Farmers Insurance Sucks! Boycott Farmers Insurance!

Farmers Insurance Senior Liability Representative Tells All

2008-07-24T01:01:00.000-07:00

General Information

What was your job title at Farmers Insurance? Senior Liability Rep
How long did you work at Farmers Insurance? Just under 5 yrs
When did you leave Farmers Insurance? Still employed

Questions

Did you use Colossus to calculate (low-ball) claims? yes

Is there software programs used to calculate claims for Life, Auto, Homeowners, if so what are they called? Explain how each is used to low-ball a claim. Now using CC, Colossus was done away with. CC utilizes zip codes and we enter medicals into system based on severity of injury and arrive at general damages amounts. We are told to state that this is a only a “tool” and that we use experience and judgement to evaluate claims. This is a lie.

What other software programs are used for claims? CRN

Is there pressure to low-ball and deny claims? Explain. Absolutely. We are told to reduce medical bills if we think too many procedures were used or costs are not what we feel is appropriate. We are looking for ways to not pay the claims.

What “incentives” or “contests” were there for low-balling and/or denying a claim? Explain. They are not giving any incentives for this. It is a job requirement.

If you have low-balled, I am sure you may feel bad about it. Describe the top two cases (or more if you like) you feel bad about low-balling? Explain the scenario and why you feel bad about it. Specialist provide prognosis and we cut it down based on the persons health and years we expect them to live. Lower socioeconomic, elderly persons are given less. They aren't really paying us anything anymore, these are job duties.

For those who are trying to get a fair settlement from Farmers what advice would you give them to deal with Farmers Insurance Claims (Break down into categories of auto, body, home, and life if necessary)?
Auto and home injury claims get a lawyer. Farmers wants documentation for medical proof well beyond what is reasonable and then we question what “specialists” provide for records.

What is the top three things every claimant should know?
All injuries: the adjusters have to meet with you or they are penalized for not doing so. You must sign a medical authorization so that we can get your records. We are going to question any prior injuries. You need to clearly detail all “hobbies, lifestyle, wages that you feel are compromised by the injury” We will get your history with or without your written permission. If you retain an attorney. He'll provide it for us.

Other

What other questions do you recommend we add to this questionnaire? Feel free to add them below and answer them.

Adjusters are being pushed to settle claims for next to nothing, to diminish injuries and treatments received. We are being forced to document files to the point of severely delaying the time to settle a claim. We aren't given any authority to settle claims. Management is in EVERYTHING.

If there is anything else you want to share that others should know about Farmers Insurance? They truly do not care for their employees and that means even less concern for the consumer.

Farmers Insurance Adjuster Jeff Dunavant Hits Bicyclist Then Leaves

2008-07-21T21:30:00.000-07:00

St. Paul girl hit on bike by insurance adjuster

A girl turned into a detective after she was hit by a car while riding her bicycle on Lexington Avenue in Shoreview.

"I was so scared I was underneath a car. I was pounding on the front of the car trying to make it stop," said 13-year-old Sydney Carlson.

Sydney said the driver stopped, got out, and even apologized to her.

"But he didn't really help me. He didn't offer to call 911 or anything and he didn't help me up," she said.

She said she turned around to call her father, but then the driver took off. Fortunately, Sydney remembered the Farmer’s Insurance logo on the side of the car.

"To leave and you're with an insurance company? It made me kind of like what the heck is wrong…I was very upset," said Sydney’s father Joel Carlson.

Joel contacted Farmer’s Insurance, who discovered the driver was insurance adjuster Jeff Dunavant.

A Farmer’s Insurance spokesperson told 5 EYEWITNESS NEWS, "the company is thoroughly investigating the accident and will take whatever action they deem necessary."

"They are people that should know about exchanging information and that never happened," Joel said.

Sydney was wearing a helmet at the time of the accident and only suffered scrapes and bruises.

The Ramsey County Sheriff’s Department is investigating.

Story and Video at kstp.com

Farmers Insurance not a 'Good' or a 'Service'???!! (Argue Anything for Profit)

2008-07-10T06:10:00.000-07:00

Court to Decide Whether Insurance is a 'Service'

SANTA MONICA, Calif., July 9 /PRNewswire-USNewswire/ -- Consumer Watchdog today urged the California Supreme Court to subject insurance companies to one of the state's main consumer protection laws.

In a "friend of the court" brief, Consumer Watchdog urged the court to overturn a ruling last summer by the Court of Appeal in Los Angeles. That court decided that insurance companies that break the law cannot be sued under the Consumers Legal Remedies Act (CLRA) because, the court said, insurance is neither a "good" nor a "service" and thus the CLRA does not apply.

Consumer Watchdog urged the Supreme Court to ignore the lower court's view that the best public policy would be to allow only the Insurance Commissioner to hear complaints against unlawful or unfair practices by insurance companies. The non-profit advocacy group said that the court's public policy beliefs did not comport with experience under Proposition 103, which requires that insurers be subject to lawsuits when they break the law, and were irrelevant in any case.

"Insurance is a big part of the $115 billion financial services marketplace in California," said Harvey Rosenfield, author of Proposition 103, who wrote the brief filed by Consumer Watchdog today. "There is no basis in the law to give the insurance industry a special exemption from the CLRA's protections, and this is especially true since the voters directed that the insurance industry be subject to all the laws that are applicable to other businesses."

Consumer Sued Farmers for Fraud

The case was brought by a consumer who bought a life insurance policy from Farmers Insurance after being told that paying the premium would keep the policy in force indefinitely. In fact, that was not true.

The consumer sued Farmers, charging a violation of the Consumers Legal Remedies Act (CLRA), which bars fraud and other unlawful conduct in a "transaction intended to result or which did result in the sale or lease of goods or services to any consumer." Farmers argued that insurance was neither a "good" nor a "service," and thus the law did not apply. A decision by Division 3 of the Second District Court of Appeal, authored by Justice Walter Croskey, agreed with the insurance company.

"Consumers are increasingly beleaguered by misleading advertising, fraud and other trickery in the marketplace," said Rosenfield. "If insurance is not a 'good' or a 'service,' what is it? The decision places insurance companies beyond the law. Moreover, this is the second time in the last two years that this same court panel has issued a decision incorrectly barring the right of a consumer to sue an insurance company. This court has refused to respect the laws passed by the voters," Rosenfield concluded.

In the previous case, Consumer Watchdog had sued Safeco Insurance Co. for violation of a provision of insurance reform Proposition 103 - section 1861.02(a) of the state insurance code -- that bars insurance companies from overcharging motorists who apply for insurance for the first time. Farmers was also sued for the same violation. Proposition 103, approved by voters in 1988, authorizes "any person" to "enforce" its requirements. Despite this clear language, in a March, 2006, ruling, Justice Croskey agreed with Safeco and Farmers' argument that consumers could not go to court to "enforce" the statute against insurance companies when they violate Proposition 103. Consumer Watchdog continues to pursue the case and consumers who believe they were illegally overcharged by Safeco can contact the group at: http://www.consumerwatchdog.org/complaints/

Download the "friend of the court" brief: http://www.consumerwatchdog.org/resources/FAIRBANKSAMICUS.pdf

Consumer Watchdog (formerly the Foundation for Taxpayer and Consumer Rights) is a nonpartisan, nonprofit consumer advocacy organization. Learn more at http://www.ConsumerWatchdog.org

Source: earthtimes.org

Farmers Insurance Number 7 of Top 10 Worst Insurance Companies

2008-07-10T06:01:00.000-07:00

July 2008, Insurance Industry Employs “Deny, Delay, Defend” Strategy, Puts Profits Over Policyholders. The rankings show a distinct pattern of insurance industry greed amongst 10 companies that refuse to pay just claims, employ hardball tactics against policyholders, reward executives with extravagant salaries, and raise premiums while hoarding excessive profits.

Farmers – Swiss-owned Farmers Insurance Group consistently ranks at or near the bottom of homeowner satisfaction surveys, and for good reason. For example, Farmers had an incentive program called “Quest for Gold” that offered pizza parties to its adjusters that met low claims payments goals. American Association of Justice

Farmers Insurance Received Most Complaints for Auto and Homeowners Insurance

2008-06-24T06:00:00.000-07:00

Oregon's Department of Consumer and Business Services Insurance Division has published the 2007 Annual Complaint Statistics, ranking major insurers based on their complaint records in six common lines of insurance: personal auto, health, homeowner, life, annuities, and long-term care.

