As part of an agreement with the Indiana Department of Insurance (IDOI), State Farm will reevaluate close to 35,000 policyholder claim files and pay $275,000, which will be deposited into the State of Indiana's General Fund.
Adopted by IDOI Commissioner Jim Atterholt, the agreement will mark the conclusion of the market conduct examination that began in March, 2007 after 200 State Farm policyholders lodged complaints. The examination, which focused on State Farm's response to claims resulting from an April, 2006 hailstorm in Indianapolis, found no violations of state law. During the course of IDOI's examination process, State Farm has already revisited and paid policyholders an additional $1,799,544.
"It is always our goal to pay what we owe," said Dick Luedke, a spokesperson for State Farm. "Of the nearly 50,000 claims we received from this storm, less than 1 percent resulted in a complaint filed with the Indiana Department of Insurance. State Farm has paid $273 million to policyholders whose property was damaged by this storm.
The recent agreement calls for a continued review of 7,000 closed-without-payment policyholder claims and an additional 29,000 claims related to the hail storm of 2006. As a result of the settlement, the state established a toll-free number for consumers insured by State Farm to voice any lingering concerns.
"This agreement resolves our specific areas of concern as to claims handling," said Carol Mihalik, chief deputy commissioner and counsel of the Consumer Protection Unit of the Department of Insurance. "This included the use of independent adjusters, consistency of use of engineering reviews, the application of the appraisal provision within the insurance policies, and the need for multiple estimates and re-inspections prior to a final payment."
Mr. Luedke reiterated State Farm's earnestness in working closely with the department to finalize claim reviews and fulfill the insurer's commitment to policyholders.
"We have cooperated fully, and continue to cooperate fully, with the department's market conduct examination," Mr. Luedke said. "We understand the department has an obligation to verify insurers are engaging in fair claim practices. We understand that obligation because we have it as well. We regularly conduct our own reviews to assure claims are being handled in accordance with our commitment to our policyholders. When we find a mistake has been made, we correct it."
Source: Indiana Department of Insurance
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
