Jury Finds State Farm Defrauded Flood Insurance Program

April 10, 2013

  • April 10, 2013 at 5:18 pm
    Erma Jay (@galleryshops) says:
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    Nothing like a natural disaster to bring out the sleaze bags.

  • April 10, 2013 at 6:05 pm
    Doubting Thomas says:
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    Like a good neighbor, State Farm is ……I guess not.

  • April 11, 2013 at 12:12 am
    Mark says:
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    This doesn’t surprise me. It’s no wonder they dumped their flood insurance policies into NFIP Direct. They couldn’t figure out how to properly underwrite and adjust flood claims to save their lives. I have had so many State Farm customers walk into my agency with so much bad information about their flood coverage from their agent it’s not even funny.

  • April 12, 2013 at 12:44 pm
    Ranger says:
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    I do not know what happened in Mississippi however I worked State Farm Katrina claims in Louisiana and as a 40 year adjuster I do not see how State Farm could have been any fairer in paying their claims.

  • April 12, 2013 at 8:51 pm
    Jose A. Nunez, All Lines Adjuster says:
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    This is the complaint that I submitted to Against State Farm under the False Claims Act on a investigation that I conducted finding State Farms Miami, florida adjusters acting in an unethical manner and in Bad Faith. I have documented proof of my investigation. My complaint letter was submitted to the Florida Attorney Generals office, as well as to senator Thrasher, Congresswoman Dana D. Young in Tampa, FL, and to congressman Diaz Balart in Miami, Florida. I am awaiting for their reply.
    March 18, 2013
    Honorable Senator John Thrasher
    113 Nature Walk Parkway, Suite 106
    St. Augustine, Florida 32092
    Dear Senator Thrasher.
    I am an All lines insurance adjuster, and I am not reporting this complaint to the Department of Financial Services ( Insurance Commissioner’s office ) because in my ( 32 ) year of experience dealing with the DFS, I have noticed that they allowed the insurance companies to get away with an slap in the wrist when they commit some wrong doings. Therefore, I am making this complaint under the False Claims Act (SB 1494, HB 935 ) on behalf of my girlfriend Margarita Salomon due to a fraudulent act which State Farm attempted to commit on her property damage claim number 59-A701-745, when the State Farm adjusters attempted to conceal the truth about the facts of the accident and due to the fact that I conducted the accident investigation and the fact that I that I managed to convinced the collision adjusters to conduct their own investigation, in which as a result, I was vindicated and the property damage adjusters were exposed by their own co-workers ( Margarita was involved in the accident with an honest person insured by State Farm as well, so, god was on my side ) furthermore, I submitted photos and a captioned report to State Farm under claim number 59-A701-745 and to the DFS and one week following the receipt of my complaint they decided to pay 100% of the property damage, not because I submitted the complaint to the DFS, but because the collision department followed my instructions regarding the question that they had to ask the adverse driver and as a result, I was vindicated, and they exposed the PD adjusters. Otherwise, State Farm would have concealed the truth and would have gotten away with a bad faith payment of 40% under a comparative negligence situation. I have copies of my entire file for your review. And the insurance commissioner did nothing , they should have fine the company for being so unethical and acting in bad faith. In addition to the above mentioned State Farm is refusing to pay the policy limits on the bodily Injury, U/M claim on incapacitating injuries to her neck