This report ranks major insurers by their complaint records, which are based on the number of confirmed consumer complaints closed by the Insurance Division and the amount of premium dollars written by the insurers. According to DCBS, the report allows consumers to see at a glance how a company compares with its competitors; the information should help consumer to make sound insurance decisions.

During 2007, the Oregon Insurance Division closed 2,934 complaints in six common lines of insurance. The insurers listed in the report accounted for 2,275 complaints or 78 percent of all complaints in the six lines. In 2007, most complaints involved disputes about claims processing and benefits, DCBS indicated. Other complaints involved problems with the sale and servicing of insurance policies, such as cancellations, nonrenewals, and rate increases. The Insurance Division's Consumer Advocacy Unit helped recover $1.78 million in claims for consumers who contacted the office in 2007.

Of personal auto insurance companies, Farmers Insurance Company of Oregon received the most complaints in 2007, with 211 complaints of 187 confirmed. Northwestern Pacific Indemnity Co. and Oregon Automobile Insurance Co. tied for receiving zero complaints last year, the statistics indicate.

Of homeowners insurance companies, several companies -- California Casualty General Insurance Company of Oregon, North Pacific Insurance Co., Northwestern Pacific Indemnity Co., Oregon Automobiles Insurance Co. and Western Protectors Insurance Co. -- received zero complaints. Farmers Insurance Company of Oregon received the most complaints with 36 confirmed complaints.State Farm Fire and Casualty Co. received the second-highest number of complaints with 31 comfirmed complaints, followed by Allstate Insurance Co., which had 16 confirmed complaints.

To view the statistics, visit insurance.oregon.gov

Source: insurancejournal.com

Colorado Bill 1407: Law Would Enforce Insurance Company Fairness

2008-06-18T12:23:00.000-07:00

Fairness. It’s a simple principle that guides the lives of most Americans. Yet for insurance companies, the principle is often overlooked and brushed aside for one reason: profit. House Bill 1407 is now on Governor Ritter’s desk awaiting his signature to make it the law. The new law would require insurance companies to pay double damages plus attorney fees if they are found to have unreasonably delayed or denied a valid insurance claim. The law is the culmination of years and years of insurance company abuse against its policyholders by unreasonably denying claims or delaying the payment of valid claims.

Colorado needs this law. For too long insurance companies have made large profits on the backs of their policyholders. This law would help policyholders stand up against multi-billion dollar corporations. In 2005, the year of Hurricane Katrina, it was estimated that the insurance industry made over $40 billion dollars in profit and $63 billion in 2006.

Fairness. It’s a simple principle that guides the lives of most Americans. Yet for insurance companies, the principle is often overlooked and brushed aside for one reason: profit. House Bill 1407 is now on Governor Ritter’s desk awaiting his signature to make it the law. The new law would require insurance companies to pay double damages plus attorney fees if they are found to have unreasonably delayed or denied a valid insurance claim. The law is the culmination of years and years of insurance company abuse against its policyholders by unreasonably denying claims or delaying the payment of valid claims.

Colorado needs this law. For too long insurance companies have made large profits on the backs of their policyholders. This law would help policyholders stand up against multi-billion dollar corporations. In 2005, the year of Hurricane Katrina, it was estimated that the insurance industry made over $40 billion dollars in profit and $63 billion in 2006.

It’s hard to imagine a world without insurance. Insurance is a wonderful social tool that allows us to pool our money and transfer the risk of loss from us to the insurance company. At its core, insurance is an agreement (a contract). You agree to pay premiums and the insurance company agrees to pay claims. The insurance company takes your premiums and invests that money, and makes money on those investments.

However, when insurance companies don’t keep their end of the bargain and unreasonably deny or delay claims, they have breached the contract. In every insurance contract, the law presumes that the insurance company will treat the policyholder fairly. In law we call it the “covenant of good faith and fair dealing.” Cases in which insurance companies are sued for their breach of this covenant are also known as “bad faith” cases.

We all pay hard-earned money to insurance companies for the comfort of knowing that if something goes wrong, we have a financial security net that will protect our savings, homes, and prevent us from falling into bankruptcy. If insurance worked properly and insurance companies were guided by fairness and a sense of what is right, it would be a system without lawyers. Unfortunately, insurance companies do not act with a sense of fairness; they are motivated by money and go to great lengths to keep it. Because this is how the insurance companies work, lawyers are the last line of defense for policyholders.

Like most of us who invest in the stock market, insurance companies lose money. This becomes part of the problem. How will the insurance companies make up their losses? One way is to get more policyholders—thus, the incessant television ads and sponsorship of sporting events by insurance companies. The other way for the insurance companies to make money is to pay less money out on valid claims or to delay the claim. The longer the insurance company holds onto money for your claim, the more interest and money it makes. This is where insurance companies have focused their efforts for the last 15-20 years. This scheme is great for insurance companies, and horrible for policyholders who often find that their financial security net is gone when they need it the most.

Claims centers, the place where insurance companies process claims, have been converted into “profit centers.” Claims adjusters do everything they can to offer you as little money as possible to settle a claim—a process widely known as “lowballing.” Practically speaking, insurance companies need to make profits. This article is not intended as some anti-corporation or anti-profit rant. Profits for insurance companies are great. They generate jobs and ensure that there is money to pay claims. My fundamental problem with insurance companies is where and how they are making their billion dollar profits.

“Quest for Gold.” “Bring back a Billion.” “Advanced Claims Excellence or the ACE Program.” There is current litigation across the United States against Farmers, State Farm, and Allstate over these types of programs. Policyholders have sued both Farmers and State Farm claiming that these programs are and were designed to force insurance adjusters to deny or delay claims. In return for denial or delaying of claims, the insurance adjusters received bonuses. In a memorandum dated September 17, 2001, Farmers Insurance explained that “employees whose locations achieve their Quest for Gold goals, will receive 1.25% of their eligible salaries ($100,000 maximum).”

Naturally, the insurance companies claim that these programs were not intended to incentivize their claims adjusters to deny or delay payment on valid claims or to reduce the amount of payments made on valid claims. However, in court case after court case, evidence has been presented that shows these programs were specifically designed to delay or deny valid claims. At the center of the controversy is McKinsey & Co., a New York-based consulting firm that has worked for many large insurance companies, including State Farm and Allstate.

Goods Hands or Boxing Gloves? In 1992, Allstate Insurance retained McKinsey. In fact, “McKinsey’s advice helped spark a turnaround in Allstate’s finances. The company’s profits rose 140 percent to $4.99 billion in 2006, up from $2.08 billion in 1996. Allstate lifted its income partly by paying less to its policyholders. Allstate spent 58 percent of its premium income in 2006 for claim payouts and the costs of the process, compared with 79 percent in 1996, according to filings with the U.S. Securities and Exchange Commission.” You might question how an insurance company can make such a dramatic increase in its profits in just four years.

During court proceedings McKinsey was forced to divulge 13,000 documents relating to the “advice” it provided Allstate. McKinsey told Allstate things like “sit and wait” regarding claims. Delaying claims could, and most likely did, discourage policyholders from pursuing their claims. This delay forced many policyholders to just walk away. One less claim to pay means one thing for insurance companies: more profit. Many of my clients come to me because they “don’t want to deal with the insurance company.” While many of them could not put their finger on how they were being taken advantage of, they just knew it was happening.

Allstate was also advised by

Source: northdenvernews.com

For more information about Bad Faith Laws Passing see: Farmers Insurance Bad Faith Law

These Insurance People (Farmers Insurance) Are Trying To Get Out Of Something

2008-06-18T06:27:00.000-07:00

Robert Ewens awoke early Monday to find water pouring into his home.

Two days into putting a new roof on his house in the 3100 block of South 74th East Avenue, Ewens had nailed tarpaulins and waterproof sheeting to his roof after forecasters predicted rain for Monday.

The storm's high winds blew off the tarps. Then the water came in.

"Inside, it looks like someone got a hold of 1,000 gallons of water and poured it in," Ewens said. "The furniture is sopping and soaking wet. It's pitiful."

He is fighting to get his insurance company to cover the damage.

Although his situation is unusual, Ewens isn't alone. This spring's storms have damaged a record number of roofs.

"More homes are being re-roofed from this series of storms than any other time in Tulsa history," said Neil Cagle, who owns All American Roofing in Tulsa. "It's overwhelming every roofing
company in the city."

