Thursday, February 11, 2010

Do you have to contact the media before Farmers Insurance will pay your claim?

Molly McClure came home to find her heavy metal patio cover collapsed under the weight of ice and snow. The attached awning brought the backside of her roof soffitt down with it.

Molly said, “From corner to corner it’s along the whole backside of the house that’s damaged.” The real split was between Molly and Farmers Insurance after the adjustor denied her claim.

Molly said, “I’m shocked it’s not covered. I can’t believe they wouldn’t cover that because it’s obvious there is damage to the house.” The denial letter implied the awning doesn’t have walls so is not considered a structure.

Faced with $6,600 in repair costs, Molly and her father Dale have argued with Farmers Insurance representatives for three weeks. Six On Your Side contacted the media Vice President for Farmers in Los Angeles Jerry Davies, and e-mailed photos of the damage to him.

Within 12 hours Dale McClure received a call from his local agent. Dale said, “Our agent said we won which is a good thing. Its what we wanted to hear.”

Molly has been told Farmers will replace her awning, repair the soffitt and even compensate her neighbor who spent three hours helping her raise the roof soffitt.

In a statement Jerry Davies of Farmers Insurance said, “Farmers claims executives visited with the agent and went to the customer’s home for a review of the claim. After further review farmers has decided the claim will be covered. We are pleased that she is fully covered.”

However the McClures say this should be a lesson to any homeowner with a covered patio or carport. Molly said they should check their homeowner’s policy regardless of the insurance company to see if those attachments to their homes are covered.

Watch the Video


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Tuesday, September 15, 2009

Consumer Reports Survey: Most Problems with Claims were with Farmer’s Insurance and Others

Many people don’t have reliable insurance for their home. That’s the finding of a Consumer Reports National Research Center survey on insuring your home. The problems included delayed payments, payouts that were smaller-than expected, and some claims that were denied entirely.

Those who reported the most problems with claims were with—Farmer’s Insurance, Allstate, and Traveler’s—all major insurance carriers.

And Consumer Reports finds many insurance companies are cutting back coverage. Some are imposing high deductibles for windstorm damage. You might not be covered any longer for mold or dog bites.

Most important is checking what coverage you’ll have if your house is destroyed. Consumer Reports says Insurers are cutting back here, too. “Guaranteed replacement cost coverage,“ which pays the total bill to rebuild regardless of the price, is very hard to get, and where it’s available it’s very expensive.

Consumer Reports recommends comparison shopping for insurance every five years. Some good sites— and

And to be sure you’re protected in the future, check that the policy includes adjustments for inflation.

Consumer Reports says be aware that flood damage is never covered by private homeowners insurance. But you can get flood coverage through the federal government. For details, go to


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Monday, March 02, 2009

Farmers Insurance Company sued again

Lawsuits keep coming in Burlingame landslide
Shasta Kearns Moore / The Southwest Community Connection

HILLSDALE — Two more lawsuits have been filed in Multnomah County Court by the owners of the second home destroyed in the Burlingame Place landslide. The complaints totaling more than $1.7 million name Dave and Kathei Hendrickson, Farmers Insurance Company and the family’s insurance agent, Lynette Sanders.

Dr. Yuan Chou and his wife, Siukee Tong, barely escaped their home in the early morning on Oct. 8 when the house owned by the Hendricksons slid down the hillside and shoved their house off its foundation.

Both houses were destroyed — along with five other homes that were damaged — and the resulting debris has since been removed from the site.

Chou and Tong’s attorney, Jim Martin, said his clients are suing Farmers’ Insurance Company for not covering the damage to the home. Farmers’ Insurance has refused to pay, saying the policy does not cover earth movement.

But Martin argues that the damage to the home was not directly caused by earth movement.

“It is our position that the Hendricksons’ house is a flying object that landed on my client’s house, which is covered in the policy,” he said, adding that photographs show no mud on the Chou home. “So my client’s house was not damaged by land movement, it was damaged by a house falling on it.”

The family is also suing the Hendricksons for trespass, private nuisance and strict liability.