    Page no. 2
    Complaint Vs. State Farm

    and back in which according to a neurologist and a neurosurgeon she requires surgeries in her neck and back that will cost $100,000.00 and State Farm alleges that she has pre-existing conditions and I asked them to produce proof of their allegations and they haven’t been able to produced that information. Following a period of two years, Margarita decided to settle for their $9,000.00 offer, so she requested a release by fax in which the adjuster faxed to her, however, in her letter the BI adjuster Beatriz Fay, acting in bad faith failed to mention that they were going to issue the check for $9,000.00 to Margarita and State Farm, they are intending to subrogate for 66 2/3% of the $9,000.00 for the medical payments claim made by Margarita, We went by their office and pick up the check, however, the check was issued as we requested in the enclosed letter to Margarita Salomon as a single person, after a few hours, we received a call from Frank Suarez, a clerk at State Farm, indicating that he typed the check and was not aware that they were intending to include State Farms name on the check and that they had placed an stop payment on the check, that they were issuing a second one which will include State Farms name, I advised him not to do it because that is another form of bad faith, because, they would have to follow the proper procedure and sent a check payable to Margarita only, and then the medical payment adjuster should follow procedure again an send a subrogation letter to Margarita and pursue the subrogation, however, in this instance this is not the case because Beatriz Fay and her supervisor have been acting in bad faith all alone. In view of the above mentioned circumstances, I left a message for adjuster Beatriz Fay and advised her that the release that Margarita had signed was in good faith, however that since she concealed the information regarding their subrogation purposes that it would make the release null/void.
    On the following day Margarita received a second release written in the same manner as the previous one, this release is missing State Farms name which
    Page no. 3
    Complaint Vs. State Farm

    should be written next to their insured’s, a copy of the release is included in the attachments on this letter, however, Margarita would not be signing that release this time, because if she does she will be compromising herself by allowing State Farm PIP department to attempt to subrogate. Margarita was very fortunate that she signed a misleading release and then the State Farm employees submitted the check in the manner that Margarita requested. In other words those adjusters at State Farm are involved in an embarrassing situation because it appears that they don’t know what they are doing over there and they should all be on the same page in order to make it look good when they are being unethical and acting in bad faith.
    State Farm is making a reverse fraud claim against Medicare and Medicaid by paying $9,000.00 on this claim on incapacitating injuries caused by their insured, which means that in the year 2024 when Margarita who has always been a healthy person, becomes 65 years old she will have to lie to Medicare and Medicaid in order to undergo through the two surgeries which will cost the Federal and State government, Perhaps $150,000.00. According to the neurologist and the neurosurgeon, now, the two surgeries would cost $100,000.00.
    I know one thing for certain, if Margarita was 65 years old at this time, and due to this accident if she undergoes through the two surgeries and Medicare and Medicaid paid for them, and they submit the bills to State Farm, State Farm would pay the bills in a minute because they don’ want to have to deal with the government and get fine for acting in bad faith by not paying the claim in time.
    This is why I would like the Federal and the State government to create conscience in this immense fraud that is costing them billions of dollars and create a unit to police all of the casualty insurance companies like State Farm that believe that they can create their own laws and hurt Medicare, Medicaid and the communities.
    Page No. 4
    Complaint Vs State Farm

    I have a four page document on insurance carriers wrong doings that they commit daily and get away, because of these wrong doings, many people are now losing their jobs, collecting unemployment and applying for welfare. And the insurance companies continue to make money and the government continues to allow them to collect additional surcharges that protects them from losing money.
    State Farm and some other insurance companies are being as arrogant, fraudulent an unethical as some of the banks, the Real Estate brokers and the agents in the Real Estate business and they have to be investigated ( in the same manner as the mentioned entities ) by government entities not by the insurance commissioner ’s ( DFS ) office because their fraud units are directed to investigate the consumers only. I am aware that this investigations will not eliminate the insurance companies wrong doings, however the investigations will control them and in that manner the governmental units will be able to save millions, perhaps billions of dollars and there will be less people applying to receive benefits from the government.
    I have a large number of documents from different entities that corroborate my allegations on wrong doings by insurance companies including State Farm.
    Many very experience insurance adjusters are aware of this ongoing problems however, they don’t report it because they can be reprimanded and lose their jobs. In addition, it has always been known through the grapevine that the insurance companies control the insurance commissioner ‘s office by giving donations and contributions to his campaigns.
    I submitted copies of this complaint to the Florida Attorney General, to my congressman in Miami, Florida Rafael Diaz Balart and to representative Dana D. Young in Tampa, Florida.
    If you have any questions, you may reach me at 305-962-1075 my email address is janunez2001@att.net.
    Page no. 5
    Complaint Vs. State Farm

    Sincerely,

    Jose A. Nunez,
    All lines adjuster

    Enclosures
    Full captioned report to State Farm with enclosures.
    Copies of Bodily injury settlement letter.
    Copies of check .