Cagle estimated that 25,000 homes in Tulsa will need new roofs, causing a two- to three-month backlog. At this time of year, the normal wait is two to six weeks. Adding to the troubles, storms across the country are driving up the demand for shingles.

"The price of shingles has risen so dramatically and so quickly," Cagle said. "We're paying over 50 percent more for shingles than we were back at the start of the year."

Because of high shingle prices and a shortage of workers, a roof that would have cost $5,000 six months ago might cost $6,800 today. Cagle said many insurers are "dragging their heels" about paying the higher cost, which is causing some homeowners to resort to lower-cost roofers who might not do as good a job.

"There's a lot of guys who just go in and out of business," Cagle said. "Do you think those people will be here after this storm is all roofed up?"

The storm damage is apparently not finished. Tulsa International Airport has received 8.17 inches of rain so far this month, compared with a June average of 4.72 inches, the National Weather Service reported.

That puts Tulsa on pace to break the June record of 14.87 inches. The weather service predicts a good chance of rain Wednesday night and Thursday.

Ewens was replacing his roof because a storm in April damaged his old one. Farmers Insurance Co. had just sent a check for the new roof, which was scheduled to be finished by Tuesday.

Ewens said a Farmers representative told him that the water damage would be added to the existing claim because the new roof was "work in progress."

However, several other Farmers employees told him later Monday that he wouldn't be covered.

"I thought it was the sickest joke you've ever heard," Ewens said. "These insurance people are trying to get out of something."

Craig Dejager, a property claims manager with Farmers Insurance, said Ewens' claim had not been denied. The company will review a recording of Ewens' initial phone conversation with a Farmers representative to see whether he was told something "inaccurate."

"If he was misled, then we'll do the right thing," Dejager said.

Under a normal policy, he said, a homeowner would not be covered unless the storm created an opening in the roof.

A temporary roof usually would not qualify under most policies, he said.

Ewens' case might have to go to mediation offered by the state Insurance Department.

Lance Thomas, a spokesman for the department, said, "A mediation scenario occurs whenever everything else fails.

"We're going to try and resolve it as best we can before it gets to there."

Ewens, who runs a handyman service, said he spent nine years and more than $30,000 remodeling his home's interior. Much of that work was lost in Monday's storm.

He said he did everything he could to protect his house.

"I don't feel like I was negligent in the slightest," he said. "I took care of my property as best as anybody would do."

Source: tulsaworld.com

Farmers Insurance Doesn't Care About Its Customers

2008-06-12T07:37:00.000-07:00

This is an email we received today:

"We have left Farmer's Insurance after 34 years with the company. We had hail last summer & reported a claim. Adjuster who arrived from the south could barely walk since he was soon having surgery. He said that we didn't have hail damage. We were unaware that we could have another adjuster come out to recheck the roof. We were worried about the roof & decided to get it reroofed at our expense. This spring we noticed many houses up & down the street getting new roofs paid for by their insurance companies due to hail damage. We recontacted Farmer's Insurance & were told that they would not reconsider since we had the roof repaired at our expense. By doing that we took away their rights to reexamine the roof. One person that we talked to regarding the denial asked me if we learned something by this episode. My reply - we learned that Farmer's doesn't care about the policy holder, just doesn't want to pay claims. We leaned that Farmers didn't deserve our business any longer & we've dropped them. Meanwhile, all around us roofs are being replaced by many different insurance companies. We feel we had a bum deal & our agent wouldn't even return phone calls to listen to our concerns. Don't know how an insurance company can treat their loyal customers like that!!!!! "

Fifth Circuit Court hears appeal to move Farmers Insurance price-fixing case back to state court

2008-06-06T08:50:00.000-07:00

The Fifth U.S. Circuit Court of Appeal heard arguments Thursday afternoon on whether a price-fixing lawsuit filed in November by former Louisiana Attorney Charles Foti against insurance companies and their vendors should proceed in state or federal court.

The suit, filed Orleans Parish Civil District Court under the Louisiana Monopolies Act, alleges that seven major insurance companies (including Farmers Insurance), their claims adjusting software manufacturers and other associates conspired to artificially depress the price to repair damage from Hurricane Katrina by manipulating construction values in computer programs, enriching insurance companies and leaving Louisiana homeowners without enough money to repair their homes.

Insurance companies successfully removed the case from state to federal court in December, and won a hearing in April that it should stay in U.S. District Court because of the application of a 2005 law known as the Class Action Fairness Act that overhauled the rules for filing class action lawsuits.

The State of Louisiana appealed that ruling by U.S. District Court Judge Jay Zainey in hopes of moving it back to state court.

Insurance companies, who were represented by 35 lawyers from around the country, argued that Foti's suit is actually a class action in disguise, and therefore should be subject to CAFA rules, which means that it must proceed in federal court.

Richard Fenton, an Allstate attorney from Chicago who argued on behalf of all of the defendants, said that the State of Louisiana's name may appear on the suit, but the real beneficiaries are individual policyholders.

"It's a class action," Fenton said. "The real parties at interest are the citizens, who will be the beneficiaries of any recovery."

But Jane Bishop Johnson, assistant attorney general for anti-trust issues, argued that state attorneys general were not intended to be subjected to CAFA rules, and should have the freedom to choose whether to take action in state or federal court to most effectively protect the interests of their citizens and the state's economy.

"They're trying to force us into federal court," Johnson said. "The constitution says the attorney general can file any action he deems appropriate."

The case was heard by a panel of three judges: Priscilla Richman Owen of Texas, who was nominated to the court in 2005 by President George W. Bush; Carl E. Stewart of Louisiana, who was nominated to the court in 1994 by President Bill Clinton; and Leslie Southwick, a former Mississippi judge who was nominated by President Bush last year.

Owen told Johnson that the case represented no threat to the police power of the state, and said that she was confusing questions of power with questions of jurisdiction. "No one's saying the attorney general doesn't have the authority. We're talking about jurisdiction. It's a simple choice of forum," she said.

Southwick, meanwhile, questioned insurer arguments that the case needed to be in federal court because it met the CAFA definition of a class action regardless of whether it actually proceeded as a class action, and pushed Fenton to explain why state court shouldn't be the one to evaluate the substance of the case. "Why isn't that a matter to be determined in state court?" Southwick asked.

Another insurance suit filed by Foti, one that seeks to give the state the power to pursue insurance companies on behalf of the Road Home Program if it appears that grant recipients left money on the table, was moved to federal court. The state failed in its efforts to move it back, and the case is now proceeding in U.S. District Court Judge Stanwood Duval's court.

If the anti-trust suit has to stay in federal court and proceed as a class action, it will be much more cumbersome for the state to prosecute.

Attorney General Buddy Caldwell, who won a runoff election for Attorney General just nine days after the price-fixing suit was filed, told the Baton Rouge Press Club earlier this week that he was awaiting the outcome of this ruling before deciding how to proceed with the cases.

Named in the suit are insurers State Farm Fire & Casualty Co., Allstate Insurance Co., Farmers Insurance Exchange, USAA Casualty Insurance Co., Lafayette Insurance Co. and the Standard Fire Insurance Co., better known as Travelers; software makers Xactware Solutions Inc. and Marshall & Swift/Boeckh LLC; data aggregator Insurance Services Office Inc.; and consulting firm McKinsey & Co. Inc. United States. \\

More information about the lawsuit can be found at Farmers Insurance and Xactware Xactimate

Source: nola.com

Profitable Farmers Insurance "Error" Has Been Going On for A Year And A Half Now

2008-06-04T15:04:00.000-07:00

Susan in Wisconsin was charged an extra $10.30 last October, even though she'd already paid the next six months of her premium in full a month before. "I thought maybe I had misread my initial bill and paid the amount said to be due," she writes. But then it happened again last month, so she began to investigate.

Here's what happened the second time around (emphasis ours):

In March 2008, I received my car insurance premium for six months and again paid the bill in full prior to the date it was due. Subsequently, I received another bill for $11.20 a month later. This time I thought “what is going on here? There is no way I made an error in my check writing again”. I called my agent and discovered the following:

"Their system is supposed to charge an additional 2% when people pay only the minimum due for the six month billing cycle which I believe is half. Unfortunately, their system has a glitch which automatically is charging all customers this additional fee even when paying in full by the date due. Although I am sure that many people catch this problem, I am also sure there are a ton of people who simply pay the extra amount with the assumption that they made an error (as I did the first time). Even worse is that this extra payment was somehow slipped into the financial abyss of the Farmers Insurance agency pocket and not applied to any future premiums. The agent wasn’t even sure if they would be able to refund the erroneously paid $10.30. The agent admitted that this problem has existed for more than a year and a half and that they haven’t been “able” to fix it yet. Sounds like a very lucrative mistake to me, and that lots of unsuspecting people are probably paying a “late fee” that they are not required to."

