By: sheltowee
Comment:
I don’t mean to sound pesimistic but my gut feeling is that there is big big trouble looming. Based on what I’ve just read in this article and keeping in mind what is going on with hedging in the market. Most insurance companies are owned by corporations that may be owned by big financial institutions, like CHASE. This is the basis of the problem (who owns our insurance companies?).
If we have the same or increased Catostophic events in ’09 and ’10 I really get the feeling that this is the beginning of the end of the insurance industry. It will start with the companies inability to purchase enough reinsurance or any at all.
The question is do we have time to stop this. Answer, Yes but very little (perhaps a year). Will our gov’t recognize and take immediate action, such as protection for the financial markets against hedging and speculators, beginning the process of regulating the insurance industry effectively to eliminate or reduce significantly the risk exposure of the financial markets, and impose higher financial solvency expectations on the insurance companies (i.e. charge a rate for what you can deliver, bankruptcy exposure after a catastrphic event should be eliminated). The answer, “doubtful, I get the feeling that our politicians and many economist fail to identify the causes and effects of the insurance industry and how it relates to our economy. Any logical thinking is muddled by bureaucratic rhetoric and insurance lobbyist. If they suddenly realize what should be done, they will fail to take action soon enough.”
In otherwords they will ***** foot around. I assure you there is a reason behind the greed and it isn’t because the greedy
SOBs are optimistic about our future as a country.
I encourage all individuals reading this to start praying in the name of Jesus and brush up on survival skills. Do you know how to outfit for a long hunt? Do you even know how to hunt? Seem ridiculus? How far will you go to survive? I hope it is but we’ll know in time.
the purpose of corporate and personal economic gain-Gets 82% after Katrina. We need Martin Eakes Ceo for center for responsible lending to take a good look at this company.
.50 billion a year in insuranc
Comment:
They have chosen to look for ways to save on claims.
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
As an IA I can not believe how dumb there already not competitve relacement coverage and a rate increase will continue to make them even easier pickens.
This rate increase is only on DP1,2,3, Townhome and renters policies and not on our Homeowner product but as a Farmers agent I am ticked off about the rate increase because we are already finding ourselves to be non-competitive in the fire market.
On the other hand, I get ticked off at comments like this “While everyone is feeling the sting of a bad economy, insurance companies want to pass the pain on to homeowners and other policyholders.” – Excuse me, but what does every other business do in a bad economy? They pass on it on to their consumers. When gas prices hit the roof, companies passed the cost on to their customers in the form of higher prices, fuel surcharges, increased shipping costs etc… If agricultural products take a hit due to weather we see it in increased costs of produce, milk etc…
I guess it is easier though to blame big insurance while ignoring the many other businesses passing on costs to the consumer.
Using their formula the increase is an average for the state, increases in my district are usually higher. The next gen, when introduced, was 25% higher here. Norhtern areas were given a 42% decrease on introduction, they were happy. Our district has been profitable yet we get shafted by another increase. I guess Paul had to give us one more gift before he got promoted!
State Farm CEO Gets 82% Pay Raise
National News • March 7, 2007
State Farm Insurance’s chairman and CEO received an 82 percent raise after the company posted a record profit last year, a statement from the Bloomington-Ill.-based insurer said this week.West News • November 24, 2008
California Insurance Commissioner Steve Poizner has approved homeowners insurance rate increases for State Farm and Farmers, increasing premiums by a combined $115 million. State Farm … abusers.increases for State Farm record profit last year…..
While everyone is feeling the sting of a bad economy…State Farm Insurance’s chairman and CEO received an 82 percent raise after the company posted a record profit last year
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.
Don’t think that just because you are an independent agent and can take advantage of this rate hike that your carrier are immune to market forces.In this economy every company out there is looking for ways to cut costs and increase profits and the insurance industry in general is walking a razors edge right now. Are you completely comfortable that that the carriers you write with are financially solid and have no back room shenanigans going on that will put your insureds and ultimately your income at risk?
Hmm, you hit the nail on the head. But, what I like is that gas prices are falling how come milk and egg prices still haven’t changed… Greed is good, right?
