Oregon Division of Financial Regulation Fines State Farm $200K

The Oregon Division of Financial Regulation issued a $200,000 fine against State Farm after the company reportedly failed to send notices over the past six years informing its insureds of their ability to request an annual credit check, which could affect their premiums.

Half of the total fine will be suspended and waived after three years if State Farm complies with all terms of the final order, according to the division.

The division encouraged residents to take note of Oregon law, which allows consumers to request an annual rerate from their insurer, which could lead to lower premiums.

State Farm self-reported the violations to DFR in July 2023, informing the division that notices were not sent out due to a system error. Because of that error, the notification required were not sent to customers purchasing new automobile insurance policies between Dec. 5, 2017, and Feb. 23, 2023, according to the division.

State Farm did not notify the affected consumers at the inception of their coverage that they may have received a lower rate if their credit history or the credit factors used in their credit-based insurance score were more favorable, and that they had the right to request a rerate of the policy no more than once annually. State Farm notified the division that the issue was corrected on Feb. 23, 2023, for any customers purchasing new policies after that date, according to the division.

As part of the division’s order, State Farm agreed to send a notification to all affected consumers who remain customers of State Farm, roughly 134,690 consumers. State Farm began sending notices on Jan. 2 through a mailing that is separate from the annual policy renewal documents or any other communication. The mailing also includes a statement that Oregon law requires State Farm to provide a notification to customers at the inception of the policy.

The division, part of the Oregon Department of Consumer and Business, said those with questions or complaints can contact the department’s consumer advocates at (888) 877-4894 or email dfr.insuranchelp@dcbs.oregon.gov.

Topics Legislation Oregon