At what point does an error evolve into a tidy little scam on your customers? How about after you let it go on for a year and a half?

Source: consumerist.com

Oregon Collision Shops Rate Farmers Insurance Among the Worst

2008-05-28T07:14:00.000-07:00

"Collision repair shops on a daily basis see how various insurance companies take care of Oregon drivers after an accident, so we felt it was worthwhile to ask how they rate the various insurers," said Barbara Crest, executive director for the Northwest Automotive Trades Association (NATA), which conducted the survey of Oregon shops. "We believe their views will be helpful to insurance companies and consumers."

About 650 collision repair shops throughout the state received the survey, which asked them to grade the top 22 auto insurers in the state in terms of how well each company's "policies, attitude and payment practices ensure quality repairs and customer service for Oregon motorists."

Farmers Insurance received below-average overall grades of D+ or lower.

"Collision repairers say the insurers receiving the highest grades, which includes both larger and smaller insurance companies - do the best job of taking care of Oregon drivers after an accident," Crest said. "We hope consumers will take these ratings into account when choosing an auto insurer, and that insurers that received lower grades will work to improve their performance."

Source: insurancejournal.com

Farmers Insurance Seeks Rate Increase in California

2008-05-27T07:11:00.000-07:00

Rate increases sought for homeowners insurance
California's three biggest issuers want hikes as high as 9.3%. Insurance chief Steve Poizner's response could affect his political future.

By Marc Lifsher, Los Angeles Times Staff Writer
May 27, 2008

After dropping in recent years, the cost of insuring your home may be about to climb.

California's three biggest insurers, covering more than half of insured homes, have requests for rate hikes pending with Insurance Commissioner Steve Poizner.

How Poizner handles the proposed increases could affect his political future. As the only Republican statewide officeholder, he is being touted as his party's best candidate for governor in 2010.

The wealthy Silicon Valley entrepreneur turned consumer advocate may not want to run on a record of raising insurance premiums paid by millions of homeowners and renters.

"It's going to be very tough for him," said Amy Bach, director of United Policyholders, a national insurance consumer advocacy group. "It's going to hurt him if he approves new rates, and consumers publicize that and are critical of him."

Poizner doesn't fear repercussions from doing whatever he thinks is right, said California Department of Insurance spokesman Darrel Ng. "He is confident that should he decide to run for future political office, his good policies will be good for him politically," Ng said.

Third-ranked Allstate Corp. is seeking a rate increase of 9.3%. Industry leader State Farm General Insurance Co. and No. 2 Farmers Group Inc. are asking for a 6.9% hike.

All three companies have earned solid profits in recent years. In general, insurers say that they need more revenue from customers to cover a jump in the severity of individual claims and inflationary pressures on the cost of rebuilding homes damaged by fires and high winds -- although they didn't offer more detailed explanations for their rate increase requests.

"There's been an increase in materials for rebuilding and remodeling, and labor costs have gone up," said Jerry Davies, a spokesman for Farmers, a unit of Zurich Financial Services.

State Farm spokesman Bill Sirola acknowledges that his company "made significant profits in California between 2003 and 2007" and stresses that "those good times allow us to rebuild the capital we need for the bad times" that are sure to come.

Allstate, which recently limited its potential losses by refusing to take on new residential customers in California, contends that higher rates would enable it to increase its financial reserves so that the company could be prepared for future disasters, such as wildfires or earthquakes.

Consumer advocates counter that California insurers have little basis for raising rates. According to the Department of Insurance, insurers of residential properties paid 71 cents in claims for every $1 in policyholders' premiums last year. Most financial losses had more to do with weak performance of insurer investment portfolios related to the sub-prime mortgage meltdown, consumer groups say.

"Insurance companies are doing badly in the stock market, and they are trying to recoup their losses from policyholders' pocketbooks," said Harvey Rosenfield, the consumer attorney who wrote Proposition 103, an initiative approved by California voters in 1988 that increased government regulation of insurance rates.

Poizner is reviewing all three filings. Last May, however, he hinted he might reject Allstate's proposal and possibly order it to rebate customers should any charges be deemed excessive.

The Allstate filing, the subject of a hearing before a Department of Insurance administrative law judge, was submitted close to the end of former Insurance Commissioner John Garamendi's tenure in 2006.

Garamendi, a Democrat now serving as lieutenant governor, at the time had ordered Allstate, State Farm, Farmers and Safeco Corp. to cut rates because their customers had been filing fewer and less costly claims.

State Farm and Safeco subsequently lowered their premiums by 20% and Farmers reduced its rate by 18%. Only Allstate fought Garamendi, and later, Poizner, by seeking a substantial rate increase.

Sirola, the State Farm spokesman, welcomed the 2006 price cuts and boasted that lower rates would make the company more competitive, especially with Allstate.

But now State Farm and Farmers have changed their tune.

"We see an increase in the cost of claims," Sirola said. "We've tracked these trends over a number of years."

Allstate, meanwhile, said it felt vindicated by its chief competitors' asking Poizner for rate increases.

"It seems to show that this is an issue affecting the industry across the board," company spokesman Peter DeMarco said.

Some consumer activists, who applauded Poizner's tough stand with Allstate, say they're worried the insurance commissioner may be warming to companies' petitions to raise rates. As evidence, they point to new regulations issued last month by Poizner that critics claim were hastily considered and make it easier for companies to win approval for future rate increase requests.

Companies "see an opportunity to make more money from Commissioner Poizner," Rosenfield said. "I think they see a better chance of soaking the policyholder under Poizner than under Garamendi."

As California's insurance regulator, Poizner does not want to prejudge any company's legal filings, said Ng, the state insurance department spokesman.

He says Poizner is committed to approving rates that are fair to insurers and consumers.

"Just because companies ask for an increase doesn't mean it will be granted," Ng said.

marc.lifsher@latimes.com

Source: latimes.com

Farmers Insurance Asks For Biggest Rate Increase in Kansas

2008-05-25T07:12:00.000-07:00

Auto, home insurance premiums on the rise

BY DEB GRUVER

Auto and homeowners insurance premiums are rising in Kansas, with several of the biggest companies asking for -- and getting -- rate increases since the first of the year.

The Eagle on Friday obtained rate revisions granted by the Kansas Insurance Department since Jan. 1. The filings show that among insurance companies that filed for rate changes, most increased premiums.

The average rate increase granted to auto insurance companies was 6.1 percent. The average increase granted for homeowner insurers was 7.5 percent.

On the homeowner side, Farmers Insurance Co. asked for the biggest increase, an average 14.1 percent, which took effect May 16.

The reason for the rate increase is simple, said Farmers spokesman Jerry Davies.

"Overall, we've seen a rise in claims and a rise in claim costs," he said. "With the economy today, the cost to rebuild" and make repairs is higher.

Farmers is the third-largest homeowners insurance company in the state.

Farmers received a 3 percent average rate increase for auto insurance Jan. 1, and a 4.7 percent average increase will take effect July 1. On the auto side, the biggest increase was for Allstate Fire and Casualty, whose 14 percent average increase will take effect June 2. Allstate Property and Casualty was granted an 11.2 percent average increase effective the same day.

Allstate is the ninth largest company for auto insurance in Kansas.

Allstate Indemnity Co. and Allstate Property and Casualty Insurance each raised homeowner premiums an average 12.7 percent on May 19.

"Homeowners and auto insurance rates in Kansas appear to be trending up, but companies believe their increases are necessary to maintain their financial stability so they can continue to offer products in our state," said Bob Hanson, a spokesman for the Kansas Insurance Department.

To be considered for a rate increase, companies must submit five years' worth of premium and loss data that justify raising premiums. Companies can ask for a rate adjustment at any time, but increases are not automatic.

"We want to make sure we have the ability to take care of our customers," said Christina Loznicka of Allstate.

Reach Deb Gruver at 316-268-6400 or dgruver@wichitaeagle.com.

Source: kansas.com

Farmers Insurance Policy Didn't Cover Groundwater and Mudslide Damage

2008-05-22T08:00:00.001-07:00

Are You Covered?: Insurance for Storms

A warning to all homeowners: with the start of hurricane season and summer storms it's time to think about your insurance and what it may or may not cover if something happens to your home.