That’s a good line, I have heard it before, we charge more because we are fincially superior to all carriers offering a better rate/policy. I do not believe anyone will run to the bank, just doing what’s best for the consumer……
I just read one of “einstein’s” posts and had to just laugh; “…we charge more because we are financially superior to all carriers offering a better rate/policy”. First off you obviously are not charging the best rate… and financial size? AM Best buddy… Farmers, State Farm, Allied (nationwide), Travelers, etc… same financial size. A better policy? Hmm… Evey farmer’s policy I see is garbage. Farmer’s lets anyone work for them as you can tell by looking at their policy.
Not so easy pickens. At least here in CA where are all the indepenents when the customer needs them the most, during a catastrophy? Farmers/State Farm are at the scene and evacuation centers writing ALE checks and even assisting customers from Hartford, Travelers, etc. That’s Priceless, as Mastercard would say.
Thats great news for AAA a not for profit company, we just lowered our NorCal rates by an average of 13% and increased or coverage limits. Feel free to call and get a better policy with a lower rate!
209-530-2655
We saw how you covered you Claims in the Tahoe/Angora fire, we were there as well, I beleive you had to walk away on some properties because they were underinsured!
I think you will ALWAYS have instances of underinsureds in a cat situation regardless of what company the home is insured under.
Face it, every single agent out there whether they are captive or independent, can do 100% of everything in their power to make sure the insured is covered and it will still be impossible to have the perfect world where all claims are covered 100% with no issues or problems arising. Why? Because it is the nature of our society these days for people to try and cut costs where they feel they can. Most everyone out there hates the fact that they have to have insurance at all because until they get hit they don’t see the benefit in a concrete manner until they get hit by a fire or in an auto accident. How many times have you all listened to clients complain how they have been paying insurance for X number of years and never had a single claim and yet they feel they pay too much (regardless of their premium)?
When they do get hit it is easy then to point the finger at the big bad insurance company and say “they screwed me” while at the same time forgetting how many letters or phone calls from their agent asking for an insurance review went unanswered, or when their agent made recommendations they “took it under advisement” but took no action because in the consumers mind all their agent is trying to do is sell them something and take more money from their pocket.
AAALarry, I’m absolutely certain that AAA has refused to pay or paid reduced claims due to underinsurance issues. I’m certain they have denied claims due to policy language issues or technicalities. I’m certain they are no differen’t from any other carrier. How am I sure? They are an insurance company. Don’t believe me? Google AAA (or any other carrier) and the words “complaint” “hate” “screwed” “refused to pay” “denied” etc..
ALL companies do it and will continue to do it, it is the nature of the beast. The insured tries to get over on the company and the company tries to protect its’ ***-ets. Whether it is fudging the commuting mileage or driver rating factors on an auto policy or failing to mention the new room addition on a house or the new roof or the kitchen remodel because they know doing so will possibly cause their rates to increase; insureds will always try to work the system to their advantage, agents will always try to get the best rate they can for their client by using every trick in their playbook and insurance companies will always try to counter this by using every trick in their playbook as well.
There is no such thing as a perfectly righteous insurer, agent or insured.
Some perspective, as a former State Farm Agent and a current AAA employee… the State Farm rate adjustment comes as no surprise they just slashed the HO rates by an average of 20% in 2007 of course they decided to raise them, they tried to last year but it wasn’t approved. And to the AAAers this is a good thing because State Farm is currently lower on most homes right now.
This change will definately bring the 3 into closer alignment!
By big three you must mean AAA, State Farm, and Alstate, I can’t believe Farmers would be included in that group. Oh, that’s right, Farmers does have more agents than any of those other companies. I guess we are up there, something we should all be very proud of!
State Farm has history of not releasing recordsBy Anita Lee McClatchy Newspapers 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.).
Two peas in a pod state farm
Posted On: November 28, 2008, 7:45 pm CST
Posted By: I’m not an expert in the area,
Comment:
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. 28 YEARS IS A LONG TIME .
