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State Farm Faces Class Action Lawsuit in California

State Farm Mutual Automobile Insurance Company stands accused of enriching itself with payments rightfully belonging to its insureds after a class action lawsuit was filed recently in U.S. Federal

By Christina Bramlet | Updated on May 20, 2008

State Farm Mutual Automobile Insurance Company stands accused of enriching itself with payments rightfully belonging to its insureds after a class action lawsuit was filed recently in U.S. Federal Court, Central District. The suit alleges that the insurer is operating in direct violation of California law, specifically the “Make Whole Rule.”

The controversy began with a thud, or more precisely, a rear-end collision involving Stuart Chandler, a State Farm policyholder. After his car was rear-ended by another vehicle, the Fresno, Calif. man obtained a rental car–to which he was entitled under his personal automobile insurance policy — while his car was being repaired. State Farm subsequently reimbursed 80 percent of the total rental bill of $317.45, leaving Chandler to pick up the remaining 20 percent, or $63.49.

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