We all think it will never happen to us. But when it does, we realize it's too late to do anything about it. For one local woman, the damage in done. But as she works to pick up the pieces she hopes her story will encourage others to think "what if that were me."

"I felt my bedroom shake and tremble," remembered Mary Gordon Hall. The storm that hit Charlottesville earlier this month caused major damage to her Batesville home.

She continued, "There were cinder blocks mud deep, and there was no wall. The wall had been blown out."

Water pressure that had built up behind a wall in the basement became too much. Gordon said, "Everybody's faces were always 'whoa.' I could tell by the walk around and the things they said and the way they reacted to my house that this was pretty serious"

Structural engineers have determined house is unsafe to live in. Gordon has been staying with a friend for the past two weeks and it's unclear if she'll ever be able to move back home.

Gordon filed a claim with Farmers Insurance. Turns out, she isn't alone. Farmers Insurances' Rico Metzroth shared, "Just in those few days, May 8th, 9th and 10th, we had slightly over a 100 needs. So we were here meeting with our customers."

Investigators determined she's dealing with groundwater and mudslide damage. Nothing is covered. An earthquake policy would have been the only thing that could have helped.

"The typical consumer would not think of buying that type of policy. They would not even think of earth movement as being part of that policy," stated Metzroth.

For things to get back to normal, land must be moved, the basement will be demolished and a wall re-constructed. That work is estimated to cost $30,000 to $40,000.

"You know it's one step at a time," said Gordon. "I just have to wait and see. Hopefully, I'd feel safe when it's all fixed."

Gordon says the one positive thing that's come out of this ordeal is the community support. She told us everyone from the school where she works and her friends have been unbelievable. She also said they're all checking their policies as well.

We know there is a lot to this issue and the details can get tricky. We have additional information here in a Word document that can help answer any further questions.

Reported by Jenn McDaniel
Source: nbc29.com

Accidental Fire, Farmers Insurance bills fire victims $420,000

2008-05-22T07:52:00.000-07:00

By Tracy Vedder

UNIVERSITY PLACE, Wash. -- First a devastating fire robbed a local family of nearly everything. Then a big insurance company tried to take the rest and more, hitting the family with a bill of $420,000.

Last October Chris Christoffersen and her daughter Melissa awoke to devastation. The apartment complex they lived in was engulfed in flames.

"I watched everything from throughout my life - gone. Gone in just a few seconds," she said.

Now their furniture, TV, computer and even their clothes consist of second-hand donations.

Things were looking up until the family got a phone call from Farmers Insurance, which insures the apartment complex.

Farmers wanted $350,000 to repair the four units damaged in the fire.

"(I thought) I just lost everything in a fire five months ago and you want $350,000 from me?" Christoffersen said.

The University Place Fire Department ruled the fire accidental. The fire had it started in the area where Christoffersen's couch was pushed against the baseboard heater.

"These things happen, they're accidental. It's just the way it is and there was no malicious intent discovered at all," said Asst. Fire Chief Dave Dupille.

Then Christoffersen got her first and only bill from a collections agency demanding that she pay $420,000.

She was obviously shocked, but neither the apartment management company nor the fire department has ever heard of an insurance company going after a tenant to pay for an accidental fire.

"It's not a reasonable thing that I've ever heard of, no," said Dupille.

The Problem Solvers contacted Farmers for an explanation. Two days later Farmers decided that "after consulting with our claims department... (we've) chosen not to pursue the matter."

"Relief! I'm just absolutely relieved that that's just done," said Christoffersen.

Now the family can concentrate on getting their lives back to normal.

The state insurance commissioner told the Problem Solvers that Washington courts have ruled that insurance companies cannot hold tenants responsible for fire damages unless it's expressly written in the lease.

Watch the Video at KOMOTV

Oregon Farmers Insurance Lawsuit Overturned

2008-05-09T12:25:00.000-07:00

In another ruling involving health care providers, the Supreme Court overturned the dismissal of a lawsuit against Farmers Insurance Co. for denying medical payments.

In a dispute over medical payments for traffic accident claims, the Supreme Court overturned the Oregon Court of Appeals and sent a lawsuit against Farmers Insurance Co. back to Multnomah County Circuit Judge Jean Kerr Maurer.

Five customers with automobile insurance policies sued Farmers, claiming it wrongly denied their medical costs resulting from traffic accidents because Farmers used a computerized review system instead of conducting an individual medical examination.

The court ruled that when a health care provider submits a claim for medical expenses it is presumed to be reasonable and necessary, and it is up to the insurance company to prove otherwise.

The court said the Legislature prohibited insurers from denying payment of claims without conducting a "reasonable investigation" of those claims, and the computerized review did not meet that requirement.

Justice Thomas Balmer noted in a separate opinion that the claim was part of a class-action effort to challenge similar practices by large insurance companies across the country.

Read Full Article

Foremost Insurance Company and Farmers Insurance Company ask Arkansas judge to remove himself from litigation

2008-04-09T22:00:00.000-07:00

Insurance companies ask Arkansas judge to remove himself from litigation

4/9/2008 8:54 PM
By Michelle Massey, Texarkana Bureau

Arkansas Circuit Court Judge Kirk Johnson
TEXARKANA, Ark. -- Defendant State Farm Insurance Company has filed a motion to recuse Arkansas Circuit Court Judge Kirk Johnson from ongoing proceedings in a class action case that accuses insurance companies of conspiring "to create, execute, enforce, and maintain" an unjust overhead and profit scheme.

The original lawsuit, filed Sept. 8, 2004, alleges claims of civil conspiracy, unjust enrichment, fraud, and constructive fraud by accusing the insurance companies of not disclosing or paying to the insured's the general contractors' overhead and profit, whenever the repair of an insured's loss required the services of at least three trades.

Although previous damage claims were paid by the insurance companies, the plaintiffs argue they are entitled to the additional general contractors' overhead and profit, the paid-for- benefit is 20 percent of the estimated job or construction cost.

Plaintiffs are seeking less than $75,000 total recovery for each plaintiff or potential class member.

State Farm filed the motion to recuse under court seal on March 13. Defendants Foremost Insurance Company and Farmers Insurance Company have joined with State Farm's motion.

The joinder motion focuses on five homeowner property damage claims that Judge Johnson filed during the relevant time for the class action. The defendants believe that the personal knowledge the Court obtained from these claims will cause him to lose impartiality.

Foremost states that "because the impartiality of a judge who has personal knowledge of disputed evidentiary facts might reasonably be questioned, the Court should recuse itself from this matter in its entirety."

The motions state that the Judge's previous claims could "create in reasonable minds a perception that the judge's ability to carry out judicial responsibilities with integrity, impartiality and competence is impaired."

The motions to recuse follow a letter from Judge Johnson responding to Chicago attorney James Gaughan, in which the Judge discusses his 25-30 year relationship with State Farm for automobile and homeowner's insurance coverage.

Judge Johnson states he believes he would not be a potential class member "because I don't recall having three or more tradesmen involved in the repair work." For two particular claims, the Judge tells the attorney that the requests do not constitute claims as he only made inquiries regarding the damage to his home and other structures and did not receive compensation.

Although the original letter from the attorney is not on file with the circuit clerk's office, Judge Johnson's reply indicates attorney Gaughan did not ask for recusal but even if he did, Judge Johnson states he does not believe the Arkansas Code of Judicial Conduct would require his recusal.

Further, Judge Johnson states Arkansas judges are routinely excluded from settlements in class action cases. Continuing, the Judge states that he does not hold any ill feelings about State Farm and will waive any rights he or his family might have as a class member.

The motion to recuse follows an intense ongoing discovery dispute between the parties. Recently, the plaintiffs filed a motion to disqualify Foremost Insurance Company's attorney Richard Griffin and his law firm Jackson Walker LLP.

The plaintiffs' argue disqualification is necessary because Griffin acted as a witness and an advocate, violating Arkansas Rules of Professional Conduct by filing an affidavit relating to the burden and expense of Foremost Insurance Company producing claim files.

Griffin responded to the motion arguing that the affidavit at issue only deals with possible attorney fees, "that would be incurred responding to Plaintiffs' overbroad and premature class-wide discovery requests, a clear exception to the lawyer-witness rule."

Moreover, Griffin's response states "just like Plaintiffs' abusive discovery requests - which required Foremost to quantify the fees and costs that would be incurred as a consequence - Plaintiffs' actions here once again smack of tactical litigation."

