ? When State Farm went to network their enterprise (400,000 computers) even Microsoft had to pass on the job, in their words placing 400,000 computers on one network was over their comfort level. Don’t forget that State Farm has the largest Private data network on the earth today. There is only one data system that is larger, that is the one operated by the US Government, owned by you and me.
Lastly, there is soooooo much jealously out there towards State Farm that it comes out as pop shots and snipes over little issues. Get over it, State Farm is the most powerful force in the insurance market and has been for several decades. Everyone in the Auto & Home market follows in there dust and will eagerly eat the scraps that fall from their table. Be grateful that State Farm is the Beacon, lighting the way for all of us, showing all the right way to run as the lead dog.
Good night all.
Rocketman
Rocketman, I agree with most of what you said excepting that Satefarm lights the way and all others follow in their dust. There are so many different forms of coverage that State Farm could have no way to light the entire insurance trail. They are good at what they do and they have proven that over many years of obvious hard work and planning. Their brand in the United States is an icon sure enough.
Now, having said that let me say they are not a company anyone should follow in the past few years because they way they handled their old time good paying customers during the recent hurricane events of the past 4 years is truly a tragedy and should be an embarrassment to State Farm. When you are the big boy you act like a leader, not the way they acted. Might be true and might not, but the fact remains perception is reality.
Milo,
Too much pressure on one event. No one Storm defines any company. Only a long track record does this, and by the way, they have that record. If they were the company that many people framed after katrina, than they would not be the most purchased company, but they are. More people purchase State Farm Auto and Home insurance than any other company. Makes ya think…Now look at it from the other side….Someone get’s their home washed out into the ocean with a storm, does not carry the right coverage, whom do you go after…your home insurance company…and what company does most people have….State Farm. It’s a fight to the finish, what do those people have to loose ?, they have lost everything, their ONLY chance is to try to hang this on there home insurance comapany, but the home policy is not a flood policy, never has and never will be. Ok with that said, State Farm handles 30,000 new claims every day. According to JD Powers, State Farm satisfies people more than any other company of size (not to down Amica, but come on folks, size matters, its easy to please a small number of clients, but try doing that with a company 20 times larger) Ok, 30,000 new claims per day, what if State Farm satisfies 99% of the people, that still leaves 100,000 people (1%) who were not satisfied. Ok, so the 1% sues and drags State Farm’s good name thru the muck, what does this say for the 99% of people that they were take care of in a timely and fair way…..Makes ya think again. Just because people sue State Farm does not mean that they are bad. They should not be embarrased, they should look at the 99% and congradulate their employees on a job well done. State Farm’s peer companies DO NOT rate as high, let’s remember.
Good Nite
Rocketman
30,000 claims per day times 365 days per year times 1% =
365 days per year 109,000 claims where people were not satisified.
Article: State Farm Loses First Federal Katrina Case
Free Case Evaluation
A Louisiana jury recently decided that homeowners who lost everything during Hurricane Katrina were entitled to insurance coverage from State Farm Insurance Company. It was the first federal trial in Louisiana against the insurer.
The case
The plaintiffs in the case were a Louisiana couple whose home was destroyed by wind damage and flooding during Hurricane Katrina in 2005. The couple contacted their State Farm homeowners’ insurance adjuster who inspected what little was left of the home and decided that the damage was primarily caused by wind first, so the couple would be covered.
Unfortunately, another State Farm adjuster visited them two months later, re-inspected their home and denied their claim stating that the damage was caused by flood waters had caused the damage, so they were not covered. Confused, the couple then hired their own adjuster who agreed with the first assessment – that the damage was caused by wind. They sued State Farm for bad faith.
The decision
Although the couple sued State Farm for approximately $2 million, the jury only awarded them about $200,000 plus $150,000 in penalties because State Farm did not adjust their claim as it should have. It may not be a financial landslide for the couple; however, the decision may prompt State Farm to settle other, similar claims quickly or face bad faith insurance lawsuits.
What is bad faith?
Bad faith occurs when an insurer wrongfully denies a valid claim, simply ignores a claim or refuses to pay the full amount of a claim that is rightfully due the policyholder. Insurers will often point to a vague statement in a policy, deny coverage and hope that the policyholder will simply accept their determination and go away.
Lawyers whose practices focus on bad faith insurance litigation know how these insurance companies operate, understand how insurance policies are written and can assist policyholders in collecting policy proceeds that are rightfully theirs.