Adding wind coverage to the current federal flood and wind insurance program could benefit some policyholders, so why don’t we add fire, theft or maybe even no-fault insurance so the government can cover all of the risks that the insurance companies are paid to cover but can’t seem to pay for. Jeez, let’s screw the consumer twice. And State Farm needs to be sued for their “Good Neighbor” commercials because we all know that that is “bull”. Wake up America!
“In an economy like this, Californians are relying on the insurance commissioner to keep premiums as low as possible, but Commissioner Poizner refused to hold a hearing to investigate rate hikes that will affect more than 2.5 million homeowners,” said Douglas Heller, Consumer Watchdog’s Executive Director. “We reviewed the proposed rate increases and concluded that they were unjustified. The commissioner should not have allowed these insurers to jack up prices like this.”
At least $20 million of the increase for State Farm was allowed as an exception to Proposition 103’s strict limit on excessive insurer expenses in order to let the insurance giant charge customers for “higher quality of [customer] service.” Included in Farmers’ rate hike was a special exception to the expense limit for millions of dollars allegedly spent on the company’s fraud prevention efforts. According to Consumer Watchdog, the company did not meet the standard required to pass those costs on to policyholders.
Consumer Watchdog noted that both State Farm and Farmers are financially well-positioned to pay claims resulting from the recent Southern California wildfires and do not need premium increases to address those losses. The group intends to challenge the Commissioner’s decision allowing Farmers’ rate hike and is reviewing the propriety of the State Farm increase.
fraud prevention I have a thought to the $25 million in punitive damages $9.5 million judgment against State Farm and an additional $730 million in punitive damages for the insurer’s breach of contract with auto policy holders State Farm policy holders was filed in 2003 for breach of contract and statutory consumer fraud in which $1.1 billion was awarded to 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? Fraud prevention from whom Iask themselves!!!!!
Two years from the date of the theft, the day any potential criminal statute of limitations were to run, Marvin Vail and Jennie Hampton were charged with felony insurance fraud in Johnson County, Kansas. The bases for the State’s charges derived entirely from information provided by State Farm and co-defendant, the National Insurance Crime Bureau. It was later uncovered that during their independent investigation, State Farm’s Special Investigative Unit threatened an independent witness to solicit purgery, concealed and disregarded clear exculpatory evidence, reported what information they did collect in a false manner, and directed the conclusions of their mechanical expert. State Farm, knowing they did not have access to the Johnson County District Attorney’s Office, then provided this one sided and erroneous information to NICB, requesting instead that they refer the case to the Johnson County District Attorney for charging.
NICB followed State Farm’s instruction and, through its employee and retired KBI agent who as an active agent worked side by side with the DA, presented the file to the Johnson District Attorney. Prior to this, the NICB had done absolutely no independent investigation to either confirm or deny the facts presented by State Farm. Rather, while presenting this information to the D.A., NICB admittedly “watered down” exculpatory evidence trying to instigate charging. Additionally, while meeting with the Johnson County D.A., NICB withheld critical evidence by not informing the prosecutor that it was State Farm, not NICB, which was behind the investigation and referral.
After reviewing the information provided, felony insurance fraud charges were filed against both Jennie Hampton and Marvin Vail. Prior to this neither Hampton nor Vail had any criminal history. As a result of the charges they were arrested, faced the extreme humiliation, anxiety and expense that is tied with being criminal defendants.
Following the criminal charges, State Farm continued to work behind the scenes preparing the State’s witnesses for the preliminary hearing testimony, claiming privilege on documents sought by the prosecutor, attempting to keep crucial evidence from being inspected by plaintiffs’ criminal attorneys, closely monitoring the criminal trial and providing well-prepared witnesses to testify at trial.
Eventually, on May 10, 2001, after a ten day criminal trial, both Jennie and Marvin were acquitted of all charges. Rather than showing remorse for instigating the wrongful prosecution, State Farm continued to not only proclaim Hampton and Vail’s guilt, but deny Ms. Hampton’s claim.