Chivers v. State Farm. Case No: 2004-294-3.

Source: http://www.setexasrecord.com

Farmers Insurance Oklahoma Class Action

2008-03-31T20:28:00.000-07:00

Court Authorized Notice to Oklahomans - Who Had Homeowner's Insurance Issued by Farmers - About Their Rights in a Class Action Lawsuit
By District Court of Comanche County, Oklahoma

LAWTON, Okla., March 31 --A statewide notice program authorized by the District Court of Comanche County, Oklahoma began today in order to issue notices to those who had homeowner's insurance issued by Farmers Insurance Company, Inc. and Farmers Insurance Exchange (the "Defendants") after June 14, 1994. The notices are a result of the Court establishing or "certifying," in August 2003, a class action lawsuit about whether the Defendants improperly withheld payments for general contractor's overhead and profit ("O&P") from amounts paid on claims under homeowner's insurance policies to citizens of Oklahoma.

The lawsuit is called Burgess et al. v. Farmers Insurance Company, Inc. et al., No. CJ-2001-292. The lawsuit includes all citizens of Oklahoma who were or are Farmers homeowners' policyholders who: (1) suffered a covered loss to their home from June 14, 1994 to the present; (2) whose loss was adjusted on an actual cash value ("ACV") basis; (3) whose claim files indicated the anticipated involvement of three trades or more in the repair of the property at the time of the ACV adjustment; and (4) whose ACV adjustment did not include a 20% payment for O&P. Generally, a claim was adjusted on an ACV basis if the initial payment from the Defendants for the covered loss had depreciation taken out. Depreciation is a decrease or loss in value that occurs because of age or wear.

The lawsuit says that the Defendants intentionally underpaid the homeowners' claims of thousands of Oklahomans by failing to provide them a payment for O&P. The Plaintiffs' claims are based on the contention that there is an industry standard three trades rule which requires payment for the services of a general contractor when three or more trades are anticipated in a home repair. The Defendants deny they have underpaid any homeowners' claims, or that they failed to provide homeowners insureds with any relevant information concerning coverage. It is the position of the Defendants that there is no industry standard three trades rule, and that the determination of whether, and when, O&P is reasonably likely to be incurred depends upon a number of different factors in addition to the number of trades. The lawsuit seeks money or benefits for the Class.

The Court has not decided whether the Class or the Defendants are right. The lawyers for the Class will have to prove their claims at a trial. The Court appointed the following lawyers from Oklahoma to represent the Class as "Class Counsel": Reggie Whitten and Michael Burrage of Whitten, Burrage, Priest, Fulmer, Anderson & Eisel; Jason Roselius and Derrick Morton of Nelson, Roselius, Terry, O'Hara & Morton; and Terry West and Bradley West of The West Law Firm.

Those who wish to remain members of the Class don't have to do anything at this time and will be informed about any claims process that results from the trial or any proposed settlement. Class members will be bound by all orders and judgments of the Court.

Class members may exclude themselves from the Class. To do so, they must mail a letter stating that they want to be excluded from Burgess v. Farmers Insurance Company, Inc., and include their name, address, telephone number, and signature. Exclusion requests must be postmarked by May 16, 2008, and sent to Burgess Exclusions, PO Box 6336, Portland, OR 97228-6336. Class members who exclude themselves from the Class cannot participate in any recovery for the Class, and will not be bound by any court orders or judgments.

For more information and a detailed Notice, Class members may write to the above address, or see the website at
Burgess v. Farmers Insurance Company (Oklahoma Class Action)

SOURCE District Court of Comanche County, Oklahoma

Plaintiffs: Derrick Morton of Nelson, Roselius, Terry, O'Hara & Morton, +1-405-705-3600; Defendants: Thomas T. Rogers of Jackson Walker L.L.P., +1-512-236-2030,

Prepairing To Deal With Farmers Insurance

2008-03-28T08:51:00.000-07:00

I recently went through a grueling homeowners claim with Farmers and wanted to share the lessons I learned in hopes that it may help someone else. As a disclaimer, everything in this and subsequent posts are my opinion and are intended for informational purposes only.

Before my claim, the extent of my knowledge of my insurer was a basic comprehension of the Declaration Page of our policy and knowing when the premiums were due. After seemingly countless hours of research, hours which Farmers philanthropically provided us by trying to screw us for six months, I believe we know a little more now.

We were fortunate in the respect that my wife has an extensive accounting and computer background and I have an extensive construction background. Were it not for these factors, we might not have realized the CRT (Catastrophe Response Team) estimate was 110% low.

So, what does one need to know, when entering into a negotiation with Farmers?

First I would like to suggest a small visual aid exercise. Walk outside.Turn back and look at your home longingly. This will help you get used to the fact that you will not have your home for some time to come. Next, find the smallest pebble on your property. Take your time and look well for the smallest one. This will teach you patience. You will need this, lots and lots of it. Take your pebble and walk to a point where you are in front of the hardest wall of your home. In fact, circle the house many times. This will prepare you for Farmers answers to your questions. When you are in front of the hardest wall, throw the pebble at the wall. Pick a wall that was not damaged in your loss, because your policy clearly states that Farmers Insurance group will not pay for any subsequent damage, such as rats getting in through blown out walls and chewing wires, mold grown because of time delays in getting fair compensation for the loss, walls dented from thrown pebbles…that sort of thing. Walk over and pick up your pebble. Walk back to the point where you threw your pebble from. Throw it again. Repeat this process until you are at a point of frustration such as you have never felt before. Walk over and pick up your pebble. Throw it at the wall again. Repeat this process until you ask yourself in your very soul ‘why am I doing this?’ Walk over and pick up your pebble. Farmers will not pay for any cleanup not Directly related to loss damage.

Second thing in your preparations, gather your family around you. Hug them with passion and deep feeling. Look each one of them in the eye and assure them that anything you will call them five months from now, you do not mean it and sincerely regret doing so. Kiss each one of them good bye, as you will now be busy. Don’t forget to wish little Suzy well on those extended 6th grade projects she gets in preparation for Jr. High, that your should be monitoring her weekly progress on. Your life will now become about numbers, lots and lots of numbers.

This brings us to the Third preparation. Buy new, or put fresh batteries into an existing fully functional calculator. You will need it. Farmers, and this is only an opinion, does not buy new, nor puts fresh batteries into existing calculators. Become more familiar with Excel. It will help. Buy extra ink cartridges. Better yet, buy a laser jet. I could go on here about ALE (Additional Living Expenses) Worksheets, Xactimate Estimates, Supplemental Worksheets etc., but they will be addressed in later posts. Suffice it to say; before it’s all over, you may look at your calculator as you do your spouse, in both the good and bad ways. If that happens do not feel ashamed or guilty. Those feelings will pass.

Fourth, go to your favorite literary purveyor, and purchase a copy of ‘R.S. Means Residential Repair & Remodeling Costs’. Yes, it’s expensive. Yes, as you thumb through it in the book store, it may read like the Iliad in its native tongue. Trust me, it will help you. You can always put it out at the yard sale after your claim is settled. I guarantee you some small contractor will snap it up, after he gets over his disappointment that you don’t have any power tools for sale. Farmers will tell you their estimate is full, complete, priced for your market, compiled from the ‘industry standard in estimating software’, and that they love you and want to bear your children. It’s all bull. R.S. Means is and has been the construction industry standard for the past 60 years. Xactimate, Farmers estimating program is made up of imaginary numbers no honest, quality minded contractor could charge and sustain any longevity in the market. (The preceding statement is an opinion, and in no way constitutes an intentional threat to the Xactimate Estimating Program, its creator Xactware, nor Xactware’s parent company, Insurance Solutions Office)

Lastly, again go outside, if you have since returned indoors after your pebble exercise. Look up at the sky. Try to convince yourself the sky is green. Really work at it…no, really. Stop this exercise just short of having convinced yourself. We don’t want you to permanently go over to the dark side. This will greatly aid you in your future conversations with representatives of Farmers Insurance Group. It will help you understand what they are trying to tell you.

Completing these steps, you are now ready to learn the logistical skills needed to negotiate your claim to a fair settlement…

Although this was somewhat tongue in cheek, it is a fairly accurate portrayal of what it is like to deal with Farmers Insurance Group. Please do not be daunted by it. It is possible to get a fair settlement. You will have to fight for it. It will take you a long time. To be successful, you will have to put your normal life on hold. You will get frustrated, you will be demoralized. Your relationships will suffer. Farmers Insurance Group counts on these things. I can’t give you a date, but it has been a long time since Farmers, and several other major insurers have laid aside their responsibilities to policyholders and discarded fiduciary ethics. Until our national and state legislators pass the anti-trust laws necessary to reign in these obscene attitudes and practices, it is up to us as individual policyholders and contractors to fight for what is rightfully ours, to be treated fairly and with good faith.