If your insurance company has acted in bad faith, you can contact an attorney near you for a free consultation by clicking here.
Articles & Information:
Allstate’s Secret Documents Revealed in $1.4B Trial
Insurance Companies May Be Sharing Your Personal Information
Insurance Rescissions: A Damaging Practice
WA State Passes Tough Bad Faith Insurance Referendum
Port of New Orleans Sues Insurer over Unpaid Katrina Claims
Louisiana AG Sues Insurers for Bad Faith over Katrina Claims
Allstate Must Reveal Secret Documents
Teen Dies after CIGNA Refuses To Pay for Transplant
Allstate Paying $25,000 a Day for Not Producing McKinsey Report
California Insurers Will Pay $7.2M for Scamming Seniors
Consumer Legislation May Limit Mandatory Arbitration
Suing HMOs for Denying Care: The Controversy Continues
Texas Mutual Accused of Fraud
$8M Punitive Damages Award against State Farm Upheld
Allstate Suspended From Doing Business in Florida
New Study Accuses Insurers of Overpricing and Underpaying
PacifiCare Faces $1.3 Billion in Penalties for Over 130,000 Violations
California Coming Down On Insurers ‘Like A Ton Of Bricks’
United Health Care: Huge Fines & Scandals
Florida’s Governor Believes Allstate Is Gouging Residents
Mississippi AG Moves Forward With New State Farm Investigation
American Fidelity Ordered To Pay $10M in Punitive Damages
Allianz Life Agrees To $10M Settlement for Deceiving Seniors
NY Attorney General Accuses Nation’s Largest Insurers of Fraud
AIG & General Re Insurance Executives Found Guilty Of Fraud and Conspiracy
Allstate Releases 150,000 McKinsey Documents
Fireman’s Fund Hit With $5.3M Bad Faith Insurance Verdict
Can Insurance Companies Fund and Administer Health & Disability Plans?
Insurer Unum Group Reverses 42% Of Previously Denied Disability Claims
Central United Life Insurance Class Action: Policyholders Have Until June 3rd to Opt Out
Insurer Balance Billing: A Practice That Leaves Policyholders in the Dark
Insurers Ordered To Pay $60M in Bad Faith Disability Claim
Texas Bad Faith Insurance Lawsuit Awards Restaurant $4.2M
Big Insurance Companies Vs. You: Tipping The Scales In Your Favor
Insurance Company’s Bad Faith Tactics:
Actually, there may be insufficient qualified Americans to fill the computer jobs. Much of the insurance industry, (and most large companies in America and the world) depend very heavily on Mainframe computer systems, and COBOL as a computer language. Unfortunately, the American educational system decided 20+ years ago that COBOL was a dead computer language and stopped teaching it. It is virtually impossible to find an American trained programmer under 40 who knows COBOL. I am the only native born US citizen/programmer on my team at work – all the others were born and trained overseas, although several are now US citizens or in the process of becoming citizens. Despite the fact that there are more Mainframe computers today than ever before, and more COBOL code, US college professors still claim they are obsolete.
Louisiana Attorney General, Charles Foti, is suing insurance industry giants Allstate Insurance Company, State Farm Insurance Company, Lafayette Insurance Company, USAA Casualty Insurance Company, Farmers Insurance Company and Standard Fire Insurance Company, along with several other smaller insurers, for acting in bad faith and conspiring to deceive the victims of Hurricane Katrina by providing lower damage estimates, offering lower claim payments and forcing many homeowners to take them to court.
Violation of Monopolies Act
The petition, recently filed in New Orleans Civil District Court, alleges the insurance companies “participated in an on-going scheme to rig the value of property damage claims paid by insurance companies to their insureds
HOW CONVENIENT!
Comment:
Who is the cheapest;;. Not State Farm.I have read your comments and can say that State farm has a model that works for State Farm,Not – for- the – consumer. American companies were forced to put more money into labor and less into product.