After the acquittals, Jennie Hampton’s breach claim in Johnson County, Kansas against State Farm was dismissed and re-filled with her and Marvin’s claims for malicious prosecution and the tort of outrage against State Farm and the NICB. After a three week trial in Jackson County, but before verdict, defendant NICB entered into a 537.065 high low agreement with a high of $100, 000 and low of $110,000 for Mr. Vail and $150,000 and $160,000 for Ms. Hampton. The jury returned a verdict for plaintiffs on all counts, and after a post trial hearing the Court entered judgment against NICB as set forth in the 537.065 agreement. The Court also entered judgment against State Farm for $200,000 in actual damages for Ms. Hampton and $175,000 for Marvin Vail. For her breach claim against State Farm the Court entered judgment in favor of Ms. Hampton for $251,700 in attorney fees. Additionally, the court entered judgment in favor of Marvin Vail and Jennie Hampton individually for their punitive claims against State Farm in the amount of $4,000,000 each.
EACH TIME A MAN STANDS UP FOR AN IDEAL, ACTS TO IMPROVE THE LOT OF OTHERS OR STRIKES OUT AGAINST INJUSTICE,HE SENDS FORTH A TINY RIPPLE OF HOPE. AND CROSSING EACH OTHER FROM A MILLION DIFFERENT CENTERS OF ENERGY AND DARING,THOSE RIPPLES CAN CREATE A CURRENT WHICH CAN SWEEP DOWN THE MIGHTIEST WALLS OF OPPRESSION AND RESISTANCE
Dear Mr. Poizner- Zurich Insurance owns Farmers Insurance, and last year took a management fee of 2.5 billion. Each year this fee has increased, why did you not ask Farmers to reduce this management fee, and keep their already high rates the same.
By: sheltowee
Comment:
I don’t mean to sound pesimistic but my gut feeling is that there is big big trouble looming. Based on what I’ve just read in this article and keeping in mind what is going on with hedging in the market. Most insurance companies are owned by corporations that may be owned by big financial institutions, like CHASE. This is the basis of the problem (who owns our insurance companies?).
If we have the same or increased Catostophic events in ’09 and ’10 I really get the feeling that this is the beginning of the end of the insurance industry. It will start with the companies inability to purchase enough reinsurance or any at all.
The question is do we have time to stop this. Answer, Yes but very little (perhaps a year). Will our gov’t recognize and take immediate action, such as protection for the financial markets against hedging and speculators, beginning the process of regulating the insurance industry effectively to eliminate or reduce significantly the risk exposure of the financial markets, and impose higher financial solvency expectations on the insurance companies (i.e. charge a rate for what you can deliver, bankruptcy exposure after a catastrphic event should be eliminated). The answer, “doubtful, I get the feeling that our politicians and many economist fail to identify the causes and effects of the insurance industry and how it relates to our economy. Any logical thinking is muddled by bureaucratic rhetoric and insurance lobbyist. If they suddenly realize what should be done, they will fail to take action soon enough.”
In otherwords they will ***** foot around. I assure you there is a reason behind the greed and it isn’t because the greedy
SOBs are optimistic about our future as a country.
I encourage all individuals reading this to start praying in the name of Jesus and brush up on survival skills. Do you know how to outfit for a long hunt? Do you even know how to hunt? Seem ridiculus? How far will you go to survive? I hope it is but we’ll know in time.
the purpose of corporate and personal economic gain-Gets 82% after Katrina. We need Martin Eakes Ceo for center for responsible lending to take a good look at this company.
.50 billion a year in insuranc
Comment:
They have chosen to look for ways to save on claims.
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
As an IA I can not believe how dumb there already not competitve relacement coverage and a rate increase will continue to make them even easier pickens.
This rate increase is only on DP1,2,3, Townhome and renters policies and not on our Homeowner product but as a Farmers agent I am ticked off about the rate increase because we are already finding ourselves to be non-competitive in the fire market.