    • April 15, 2013 at 10:40 am
      caffiend says:
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      Meh, kinda the wrong forum for that post to be honest. It really hurts any case that you bring when you post details about it prior to it being handled in any fashion.

    • April 15, 2013 at 11:13 am
      boonedoggle says:
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      Mr. Nunez appears to be advocating a third party tort action in behalf of his girlfriend. Assuming he is a lawyer, and possesses a valid attorney/client relationship for the case, he should have sufficent knowledge as to the location of the courthouse of venue where the complaint can be appropriately litigated.

  • April 15, 2013 at 11:03 am
    boonedoggle says:
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    It baffles me why insurers based in Bloomington, Il. and Northbrook, Il. would be so hungry for market share that they would continue to write property insurance along the coast. Have any of the insurers made consistent profits in those areas? Why should policy holders not subject to coastal risks have to continue to subsidize those who make a decision to build in a known high risk area?

  • April 15, 2013 at 12:41 pm
    Fraudalert says:
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    Looks like the chickens are coming home to roost. State Farm has become so used to getting away with this kind of stuff they are suprised (disappointed) when a jury sees the truth. This is just one of the cases State Farm has lost in the last two weeks. They were also found guilty of defamation where an appellate court upheld a jury verdict in which State Farm must pay over $14 Million. They were also disappointed with that jury but the appellate court sill found against State Farm, or should they now be known as State Fraud?

  • April 16, 2013 at 9:57 pm
    justTheFacts says:
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    Mark, I have found most agents don’t know how to write flood policies. The best I have found are those on the Texas Gulf Coast. This most likely stems from the number of events they have been through over the years. The agents in the northeast, have been some of the worst, with a high frequency of reformation issues. After Hurricanes Irene and Sandy, I expect this will improve.

    Ranger, I tend to agree. State Farm actually had agreements in place ahead of time, removing many of the typical flood handling requirements, signed off by NFIP in an effort by all to expedite the process. The problem with removing typical norms is that you have adjusters used to dotting “i”s and crossing “t”s now winging it a bit. This typically had them erring on the side of over-payments. In this scenario, that didn’t work out well if they were overpaying on the flood and underpaying the wind. The fact is, NFIP played a part in this mess but being a Federal entity has them insulated where State Farm is the easier target. I, for one, don’t believe there was some conspiracy to defraud the government for State Farm to reduce exposure, but with an event this size insurers do need to push the limits on their management teams. How they compensate is by using senior adjusters and trainers as managers. These folks, through inexperience, make mistakes – honest mistakes.

    Jose, What can we say? Beating your chest, patting yourself on the back and advertising at the same time… NICE. Have you ever researched DFS complaints for your name? Try it. You might find it interesting.

    Boondoogle, State Farm doesn’t want to write flood or homeowners in first and second tier counties or parishes. What they do want, however, is for you to insure your auto with them. State Farm loses money, breaks even or makes minimal profits on the homeowner side of the business in many areas. The reason they continue to write is that in doing so, you stick with them when you move around and insure multiple lines – auto, home, financial services – with them. It works. They are damned good at it. There is no insurer in the US that can touch them. Does that mean I am saying they are the best at everything? No, just the biggest. I will say, however, that their reputation as a company that is fair is what it is. The problem is that when you are one of the largest employers in the US, chances are you have some employees that make some very bad decisions. It happens everywhere.

    Fraudalert, State Farm has lost a lot of big lawsuits over the years. A company that big, does. Your contribution to the discussion is minimal at best. You say nothing and editorialize. That is one thing coming from a journalist willing to put a name behind the comments, but throwing out fodder to chum the waters without the willingness to put your name behind it, like Jose Nunez, well… it does leave something to be desired. I might not agree with Jose on everything, but applaud him for attaching his name to his negative comments.



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