THAT IS BS TELL AGENTS ABOUT LABOR/ PRODUCT WE SELL A CHEAP PRODUCT THAT REALLY COSTS MORE THAN IT SHOULD WHILE IN THE MEAN TIME THE CEOS AND THE SHARE HOLDERS MAKE ALL THE MONEY AND THE CONSUMER PAYS FOR ALL THIS .Bloomington, Illinois-based State Farm Insurance Cos. has cut ties to an Indian company mired in a $1 billion fraud scandal,. I HAVE READ MORE scandal about State Farm in the last 4 years than I CARE to remember .I PRAY THAT ONE DAY ALL RECORDS WILL STOP BEING SEALED IN OUR COURTS TO PROTECT THIS GREED AND THAT SOMEONE WILL CONDUCT THE INVESTIGATION THAT GONZALES WAS SUPPOSED TO DO. MAYBE IT IS TOO LATE. EVERYTHING HAS BEEN SEALED UP NICE AND TIGHT. HOW CONVENIENT
Your assertions that State Farm is all evil all of the time certainly does not jive with any independent analysis. 2nd in auto insurance customer service to Amica, according to JD Powers. Low lapse/cancellation rate. Auto insurance premiums down 5% over the last six years. Oodles of corporate and individual charitable contributions. 85% of State Farm buildings and facilities are energy star rated for reduced energy usage. One of the few mutual companies left in America. One of the biggest life companies in America.
If you don’t like four years of reading bad press about State Farm, then take it up with your local independent (LOL!!) journalist. State Farm has been accused of many things that have later been proven false. Too bad the retractions don’t get the headline that the initial smear campaign does.
When you are the biggest, with the track record of success that State Farm has, you have a target on your back.
All companies need to set an example, just that plain and simple. The auto industry should explain to the public why it costs more to produce in the Untied States, it all begins with trust.
I didn;t say they were the cheapest. I said their model works. Everyone knows that labor cost are the number one cost in business today. Not insurance! I agree with you regarding records and sealed records because , we the public who bails them out, never get to know the entire truth.
As related to labor i was specifically referring to the UAW. If they had any sense at all they would concede as qucikly as possible because the government will never allow things to continue. They make way too much money and have negotiated that amount over the years . It is evident by the lack of quality in the American vehicles that mfg have cut cost where they can which is in product not labor. A diversion of money so to speak. I am not saying the ceos and higher up company people havent been greedy also and they need to be reeled in as well. I for one will never buy another american made automobile until such time i see that the uaw has as much pride in the product they are making as they want me to have. I am positive the American people for the most part feel the same way which is why the foreign companies have gained so muich ground. make something that holds up and doesnt break and doesnt skeak. No excuses.
Thanks Gil Fin. I thought I was the only one who believed that paid posters or lawyers were making these idiotic cut and paste postings. Millions of claims and if they have a couple badly handled claims they have a sexual experience. It seems any idiot can have an opinion on the web.
Monopolize the insurance industry through claims handling? Do you believe in little green men too? THE Insurance industry ONLY BELIEF – IS IN green AS IN MONEY IN MENS POCKETS AND MOST OF THOSE MEN ARE THE BIG WIGS AT THE TOP AND IF YOU DO NOT SEE OR UNDERSTAND THAT THAN YOUR ARE SO ASLEEP THAT NO ONE COULD WAKE YOU UP WITH THE TRUTH IF IT HIT YOU IN THE FACE.
Violation of Monopolies Act
The petition, recently filed in New Orleans Civil District Court, alleges the insurance companies “participated in an on-going scheme to rig the value of property damage claims paid by insurance companies to their insureds” in violation of the Louisiana Monopolies Act. According to a statement by Charles Foti on the Louisiana Attorney General’s website (www.ag.louisiana.gov/):
This alleged scheme gave insurers an unjust advantage over policy holders, which they used before, during and after one of the greatest disasters this country has ever suffered, by reaping huge profits from the misfortunes of persons whom they pledged to protect from the risk of loss. I believe this unjust advantage resulted in the unjust enrichment of themselves to the detriment of the state, policy holders, and commerce in Louisiana.
Reaction to suit mixed
Reaction to Foti’s lawsuit has been mixed. Spokespersons for the insurance industry have said that Foti’s claims are not true and point to the billions of dollars of claim payments that were paid to victims of the hurricane. While many consumer advocate groups have said that they believe that insurance companies may have conspired in order to cut their losses, proving so would be a monumental task. Unfortunately, it will be a task that Foti won’t be able to see through as he recently lost his bid for re-election. It’s still unclear as to what will become of the lawsuit once the new Attorney General takes office.