On the other hand, I get ticked off at comments like this “While everyone is feeling the sting of a bad economy, insurance companies want to pass the pain on to homeowners and other policyholders.” – Excuse me, but what does every other business do in a bad economy? They pass on it on to their consumers. When gas prices hit the roof, companies passed the cost on to their customers in the form of higher prices, fuel surcharges, increased shipping costs etc… If agricultural products take a hit due to weather we see it in increased costs of produce, milk etc…
I guess it is easier though to blame big insurance while ignoring the many other businesses passing on costs to the consumer.
The rate increase in the article is for Next Generation H/O eff. 12/16. Protector Plus and Special H/O are being hit also in a couple months.
Great. Amazing how our Next Gen is already non-competitive and now we are going to make it even harder. I guess that’s the “Farmers Way!”
Using their formula the increase is an average for the state, increases in my district are usually higher. The next gen, when introduced, was 25% higher here. Norhtern areas were given a 42% decrease on introduction, they were happy. Our district has been profitable yet we get shafted by another increase. I guess Paul had to give us one more gift before he got promoted!
Shhhhh… einstein, you wanna wake the sleeping dogs? Let them lie there while we independents steal their kibble.
The dogs are barking and have been for a long time, however, their owners (FIG)a dog abusers.
State Farm CEO Gets 82% Pay Raise
National News • March 7, 2007
State Farm Insurance’s chairman and CEO received an 82 percent raise after the company posted a record profit last year, a statement from the Bloomington-Ill.-based insurer said this week.West News • November 24, 2008
California Insurance Commissioner Steve Poizner has approved homeowners insurance rate increases for State Farm and Farmers, increasing premiums by a combined $115 million. State Farm … abusers.increases for State Farm record profit last year…..
While everyone is feeling the sting of a bad economy…State Farm Insurance’s chairman and CEO received an 82 percent raise after the company posted a record profit last year
Let them take their rate increases and let me take their customers.
Thanks,
Farmers and State Farm.
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.
Don’t think that just because you are an independent agent and can take advantage of this rate hike that your carrier are immune to market forces.In this economy every company out there is looking for ways to cut costs and increase profits and the insurance industry in general is walking a razors edge right now. Are you completely comfortable that that the carriers you write with are financially solid and have no back room shenanigans going on that will put your insureds and ultimately your income at risk?
Hmm, you hit the nail on the head. But, what I like is that gas prices are falling how come milk and egg prices still haven’t changed… Greed is good, right?
That’s a good line, I have heard it before, we charge more because we are fincially superior to all carriers offering a better rate/policy. I do not believe anyone will run to the bank, just doing what’s best for the consumer……
I just read one of “einstein’s” posts and had to just laugh; “…we charge more because we are financially superior to all carriers offering a better rate/policy”. First off you obviously are not charging the best rate… and financial size? AM Best buddy… Farmers, State Farm, Allied (nationwide), Travelers, etc… same financial size. A better policy? Hmm… Evey farmer’s policy I see is garbage. Farmer’s lets anyone work for them as you can tell by looking at their policy.
Not so easy pickens. At least here in CA where are all the indepenents when the customer needs them the most, during a catastrophy? Farmers/State Farm are at the scene and evacuation centers writing ALE checks and even assisting customers from Hartford, Travelers, etc. That’s Priceless, as Mastercard would say.
Thats great news for AAA a not for profit company, we just lowered our NorCal rates by an average of 13% and increased or coverage limits. Feel free to call and get a better policy with a lower rate!
209-530-2655
We saw how you covered you Claims in the Tahoe/Angora fire, we were there as well, I beleive you had to walk away on some properties because they were underinsured!
I think you will ALWAYS have instances of underinsureds in a cat situation regardless of what company the home is insured under.
Face it, every single agent out there whether they are captive or independent, can do 100% of everything in their power to make sure the insured is covered and it will still be impossible to have the perfect world where all claims are covered 100% with no issues or problems arising. Why? Because it is the nature of our society these days for people to try and cut costs where they feel they can. Most everyone out there hates the fact that they have to have insurance at all because until they get hit they don’t see the benefit in a concrete manner until they get hit by a fire or in an auto accident. How many times have you all listened to clients complain how they have been paying insurance for X number of years and never had a single claim and yet they feel they pay too much (regardless of their premium)?