The complaint lists several remodels and landscaping projects that the Hendricksons undertook before the slide and argues that their negligence in performing these projects contributed to the landslide.

As stated in the complaint: “Upon information and belief, homes such as the Defendants’ home, do not slide down hillsides that has been there for 80 years without Defendants’ negligence in the care of their home, remodeling of their home and most importantly their landscaping as well as water management (sic).”

Farmers’ Insurance, who is also the Hendricksons’ insurer, has agreed to defend the them against this suit, according to their private attorney.

Burlingame Place remains closed
The section of Burlingame Place where Dave and Kathei Hendrickson’s home once stood will be closed until the shoulder can be rebuilt, say city officials.

Now a steep drop off to Terwilliger Boulevard, Bureau of Environmental Services spokesman Ross Caron said it would be too dangerous to open the street and risk damage to the road.

City engineer Doug Morgan said tests have shown the slope to be stable so far, but that it would be too risky to allow traffic on that section of road without the lateral support of a shoulder.

“Because of the steepness of the scarp, it’s not considered safe to reopen Burlingame,” Morgan said.

It is the responsibility of the homeowners to rebuild the shoulder, which could cost anywhere from $100,000 to $300,000, Caron estimated.

Caron said officials can eventually use city code to force the property owners to rebuild the hillside, but because the road closure is no longer impacting a major thoroughfare, they can afford to give the Hendricksons more time.

“It’s a delicate balancing act between being patient and compassionate and moving the process along quickly,” Caron said, adding city officials are trying to “treat them as they would like to be treated.”


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Wednesday, February 18, 2009

Farmers Insurance sued over Hurricane Ike claim

A Jefferson County man has filed suit against Farmers Insurance Exchange, alleging he was not paid money to which he was entitled after Hurricane Ike destroyed sections of his home.

When Pete Zavala's property at 9336 FM 365 in Beaumont sustained dwelling and contents damages on Sept. 13 during Hurricane Ike, he submitted a claim to Farmers, which had insured his property, according to the complaint filed Feb. 10 in Jefferson County District Court.

Zavala requested Farmers cover the cost of repairs, the suit states.

However, Farmers improperly adjusted Zavala's claim for the repairs of his property, even though the policy provided coverage for losses, he claims.

Farmers told Zavala it would not pay the full proceeds of the policy, although demand was made for it, which constitutes a breach of the insurance contract
, the suit states.

"Defendant misrepresented to Plaintiff that the damage to the property was not in excess to the amount paid, even though the damage was caused by a covered occurrence," the suit states.

Farmers also failed to make an attempt to settle Zavala's claim in a fair manner, a violation of the Texas Insurance Code, unfair settlement practices, he claims.

The company failed to explain the reason for its offer of an inadequate settlement, another violation of the Texas Insurance Code
, according to the complaint.

Farmers failed to affirm or deny coverage of the claim within a reasonable time frame, the suit states.

It refused to fully compensate Zavala, even though it did not conduct a reasonable investigation, which constitutes another violation of the Texas Unfair Competition and Unfair Practices Act, he alleges.

Farmers breached its contract with Zavala by refusing to pay the policy, according to the suit.

Zavala is seeking three times his actual damages, plus 18 percent post-judgment interest per annum and exemplary damages.

Jason M. Byrd of Snider and Byrd in Beaumont will be representing him.

The case has been assigned to Judge Milton Shuffield, 136th District Court.

Case No. D183-249

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Saturday, February 14, 2009

Farmers Insurance is one of the 10 Worst Insurance Companies for Consumers

The American Association for Justice has recently released a report entitled The Ten Worst Insurance Companies in America. You can read it here (pdf). The Alabama Association for Justice has prepared a statement on the report, which appears below:

10 Worst Insurance Companies for Consumers Ranked; No. 1, 3, 4 and 7 Sell Policies in AL

Insurance Industry Employs "Deny, Delay, Defend" Strategy, Puts Profits Over Policyholders

MONTGOMERY - In recent years, Alabama homeowners have seen sharp increases in their insurance premiums. A new study put out by the American Association for Justice ranks the 10 worst insurance companies in the U.S. for consumers and explains the overall rise in premium costs to an industry-wide strategy of denying claims, delaying payments and defending those positions as long as possible in hopes that weary claimants will settle for less than their claim is worth.