To view a copy of the complaint, see http://www.ag.louisiana.gov/LastestNews/Petition%20date%20stamp.pdf.
violation of the Louisiana Monopolies Act.
this country has ever suffered, by reaping huge profits from the misfortunes of persons whom they pledged to protect from the risk of loss.
he recently lost his bid for re-election.
http://www.clarionledger.com/assets/pdf/D069388410.PDF Well, just because someone brought a lawsuit does not legitimize the claim.but what does any of this have to do with Indian employees? Its all call greed.
Now I am supposed to believe that these insurance adversaries have attempted to monopolize the insurance industry through claims handling? Do you believe in little green men too?
Sorry to change the subject, but what does any of this have to do with Indian employees? And the big long list of articles and lawsuits? Well, just because someone brought a lawsuit does not legitimize the claim. The ones I recognized from the list were without merit or frivolous, and at least a few were dismissed. Granted, it makes for an impressive list for those who don’t scratch the surface, but upon examination that list is not relevant.
Don’t you attorneys have some other periodical to impress yourselves with?
I think unforti=unately they cannot because they themselves would be incriminated. The sad thruth is that they depended on Americans sitting by and taking the standard 7% increase on sticker all of these years. When the other mfgs were allowed into the US to sell their cars Americans found out there are good viable optins and guess what? The cars dont break! You dont have to change the steering pump in 7000 miles or anything. I am not saying all american cars are the same , but foreign cars seem to be more appealing, less likely to break. Much more expensive to maintain however they last! The American Car mfgs need to rethink their business model and the UAW does too because if they dont work together to make this happen they will find themselves on the streets! Too bad because America will loose a great home grown industry. What i dont understand is if we all see the handwriting on the wall why doesnt the UAW or GM executives? Maybey they do but greed and old school thinking has them trapped menatlly. I sure hope they wake up because American technology is superior to anyones elses in the world(I still believe that whether true or not). We just have to learn how to use it again and learn how to properly market that technology like our forefathers did after world war 2. Lets hope and pray.
As far as State Farm. I guess anyone can sit in the audience and shoot at any business. I have no doubt all business has skeletons. We are a great country and a mixture of many natinalities which is what makes us great. Lets stand up and be counted again. More of the same wont work anymore because we are no longer a North American economy. We are a global economy and very much connected to each other. Whether State farm did the right thing or not after the Hurricanes is yet to be seen. I certainly can see both sides of the argument. As far as the Indian company they were using, well i am sure they needed the labor and not unionized prices so they sought labor outside of the US where labor was cheaper. Was it the right answer? Hmmmm… Id rather see them use US labor. makes more sense however given the complexity of the enviroment to make money now i am not sure they did the wrong thing. Just did what they thought best to make money for their company. They are the largest and they do have a target on their back. Thats for sure. I think Americans need a much better understanding of insurance and a better eeducation. That is the industries fault for allowing this much time to pass without fully educating the public about what they are really buying and what it covers. Hope all settles down and America can get back to being America, the country we are all proud of or were.
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. WE ALL HAD JUST ABOUT ENOUGH.
Human progress never rolls in
on wheels of inevitability; it comes through
the tireless efforts of men and women
willing to be co-workers with God.
Martin Luther King, Jr.
“Letter from the Birmingham Jail”
by Anita Lee
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.”
The Sun Herald (Biloxi, Miss.).
Shareholders? State Farm is a mutual company and has consistantly paid millions in dividends to its policyholders–even in tough economic times. Of course State Farm makes the press due to its size (larger than the next 3 combined). In nearly every state they remain the most stable and have filed for no or little rate increases while most of the other large companies have consistently filed for dramatic increases. I’ve been a State Farm policyholder for ever and have no reason, after many years to consider any of the “second-tier” carriers. Jealousy is part of the deal when you are on top!