I wish I could go back to when all I needed to know was when our premium was due. I can not. We are forced to buy insurance. We can not buy a home without it. We can not drive without it. We need to know that in our most trying times. When a loved one is injured, when the vehicle we use to support our families is disabled, when our homes can not be lived in, that our needs will take precedent over extra profit for a shareholder. What Farmers Insurance Group, and several other insurers are doing is wrong. Not a ‘little wrong’, not’ kinda wrong’, not ‘gee, this is pretty wrong’. It is WRONG. For a company, whose duty it is to ease the loss of one’s life, health , and or possessions that one has worked and struggled for, to add obstacles, stress, and heartache to what can already be a catastrophic, devastating, or even just a challenging event in a family’s life, simply to increase their financial portfolio is unconscionable.

Copied from the Farmers Insurance Forum

California Court Allows Policyholders To Question Farmers Insurance Fees

2008-03-25T06:55:00.000-07:00

By Patricia-Anne Tom
March 25, 2008

A California Court of Appeals has allowed policyholders in the Farmers Insurance Exchanges to question alleged excessiveness of management fees charged to them by Farmers Group Inc., a wholly owned subsidiary of Zurich Financial Services.

In Benjamin J. Fogel, et al.,v. Farmers Group Inc., et al., the plaintiff holds automobile, homeowners, and umbrella insurance policies issued through Farmers Insurance Exchange, Fire Insurance Exchange, and Truck Insurance Exchange (collectively the Exchanges).

The Exchanges are reciprocal insurance exchanges, which according to court documents, are "'an unincorporated business organization of a special character in which the participants, called subscribers ... are both insurers and insured; for their mutual protection, they exchange insurance contracts through the medium of an attorney in-
fact.'"

In August 2003, Fogel, on behalf of all policyholders of the Exchanges, filed a class action lawsuit against Farmers (which Fogel alleged was the attorney-in-fact for the policyholders of all three Exchanges) and the Exchanges. The original complaint alleged that the Exchanges required all policyholders to appoint FGI as their attorney-in-fact and that FGI breached its fiduciary duty to the policyholders and committed fraud by, among other things, charging excessive fees. The original complaint also alleged that FGI and the Exchanges engaged in unlawful and/or unfair business practices within the meaning of Business and Professions Code section 17200 et seq., based upon two practices -- the Exchanges' requiring policyholders to appoint FGI as their attorney-in-fact and FGI's charging excessive fees -- as well as other conduct.

The class action suit filed in 2004 by Fogel claims that FGI and its subsidiaries paid themselves more than $4.5 billion in fees in the 2000 to 2002 time period, resulting in at least a 43 percent profit over the costs of the services that FGI provided the policyholders. Fogel sought disgorgement of all excessive fees charged from 1999 to the present and an injunction against future excessive charges.

However, the defendants emphasized that FGI, doing business as Farmers Underwriters Association, was attorney-in-fact only for Farmers Insurance Exchange policyholders, and that Truck Underwriters Association and Fire Underwriters Association serve as
attorneys-in-fact for policyholders in Truck Insurance Exchange and Fire Insurance Exchange, respectively. According to court documents, "One of the other arguments they made in the motion was based upon the form 'Subscription Agreement' that defendants asserted each of the policyholders signed when they applied for insurance." Each agreement provided that the relevant entity was appointed as the policyholder's attorney-in-fact, described the scope of its power to act on behalf of the subscriber, and stated that the subscriber agreed that the entity would collect a certain percentage of the premium as compensation for acting as attorney-in-fact. The defendants argued that FGI did not breach its fiduciary duty because it was undisputed that it collected less than 20 percent of the premiums as fees during the period at issue.

The recent court of appeals ruling rejected FGI's argument that the fees had been approved by the California commissioner of insurance as part of the rate requests FGI files on behalf of the insurance exchanges it manages. The court held that FGI and its subsidiaries owe a fiduciary duty to the Exchanges' policyholders and must answer allegations that it has overcharged them for its services by several billion dollars since 1999.

"We hold that neither Walker, section 1860.1, nor the filed rate doctrine apply to this lawsuit against the attorneys-in-fact, because the attorneys-in-fact are entities distinct from the exchanges, with fiduciary relationships with each of the subscribers. Accordingly, we reverse the summary judgment in favor of the attorneys-in-fact and direct the trial court to enter an order denying defendants' motion and granting plaintiff's motion to summarily adjudicate defendants' exhaustion of administrative remedies
affirmative defense," the court of appeals said.

Acting Presiding Justice Thomas L. Willhite Jr. issued the ruling which was concurred in by Justice Nora M. Manella and Justice Steven C. Suzukawa of the California Court of Appeal, Second District, Division 4, Los Angeles.

Fogel was represented by Austin attorneys Philip K. Maxwell and Joe K. Longley, and Los Angeles attorneys Tom Girardi and Walter Lack.

FGI was represented by Raoul D. Kennedy of Skadden, Arps, Slate, Meagher & Flom LLP, San Francisco.

Sources: California Courts, Law Offices of Philip K. Maxwell

http://www.insurancejournal.com/

Insurers' profits in Texas prompt calls for lower rates

2008-03-22T14:55:00.000-07:00

Insurers' profits in Texas prompt calls for lower rates

Earnings defended as reserve for Texas storms

12:00 AM CDT on Thursday, March 13, 2008
By TERRENCE STUTZ / The Dallas Morning News
tstutz@dallasnews.com

AUSTIN – Texas insurers were virtually untouched by the slowing economy in 2007 as they recorded one of their most profitable years of the decade, prompting new calls for tougher state action on homeowner rates.

New financial reports released Wednesday by the Texas Department of Insurance indicated that most companies had another year of solid earnings as they marked their fifth straight year of beating or equaling a standard benchmark for reasonable profits.

Overall, the industry had an average loss ratio of 36.5 percent in 2007, according to the reports. In other words, insurers paid out 36.5 percent of premiums to cover property losses – well below the 58 percent figure often cited by experts as a good measure of profitability.

Industry representatives said a few good years of profits offset the poor years that companies suffered in the early part of the decade and emphasized that insurers need to build up reserves for inevitable losses that will occur when hurricanes or hailstorms hit Texas in the future.

But consumer groups called the low loss-ratio numbers "outrageous" and further proof that companies are continuing to overcharge Texans for insurance on their homes.

"Homeowners deserve better treatment than this," said Alex Winslow of Texas Watch, a consumer group active in insurance issues.

"Insurance companies are continuing to post exorbitant profits in large part because the Texas Department of Insurance refuses to get tough. Policyholders are sick and tired of lip service. They want action."

Industry cites overhead

Industry spokesman Jerry Johns, president of the Southwestern Insurance Information Service, said the 36.5 percent loss figure reported by the insurance department is misleading because it does not take into account expenses such as agent commissions, overhead, administrative costs and other expenses.

"That percentage doesn't take into account an enormous amount of overhead for insurers," he said.

In 2006, the industry said those expenses took another 30 percent of the premiums they collected. If that figure holds up for last year, it would result in a combined expense and loss ratio of around 66.5 percent.

Mark Hanna of the Insurance Council of Texas said insurance companies rely on good years to prepare for years of widespread property damage, primarily from hailstorms in North Texas and hurricanes along the Texas coast.

"A good year for Texas insurers means homeowners weren't clobbered by tornadoes, hurricanes and hailstorms," he said. "It means insurers will be in good financial shape when Texas, which has some of the most violent weather in the world, faces this year's spring and summer thunderstorm season."

Public Insurance Council Rod Bordelon, who represents consumers in rate cases, said his office is considering asking state Insurance Commissioner Mike Geeslin to order rate reductions.

"The new figures indicate that insurance companies in Texas are again earning record profits, and we need to see some rate decreases. Certainly, there is justification for the commissioner to consider rate decreases," he said.

State Farm, the largest insurer in Texas, has been fighting the state in court since fall 2003 over an order to decrease its homeowner premiums by an average of 12 percent. Some experts have estimated that the company owes its customers more than $600 million in overcharges since that time – but the company insists its rates have been fair and reasonable.