"Nationally, we've seen insurance companies continue to put profits over the best interest of their policyholders," Gibson Vance, president of the Alabama Association for Justice (ALAJ), formerly the Alabama Trial Lawyers Association, said, adding that "in Alabama it's no different."

In Alabama, State Farm (#4 on the 10 Worst Insurance Companies List) is the leading insurer of property and casualty insurance, followed by Allstate, AIG and Farmers (#'s 1, 3 and 7 on the 10 Worst Insurance Companies List). Alabamians pay the ninth-highest average homeowners premiums in the nation, which insurers say is because of hurricane risk, but interestingly only 12 percent of the state is coastal. In addition, property and casualty insurers took in $6.6 billion in premiums from Alabama policyholders in 2006 but only paid out $3.5 billion in losses.

Thousands of court documents, materials uncovered from litigation and discovery, testimony, complaints filed with state insurance departments, SEC and FBI records, and news accounts were reviewed to compile the rankings and statistics of the study. Financial documents also revealed extravagant profits and executive compensation while policyholders' claims were routinely delayed and denied. Over the last 10 years, the property / casualty and life / health insurance industries have each enjoyed annual profits exceeding $30 billion. The insurance industry takes in over $1 trillion in premiums every year. It has $3.8 trillion in assets, more than the GDPs of all but two countries. The CEOs of the top 10 property / casualty firms earned an average of $8.9 million in 2007. The CEOs of the top 10 life / health insurance earned an average of $9.1 million. The median insurance CEO's cash compensation is $1.6 million per year, leading all industries.

"The 10 worst insurance companies that made the list did so because of their shameful treatment of policyholders. As the study shows, Allstate's Your in Good Hands' motto only applies if you don't make a claim," Vance said.

10 Worst Insurance Companies for Consumers

1. Allstate (NYSE: ALL) set the standard for insurance company greed and placing profits over policyholders. Allstate contracted with consulting giant McKinsey & Co. in the mid-1990s to systematically force consumers to accept lowball claims or face its "boxing gloves," an aggressive strategy designed to deny claims at any cost. One Allstate employee reported that supervisors told agents to lie and blame fires on arson, and in turn, were rewarded with portable fridges.

2. Unum (NYSE: UNM) - Unum's actions are even more shameful considering the type of insurance it sells: disability. Unum's behavior was epitomized when it denied the claim of a woman with multiple sclerosis for three years, stating her conditions were "self-reported," contrary to doctors' evaluations. In 2005, Unum agreed to a settlement with insurance commissioners from 48 states over their practices.

3. AIG (NYSE: AIG) - The world's biggest insurer, AIG's slogan was "we know money." AIG, described by commentators as "the new Enron," has engaged in massive corporate fraud and claims abuses. In 2006, the company paid $1.6 billion to settle a host of charges.

4. State Farm - State Farm is notorious for its deny and delay tactics, and like Allstate, hired McKinsey consultants. State Farm's true motives became apparent during Hurricane Katrina; for example, it employed multiple engineering firms until they could deny the claims of the Nguyen family of Mississippi. In April 2007, State Farm agreed to re-evaluate more than 3,000 Hurricane Katrina claims.

5. Conseco (NYSE: CNO) - Conseco sells long-term care policies, typically to the elderly. Amongst its egregious behavior, the insurer "made it so hard to make a claim that people either died or gave up," said a former Conseco-subsidiary agent. Former Conseco executives were fined when they admitted to filing misleading financial statements with regulators.

6. WellPoint (NYSE: WLP) - Health insurer WellPoint has a long history of putting profits ahead of policyholders. For instance, California fined a WellPoint subsidiary in March 2007 after an investigation revealed that the insurer routinely canceled policies of pregnant women and chronically ill patients.