When they do get hit it is easy then to point the finger at the big bad insurance company and say “they screwed me” while at the same time forgetting how many letters or phone calls from their agent asking for an insurance review went unanswered, or when their agent made recommendations they “took it under advisement” but took no action because in the consumers mind all their agent is trying to do is sell them something and take more money from their pocket.
AAALarry, I’m absolutely certain that AAA has refused to pay or paid reduced claims due to underinsurance issues. I’m certain they have denied claims due to policy language issues or technicalities. I’m certain they are no differen’t from any other carrier. How am I sure? They are an insurance company. Don’t believe me? Google AAA (or any other carrier) and the words “complaint” “hate” “screwed” “refused to pay” “denied” etc..
ALL companies do it and will continue to do it, it is the nature of the beast. The insured tries to get over on the company and the company tries to protect its’ ***-ets. Whether it is fudging the commuting mileage or driver rating factors on an auto policy or failing to mention the new room addition on a house or the new roof or the kitchen remodel because they know doing so will possibly cause their rates to increase; insureds will always try to work the system to their advantage, agents will always try to get the best rate they can for their client by using every trick in their playbook and insurance companies will always try to counter this by using every trick in their playbook as well.
There is no such thing as a perfectly righteous insurer, agent or insured.
You make a great point. Thank you Farmer John.
Some perspective, as a former State Farm Agent and a current AAA employee… the State Farm rate adjustment comes as no surprise they just slashed the HO rates by an average of 20% in 2007 of course they decided to raise them, they tried to last year but it wasn’t approved. And to the AAAers this is a good thing because State Farm is currently lower on most homes right now.
This change will definately bring the 3 into closer alignment!
Farmer John- you drank the kool-aid!
By big three you must mean AAA, State Farm, and Alstate, I can’t believe Farmers would be included in that group. Oh, that’s right, Farmers does have more agents than any of those other companies. I guess we are up there, something we should all be very proud of!
State Farm has history of not releasing recordsBy Anita Lee McClatchy Newspapers 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.).
Two peas in a pod state farm
Posted On: November 28, 2008, 7:45 pm CST
Posted By: I’m not an expert in the area,
Comment:
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. 28 YEARS IS A LONG TIME .
Adding wind coverage to the current federal flood and wind insurance program could benefit some policyholders, so why don’t we add fire, theft or maybe even no-fault insurance so the government can cover all of the risks that the insurance companies are paid to cover but can’t seem to pay for. Jeez, let’s screw the consumer twice. And State Farm needs to be sued for their “Good Neighbor” commercials because we all know that that is “bull”. Wake up America!
“In an economy like this, Californians are relying on the insurance commissioner to keep premiums as low as possible, but Commissioner Poizner refused to hold a hearing to investigate rate hikes that will affect more than 2.5 million homeowners,” said Douglas Heller, Consumer Watchdog’s Executive Director. “We reviewed the proposed rate increases and concluded that they were unjustified. The commissioner should not have allowed these insurers to jack up prices like this.”
At least $20 million of the increase for State Farm was allowed as an exception to Proposition 103’s strict limit on excessive insurer expenses in order to let the insurance giant charge customers for “higher quality of [customer] service.” Included in Farmers’ rate hike was a special exception to the expense limit for millions of dollars allegedly spent on the company’s fraud prevention efforts. According to Consumer Watchdog, the company did not meet the standard required to pass those costs on to policyholders.
Consumer Watchdog noted that both State Farm and Farmers are financially well-positioned to pay claims resulting from the recent Southern California wildfires and do not need premium increases to address those losses. The group intends to challenge the Commissioner’s decision allowing Farmers’ rate hike and is reviewing the propriety of the State Farm increase.
fraud prevention I have a thought to the $25 million in punitive damages $9.5 million judgment against State Farm and an additional $730 million in punitive damages for the insurer’s breach of contract with auto policy holders State Farm policy holders was filed in 2003 for breach of contract and statutory consumer fraud in which $1.1 billion was awarded to 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? Fraud prevention from whom Iask themselves!!!!!
