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Eligible motorists and health care providers have until Monday December 6th to claim a share in a $9.5 million jury verdict against Farmers Insurance. The verdict against Farmers was returned in a class action lawsuit in Multnomah County Circuit Court on December 5, 2003.

Class members, those eligible for a share of the jury award, include people who were injured in a motor vehicle accident between January 26, 1998 and July 31, 1999 and had a claim with Farmers Insurance. Also eligible for a share of the award are the doctors and medical clinics that treated the injured individuals. All claims must be postmarked no later than December 6, 2004.

If you submitted a claim for a motor vehicle accident to Farmers during 1998 and want to claim your share of the money, you are asked to call 800-245-5097. A claim form can be obtained by going to the web page http://www.farmerspipclaims.com/. Almost 9,000 claim forms were mailed out on August 4, 2004 to all known class members and their healthcare providers. More than 3,000 claimants have responded to date, with more responding daily to meet the deadline.

Qualified individuals and health care providers will be compensated for the benefits Farmers did not pay. In addition, individual drivers and passengers who are class members may share in additional damages. A share of these damages could be $207 or more per person.

Jurors in the case Strawn v. Farmers Insurance Co. found that Farmers acted in bad faith and had been systematically defrauding its policyholders by failing to reimburse its customers for the full amount of their reasonable medical expenses following an auto accident. Oregon motor vehicles insurance law requires insurance companies pay “all reasonable medical expenses.” Between 1998 and mid-1999, Farmers used a statistical formula that reduced payments to healthcare providers for any amount over what Farmers asserted was reasonable.

“The amounts the company was taking from individual consumers were so small that it was never enough for one person to pursue,” said Rick Yugler, who tried the case against Farmers. “Of course, all these small amounts added up to over a million dollars in profits for the insurance company.” The class includes 7,200 injured motorists and over 1,500 Oregon doctors, chiropractors, therapists and hospitals who may be entitled to share in the verdict.

The original claimant was Mark Strawn, who was injured in a car wreck in 1997. His insurance company, Farmers, paid over $17,000 of his medical expenses except for $427. When Yugler investigated on behalf of Strawn, he discovered Farmers' deliberate system of cutting reimbursements. The system was never disclosed in the insurance policy. Farmers changed its practice in 1999.

FACT SHEET

Class Action Awards from Strawn v. Farmers Insurance Co.

Claim deadline

All claims for compensation must postmarked no later than December 6, 2004. You may obtain a copy of a Statement of Claim Form by logging onto http://www.farmerspipclaims.com/ or calling Strawn Claims Administration 800-245-5097. Statement of Claim forms must be sent to PO Box 3560, Portland OR 97208-3560.

Eligible class members

Class members include any person who made a personal injury (“PIP”) claim with Farmers Insurance Company of Oregon, Mid-Century Insurance Company or Truck Insurance Exchange whose claim payment was reduced between January 26, 1998 and July 31, 1999.

Payments

Class members and their healthcare providers with approved claims will be reimbursed for the reduction in their benefits, plus interest.

Additional payments

Class members – injured drivers and passengers – will share in the $8,000,000 punitive damages award. Health care providers are not eligible for these payments. Each share is estimated to be $207 per person, but could be more depending on the number of class members who come forward by December 6.

Background

On December 5, 2003, jurors in the Multnomah County Circuit Court class action lawsuit Strawn v. Farmers Insurance Co. found that Farmers acted in bad faith and had been systematically defrauding its policyholders by failing to reimburse its customers for the full amount of their reasonable medical expenses following an auto accident. The jury awarded $1,500,000 in compensatory damages and prejudgment interest, and $8,000,000 in punitive damages.

Oregon motor vehicles insurance law requires insurance companies pay “all reasonable medical expenses.” Between 1998 and mid-1999, Farmers used a statistical formula that reduced payments to healthcare providers for any amount over what Farmers asserted was reasonable. The amounts due individual consumers were generally too small to prompt action.

The original claimant against Farmers Insurance was Mark Strawn, who was injured in a car wreck in 1997. Farmers, his carrier, paid over $17,000 of his medical expenses except for $427. When Strawn’s attorney investigated on behalf of Strawn, he discovered Farmers' deliberate system of cutting reimbursements. The attorney, Richard Yugler of the Portland firm Landye Bennett Blumstein, filed the class action on behalf of the 7,200 injured motorists and over 1,500 Oregon doctors, chiropractors, therapists and hospitals who were affected by Farmers action.

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Deadline nears for Farmers Insurance Class-Action award