7. 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. Like Allstate, it also hired the McKinsey consultants.

8. UnitedHealth (NYSE: UNH) - The SEC opened an investigation into former UnitedHealth CEO William McGuire for stock backdating, which ultimately led to his ouster in 2006 and returning $620 million in stock gains and retirement compensation. Physicians have also reported that their reimbursements are so low and delayed by the company that patient health is being compromised.

9. Torchmark (NYSE: TMK) - According to Hoover's In-Depth Company Records, Torchmark's very origins were little more than a scam devised to enrich its founder, Frank Samford. Torchmark has preyed on low-income Southern residents and charged minority policyholders more than whites on burial policies.

10. Liberty Mutual - Like Allstate and State Farm, Liberty Mutual hired consulting giant McKinsey to adopt aggressive tactics. Liberty's tactics were highlighted when a New York couple's insurance was "nonrenewed" by Liberty, even though they lived 12 miles from the coast and never experienced weather-related flooding.

To see how consumers can hold the insurance industry accountable and view a full copy of the study, visit

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Friday, February 13, 2009

Farmers Mutual Insurance Company Sued for Claim Denial

Montgomery County residents file hurricane insurance suit in Jefferson County
By Kelly Holleran

Two residents of The Woodlands have filed suit against Ranchers and Farmers Mutual Insurance Company and Southeast Surplus Underwriters General Agency, alleging they were not paid money to which they were entitled after Hurricane Ike destroyed sections of their home.

When Michelle Weishiemer's and David Aguilar's property at 19 Shimmer Pond Place in The Woodlands sustained roof and water damages on Sept. 13 during Hurricane Ike, they submitted a claim to Ranchers and Farmers, which had insured their property, according to the complaint filed Jan. 30 in Jefferson County District Court.

Weishiemer and Aguilar requested Ranchers and Farmers cover the cost of repairs, the suit states.

However, Ranchers and Farmers denied a portion of Weishiemer's and Aguilar's claim for the repairs of their property, even though the policy provided coverage for losses, she claims.

It denied the claim after assigning an adjuster from Southeast Surplus to adjust the claim, according to the complaint.

"Plaintiffs' claim(s) still remain unpaid and the Plaintiffs still have not been able to properly repair the Property," the suit states. "Plaintiffs cannot live in their house in its current condition. They have been forced to lease another house at their own expense because Defendants have not even properly paid Plaintiffs under their Loss of Use coverage under their policy."

Ranchers and Farmers told Reed it would not pay the full proceeds of the policy, although demand was made for it, which constitutes a breach of the insurance contract, the suit states.

"Defendants misrepresented to Plaintiffs that the damage to the Property was not covered under the Policy, even though the damage was caused by a covered occurrence," the suit states.

Ranchers and Farmers and Southeast Surplus also failed to make an attempt to settle Weishiemer's and Aguilar's claim in a fair manner, a violation of the Texas Insurance Code, unfair settlement practices, they claim.

The companies failed to explain the reason for their offer of an inadequate settlement, another violation of the Texas Insurance Code, according to the complaint.

Ranchers and Farmers and Southeast Surplus failed to affirm or deny coverage of the claim within a reasonable time frame, the suit states.

They refused to fully compensate Weishiemer and Aguilar, even though they did not conduct a reasonable investigation, which constitutes another violation of the Texas Unfair Competition and Unfair Practices Act, Weishiemer and Aguilar allege.

Ranchers and Farmers and Southeast Surplus breached their contract with Weishiemer and Aguilar by refusing to pay the policy, according to the complaint.

Ranchers and Farmers and Southeast Surplus violated the Deceptive Trade Practices Act by an unreasonable delay in the investigation, adjustment and resolution of the Weishiemer's and Aguilar's claim, by their failure to give Weishiemer and Aguilar the benefit of the doubt and by their failure to pay for the proper repair of Weishiemer's and Aguilar's home, the suit states.

Ranchers and Farmers and Southeast Surplus engaged in false, misleading and deceptive acts or practices in the business of insurance, according to the complaint.