In 2007, State Farm was slightly above the average loss ratio in Texas, paying 39.2 percent of its premiums to cover losses. The two other largest companies in the state, Allstate and Farmers, were near the state average.

'File and use' system

Texas uses a "file-and-use" rate system for auto and home insurance that allows companies to immediately increase premiums – without state approval – once they notify the Texas Department of Insurance. The department can challenge any increase it deems excessive.

State Farm and Allstate have been placed under state orders that require them to get approval from the state before they can raise rates. Allstate, like State Farm, has been at odds with state regulators over what it charges for homeowners coverage.

The file-and-use system was approved by the Legislature in 2003 after the home insurance market in Texas was rocked by massive losses related to mold and water damage. To ease an insurance availability crisis, lawmakers opted to give companies more freedom in setting rates and thereby encourage more companies to sell policies in Texas.

However, the number of insurers selling policies in Texas has not increased appreciably since the law took effect.

Ben Gonzales, a spokesman for the insurance department, noted that the agency reviews all rate filings by companies. "If we find a company that is charging excessive rates, we have tools to bring them back in line," he said.

While the department reviewed company-by-company rates last year after very low loss ratios – and high profits – were reported by insurers, no companies were ordered to lower their rates as a result of the reviews. No similar reviews have yet been announced for this year, Mr. Gonzales added.

"Companies have not suffered any major catastrophic losses the past few years, and that is a major factor in the loss ratio numbers," he said. "But it won't be that way forever, and we don't want to be in position where we cause a lack of availability of insurance."

Even with the better claims experience in 2007, Mr. Johns noted, Texas still ranked third among the states in weather-related losses at $677 million. Only California and Minnesota had greater total losses.

In Dallas, the current average premiums for a $100,000 brick veneer home with a 1 percent deductible and $40,000 coverage on contents are about $803 a year for a 6-year-old house and $892 for a 15-year-old house. For a frame home, the average premiums are $950 for a 6-year-old house and $1,054 for a 15-year-old house.

http://www.dallasnews.com/

Farmers Insurance to raise rates on homeowner policies

2008-03-22T14:42:00.000-07:00

Farmers to raise rates on homeowner policies

By Laura Elder
The Daily News
Published March 19, 2008

Farmers Insurance intends to raise rates on a relatively new line of homeowner policies, a move that would increase premiums for some property owners in the county by 4.1 percent on average.

The planned increase comes as insurers, including Farmers, posted another profitable year of underwriting in Texas.

Effective May 16, Texas Farmers Insurance Co. will impose the increase on consumers who have a “Texas Family Home Policy,” which offers broader coverage than other Farmers’ lines and which the company introduced in Feb. 2006.

The amount of Farmers’ rate increase varies, but statewide the average is 7.9 percent, officials say.

The rate hike is meant to cover the insurer’s increased expenses caused by the rising cost of construction, reinsurance and growing loss trends, said David Bishop, a Farmers spokesman. Reinsurance allows insurers to buffer their risk by purchasing their own coverage against weather-related catastrophes.

The latest rate increase affects about 200,000 of Farmers’ 700,000 policyholders in the state who have coverage through the company’s Texas Family Home policies, Bishop said.

Two other subsidiaries of the insurer — Farmers Insurance Exchange and Fire Insurance Exchange — raised rates Feb. 1 resulting in average rate increases of between 14 percent and 16 percent for county residents.

Farmers has more than 10,700 policyholders in Galveston County. Farmers does not make available the number of county residents who have Texas Family Home policies.

Farmers also is raising rates to ensure financial stability and its ability to write new business, Bishop said.

He pointed to the freak thunderstorms and tornadoes that slammed parts of Georgia earlier this month, killing at least two people and causing an estimated $150 million in damage, according to reports.

“That could have been Texas,” Bishop said.

Insurers make money by underwriting and investing money they collect in premiums.

Underwriting in Texas was profitable last year, according to regulators at the Texas Department of Insurance.

Farmers, for example, posted a loss ratio of 38.7 percent.

The loss ratio is the amount of each premium dollar insurers pay back to policyholders in benefits. The lower the loss ratio, the better for the insurer.

The loss ratio does not include overhead expenses, which typically is another 30 percent to 35 percent, according to insurers.

In 2007, the industry in Texas reported earned premiums of nearly $4.9 billion and direct incurred losses of about $1.8 billion, resulting in a loss ratio of 36.5 percent, according to industry regulators.

Add in overhead expenses, and for each dollar of premium the industry collected in Texas, it paid out almost 71 cents, according to regulators.

Still, underwriting in Texas isn’t always profitable. The years 1992, 2001 and 2002, the industry collectively posted underwriting losses, according to state regulators.

While Farmers’ latest rate increase goes into effect in May, the insurer could have imposed them immediately upon submitting the plan to the state.

But most insurers try to give the state time to review the filings.

If the state deems the new premiums to be excessive, the company could be forced to offer refunds to consumers.

Farmers filed its intentions with the state to raise rates on Friday. Regulators still are reviewing Farmers’ filing.

The state did not oppose rate increases by Farmers Insurance Exchange and Fire Insurance Exchange.

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2007 Preliminary Loss Ratios

Here are the 2007 preliminary loss ratios for the top 10 insurers doing business in Texas. A loss ratio is derived from what insurers took in through premiums and what they paid out in claims.

For example, a loss ratio of 40 percent means that for every dollar collected in premiums, the company paid out 40 cents in claims.

The figures in this list do not include overhead expenses, which the industry and regulators say amount to another 30 percent to 35 percent.

Company, Direct Written Premium, Loss Ratio

State Farm Lloyds, $1.5 billion, 39.2 percent

Allstate Texas Lloyds, $630.07 million, 32.8 percent

Travelers Lloyds of Texas, $276.7 million, 25.2 percent

Texas Farmers Insurance Co., $250.05 million, 38.7 percent

USAA, $220.6 million, 40.7 percent

Farmers Insurance Exchange, $214.5 million, 33.7 percent

USAA Texas Lloyds, $171.1 million, 39.1 percent

Texas Farm Bureau Underwriters, $128.9 million, 46.6 percent

Chubb Lloyds, $117.1 million, 26.5 percent

Fire Insurance Exchange, $115.7 million, 42.4 percent

Source: Texas Department of Insurance

http://galvestondailynews.com/

http://www.star-telegram.com/

http://insurancenewsnet.com/

Goddard v. Farmers Insurance: Farmers Insurance to Pay $2.5 Million in Punative Damages

2008-03-11T06:17:00.000-07:00

This case has been going on for about 20 years!! Farmers Insurance lowballs and fights tooth and nail to deny you what you are owed. In this case, Goddard v. Farmers Insurance, Farmers Insurance denied the $200,000 and now has to pay $2.5 million! They did get the punative damages reduced from $20 million.

"In Goddard, the court found that the insurer intentionally, deceitfully, and maliciously:
stonewalled the claimant and lowballed settlement offers;
fraudulently manipulated the claims process;
unreasonably refused to settle;
sacrificed the insured’s interest in security to the insurer’s interest in maintaining its reputation for toughness on claims;
all of which the court found to be typical of the insurer's business practices."

For Details of this case see:
* Goddard v. Farmers Insurance

* The Oregon Supreme Court's Recent Decision on Punitive Damages: Why It Took the Wrong Approach

* Oregon Supreme Court rules punitive damages excessive

Louisiana Attorney General Files Suit Against Farmers Insurance

2008-01-09T09:59:00.000-08:00

Louisiana Attorney General Charles C. Foti, Jr. announced today that his office has filed suit against Farmers Insurance and other insurance companies. The petition, filed in New Orleans Civil District Court, alleges Farmers Insurance et all participated in an on-going scheme to rig the value of property damage claims paid to their insureds. "They allegedly used damage-estimating software programs to engage in horizontal price-fixing as well. The combination allegedly artificially held down property damage claim payouts with the intended goal of increasing the profits of each company involved."

“This alleged scheme gave insurers an unjust advantage over policy holders, which they used before, during and after one of the greatest disasters this country has ever suffered, by reaping huge profits from the misfortunes of persons whom they pledged to protect from the risk of loss. I believe this unjust advantage resulted in the unjust enrichment of themselves to the detriment of the state, policy holders, and commerce in Louisiana,” stated Attorney General Foti.

Farmers Insurance v. Louisiana (Xactware/Monopoly Lawsuit)

Source:allamericanpatriots.com