Two years from the date of the theft, the day any potential criminal statute of limitations were to run, Marvin Vail and Jennie Hampton were charged with felony insurance fraud in Johnson County, Kansas. The bases for the State’s charges derived entirely from information provided by State Farm and co-defendant, the National Insurance Crime Bureau. It was later uncovered that during their independent investigation, State Farm’s Special Investigative Unit threatened an independent witness to solicit purgery, concealed and disregarded clear exculpatory evidence, reported what information they did collect in a false manner, and directed the conclusions of their mechanical expert. State Farm, knowing they did not have access to the Johnson County District Attorney’s Office, then provided this one sided and erroneous information to NICB, requesting instead that they refer the case to the Johnson County District Attorney for charging.
NICB followed State Farm’s instruction and, through its employee and retired KBI agent who as an active agent worked side by side with the DA, presented the file to the Johnson District Attorney. Prior to this, the NICB had done absolutely no independent investigation to either confirm or deny the facts presented by State Farm. Rather, while presenting this information to the D.A., NICB admittedly “watered down” exculpatory evidence trying to instigate charging. Additionally, while meeting with the Johnson County D.A., NICB withheld critical evidence by not informing the prosecutor that it was State Farm, not NICB, which was behind the investigation and referral.
After reviewing the information provided, felony insurance fraud charges were filed against both Jennie Hampton and Marvin Vail. Prior to this neither Hampton nor Vail had any criminal history. As a result of the charges they were arrested, faced the extreme humiliation, anxiety and expense that is tied with being criminal defendants.
Following the criminal charges, State Farm continued to work behind the scenes preparing the State’s witnesses for the preliminary hearing testimony, claiming privilege on documents sought by the prosecutor, attempting to keep crucial evidence from being inspected by plaintiffs’ criminal attorneys, closely monitoring the criminal trial and providing well-prepared witnesses to testify at trial.
Eventually, on May 10, 2001, after a ten day criminal trial, both Jennie and Marvin were acquitted of all charges. Rather than showing remorse for instigating the wrongful prosecution, State Farm continued to not only proclaim Hampton and Vail’s guilt, but deny Ms. Hampton’s claim.
After the acquittals, Jennie Hampton’s breach claim in Johnson County, Kansas against State Farm was dismissed and re-filled with her and Marvin’s claims for malicious prosecution and the tort of outrage against State Farm and the NICB. After a three week trial in Jackson County, but before verdict, defendant NICB entered into a 537.065 high low agreement with a high of $100, 000 and low of $110,000 for Mr. Vail and $150,000 and $160,000 for Ms. Hampton. The jury returned a verdict for plaintiffs on all counts, and after a post trial hearing the Court entered judgment against NICB as set forth in the 537.065 agreement. The Court also entered judgment against State Farm for $200,000 in actual damages for Ms. Hampton and $175,000 for Marvin Vail. For her breach claim against State Farm the Court entered judgment in favor of Ms. Hampton for $251,700 in attorney fees. Additionally, the court entered judgment in favor of Marvin Vail and Jennie Hampton individually for their punitive claims against State Farm in the amount of $4,000,000 each.
EACH TIME A MAN STANDS UP FOR AN IDEAL, ACTS TO IMPROVE THE LOT OF OTHERS OR STRIKES OUT AGAINST INJUSTICE,HE SENDS FORTH A TINY RIPPLE OF HOPE. AND CROSSING EACH OTHER FROM A MILLION DIFFERENT CENTERS OF ENERGY AND DARING,THOSE RIPPLES CAN CREATE A CURRENT WHICH CAN SWEEP DOWN THE MIGHTIEST WALLS OF OPPRESSION AND RESISTANCE
Dear Mr. Poizner- Zurich Insurance owns Farmers Insurance, and last year took a management fee of 2.5 billion. Each year this fee has increased, why did you not ask Farmers to reduce this management fee, and keep their already high rates the same.