The companies also engaged in unfair claims settlement practices, the suit states.

Weishiemer and Aguilar are seeking unspecified actual, consequential, treble, punitive and exemplary damages, plus attorney's fees, costs, pre- and post-judgment interest and other relief to which they may be entitled.

Jason D. Speights of Speights Law Firm in San Antonio will be representing them.

The case has been assigned to Judge Milton Shuffield, 136th District Court.

Case No. D183-165

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Thursday, January 22, 2009

Farmers Insurance had the most complaints lodged against it during the storm season

It happens like clockwork.

Lately, it seems like every winter a storm blasts through Washington state bringing with it rain, wind and property damage.

If your roof gets swept up in hurricane-force winds, if a tree falls on your garage, are you covered by insurance?

Sometimes homeowners think they’re fully covered for things such as roofs, when they’re only really covered on the depreciated value of the roof, a decade after it was put on. Those can be hard, frustrating lessons, and sometimes, when an argument between homeowners and insurance companies gets heated, the state becomes involved.

In the last few years, countless people on the Twin Harbors have received a crash course in homeowners insurance coverage. Experiences have varied widely, but many have been frustrated by it.

The Daily World recently analyzed complaints filed with the state Insurance Commissioner’s Office resulting from a December 2006 storm and the big December 2007 storm.

A complaint registered with the Insurance Commissioner doesn’t mean an insurance company has done anything wrong, said Eric Mark, the public records manager for the state office. In fact, according to state investigator records obtained by The Daily World, most times insurance companies have not broken any regulatory rules at all.

But while many times rules may not have been broken, some policy holders feel so frustrated they still contact the Insurance Commissioner.

By the numbers

Statewide, Farmers Insurance had the most complaints lodged against it during the storm season, tying Allstate Insurance after the December 2006 storm with 11 complaints and garnering another 11 complaints from the December 2007 storm, for a total of 22.

Allstate had a total of 15 complaints from both storms. Farmers-owned Foremost Insurance had the third-most complaints filed, receiving 10 complaints from both storms.

Farmers’ top status for complaints received by the Insurance Commissioner is actually on par with the complaints the company gets year-round. For homeowner policies in 2007, Washington residents filed 101 complaints against Farmers, which had about a 13 percent market share of the state, the state agency says. In 2006, there were 72 complaints filed against Farmers. In both years, no other insurance company garnered as many complaints.

That compares, for instance, with State Farm Insurance, which had 55 complaints in 2007 and nearly 20 percent of the state’s market share — the highest share of any company. It registered only 43 complaints in 2006. During the past two December storms, just four complaints were filed against State Farm.

A spokesman for Farmers did not return phone calls seeking comment.

It was Farmers that took the Insurance Commissioner’s Office to Thurston County Superior Court in November over a couple of the case files The Daily World sought to review in a public records request for this story. Farmers initially didn’t want the state to release any of the information contained in two of the files, citing “trademark” protections. But during the court hearings, the company eventually changed its point of view and with a judge’s blessing released redacted information.

Mark, the public records manager for the Insurance Commissioner’s Office, says it’s been a couple of years since an insurance company has contested a public records request in court.

Some complaints

Complaints range from frustrated homeowners to cases that may be bound for court.

Sharon Longwith — one of the few people who allowed The Daily World to print her name for this story — said she thought she had a rock-solid policy that would have covered her house in all kinds of situations.

But she told The Daily World that Farmers partially denied a claim she and her husband filed with the insurance company following the December 2007 storm.

The storm had soaked the south side of her home, but she says the company wouldn’t pay for all of the damage “because the storm didn’t put a hole in my wall.”

That’s why she filed a complaint with the insurance commissioner’s office. When that didn’t help, she turned to FEMA for help. And when FEMA turned her down, she was able to find some financial assistance through the U.S. Department of Agriculture’s rural development program.

“Without the U.S. Department of Agriculture, I think we’d still have damage today,” Longwith said last month. “They gave us the money to hire a contractor, to repair the damage and are truly unsung heroes. I don’t think many people know they can get help through them.”