THE PRAYER FOR AMERICA
Comment:
ONE THING STATE FARM FORGETS TO TELL ALL OF YOU IS THAT IN FLORIDA WHEN THE WIND HIT HOMES PEOPLE WERE COVERED, BUT STATE FARM JUST DECIDED IT WAS ALL WATER SO NO CLAIMS WERE PAID. THEN THEY CRIED TO THE GOVERNMENT TO COVER ALL FLOODS AND HAVE PASSED LAWS SO THE GOVERNMENT WILL COVER WIND DAMAGE AS WELL. I SAY IF YOU TAKE ALL THE BILLONS IN PREMIUM AND THEN CONVENIENTLY DO NOT COVER ANYTHING—WHAT A RACKET. STATE FARM MUST STOP HIDING THE TRUTH BY SEALING RECORDS IN OUR COURT ROOMS. THIS BIG GIANT HAS SCREWED THE AMERICAN PEOPLE FOR TO DARN LONG. WE SAY PLEASE LEAVE ALL 50 STATES MY GOOD NEIGHBOR, AND TAKE YOUR BS COMMERCIAL OFF THE AIR. I THINK ITS HIGH TIME THE ETHICS BOARD OPENED UP THEIR EYES AND TAKE A CLOSE LOOK AT STATE FARM AND ANY INDUSTRY THAT CAN RAPE PEOPLE AT THE LOWEST TIMES OF THERE LIFE AND THE LITTLE JUNIOR OF A CEO ED RUST WHO HAS TAKEN A GREAT COMPANY THAT HIS GREAT GRANDFATHER STARTED AND TURNED IT INTO HIS LITTLE BANK. WAKE UP PEOPLE AND LOOK AT THE HISTORY. I DID NOT MAKE IT UP. I WISH THAT I DID NOT KNOW THE TRUTH, BUT I DO SO I AM TRYING TO TELL YOU. I HOPE WITH ALL HOPE AND THE LOVE OF THIS GREAT AMERICA SOMEONE ELSE MAY CARE.
Study reveals worst insurers
By ANITA LEE
— Allstate is the nation’s worst insurance company for consumers, an association of lawyers who sue big business concludes in a report released Wednesday.
“The rankings show a distinct pattern of insurance industry greed amongst 10 companies that refuse to pay just claims, employ hardball tactics against policyholders, reward executives with extravagant salaries, and raise premiums while hoarding excessive profits,” the American Association for Justice concludes.
Researchers spent six months compiling information from court documents, SEC and FBI records, state insurance department investigations and complaints, nationwide news accounts, and testimony of former insurance agents and adjusters.
“We’re not surprised we’re being targeted by the trial and personal injury lawyers because Allstate has been at the forefront of the fight against insurance fraud and the effort to resist unreasonable demands made by lawyers,” Allstate spokesman Michael Siemienas said Wednesday.
“If trial lawyers and personal injury lawyers don’t like Allstate, the facts show that consumers do.”
The AAJ says the U.S. insurance industry collects more than $1 trillion in premiums annually, and has $3.8 trillion in assets, surpassing the Gross Domestic Products of all countries but the United States and Japan.
Robert Hartwig of the industry-sponsored Insurance Information Institute said consumers should consider the source: litigious attorneys who help drive up insurance costs. He also said the industry has paid out nearly $300 billion to tens of millions of policyholders across the country over the past 20 years.
The top 5 offenders on the list:
1. ALLSTATE – CEO, Thomas Wilson; 2007 compensation, $10.7 million; 2007 profits, $4.6 billion; assets: $156.4 billion. “According to investigations and documents Allstate was forced to make public, the company systematically placed profits over its own policyholders… The amount Allstate paid in claims dropped from 79 percent of its premium income in 1996 to just 58 percent 10 years later. In auto claims, payouts dropped from 63 percent to just 47 percent.
2. UNUM – CEO, Thomas Watjen; 2007 compensation, $7.3 million; 2007 profits, $679 million; assets, $52.4 billion. “Unum, one of the nation’s leading disability insurers, has long had a reputation for unfairly denying and delaying claims..”
3. AIG – CEO, Robert Willumstad; 2007 compensation for former CEO, 14.3 million; 2007 profits: $6.2 billion; assets, $1.06 trillion; “AIG executives have also come under fire for opportunistically seeking price increases during catastrophes. Now the company has been labeled ‘the new Enron’ because of charges of multibillion-dollar corporate fraud.”
4. STATE FARM – CEO: Edward B. Rust Jr.; 2007 compensation, $11.7 million; 2007 profits: $5.5 billion; assets, $181.4 billion. “In many cases, the company has gone to extreme lengths to avoid paying claims, including forging signatures on earthquake waivers after the deadly Northridge earthquake, and altering engineering reports regarding damage after Hurricane Katrina.”
5. CONSECO – CEO, C. James Prieur; 2007 compensation: $2.6 million; 2007 profits: $179.9 million; assets: $33.5 billion. “Conseco sells long-term-care policies, typically to the elderly. Unfortunately, Conseco uses the deteriorating health of its policyholders to its advantage because the company knows if it waits long enough to pay out claims, its customers will die.”