But some folks aren’t as lucky as Longwith.

A Rochester couple filed a complaint against Farmers following the December 2007 storm because the water around their home had risen to such a level that they actually had to be evacuated. The couple is named in the state documents but asked The Daily World not to identify them.

In their initial complaint letter to Insurance Commissioner Mike Kreidler, they wrote, “The flood water destroyed our insulation and heating ductwork completely, the skirting is waterlogged and will also need to be replaced. Our home has a cold-dampness inside and we have been using space heaters 24/7 to keep the cold/damp air at bay. This has resulted in a high electric bill; $191.00 for December. You can see the water in the floor ducts throughout the house.”

Their complaint wasn’t that Farmers wouldn’t cover their damage, but that the company was taking too long to respond. In the end, according to the Insurance Commissioner’s Office, the homeowners decided to get FEMA involved.

In Raymond, a homeowner called his insurance company, Foremost, while his power was still out, following the wind blasts of the 2007 storm. He wanted to set up a time for an adjuster right away because his home was soaked from so much rain.

“I asked if I could remove the closet carpet because of rain saturation and was told NOT to touch anything until the adjuster saw the damage,” wrote the complainant, whose name has been redacted from the state report. “I told her that the water will move through the area and she said this was ‘Due Process’ and that I needed to adhere to it.”

He was also concerned because when an adjuster did come out, the adjuster allegedly didn’t look under tarps on the roof or do an adequate inspection, resulting in a lower-than-expected settlement offer, according to the complaint.

Even though the state investigator didn’t find that the company did anything wrong, just the mere fact that the Raymond man complained seemed to speed up the process for him, according to the documents obtained by The Daily World.

Then there’s another incident in Raymond, which may very well end up in court.

A Raymond man, whose name has also been redacted from the state reports, complained to the Insurance Commissioner’s Office because Safeco Insurance had denied his claim. During the December 2007 storm, the rain had saturated the ground around his home to the point that the foundation shifted.

Safeco claimed that the foundation shift was caused by an “earth movement, meaning the sinking, rising, shifting, expanding or contracting of earth, all whether combined with water or not,” and so the claim isn’t covered under the homeowner’s policy.

According to notes from the state investigator, “Safeco seems to think that if 50 percent or more of the damage wasn’t caused by the wind, they won’t pay on anything.”

Amid the documents released to The Daily World is a report filed by an expert hired by the insurance company saying all the damage was caused by the “earth movement” while the Raymond man has documents on file from an engineer that indicate that when the ground was softened, it was the wind that blew the foundation off, which should then be covered.

The state investigator said there was nothing she could do and recommended the man contact an attorney, which she later noted he did.

Know your policy

But the term “earth movement” is one that should be remembered by everyone seeking insurance, according to Hoquiam Mayor Jack Durney, who also owns Durney Insurance in Hoquiam, and was willing to review some of the Insurance Commissioner files with The Daily World.

“There isn’t a regular home policy out there that covers earth movements,” said Durney.

And those who are concerned that their foundation may slip because of soggy ground may just be out of luck.

“A lot of the Harbor here is built on fill,” Durney said. “And there are places where earthquake insurance coverage just won’t take.” Or, if a policy can be found, it won’t ever be affordable because of the high risk factor.

Typical homeowner’s insurance won’t cover flood damage, either, Durney notes. A number of the complaints filed with the Insurance Commissioner’s Office had to do with flooding, but nearly every time the state had to reject the complaint because there was no flood policy.

Homeowners concerned enough about flooding need to buy such a policy through the National Flood Insurance Program, independent from any other policy, Durney said.

Durney also found that one of the biggest complaints he hears is the difference between a policy that covers the “actual cash value” of, say, a damaged roof, compared to a policy that will fully cover the cost to repair a roof.

“There’s such a huge difference both in the premium the homeowner pays and the amount of coverage that results,” Durney said.

With “actual cash value,” the homeowner will only be compensated with what the roof is worth in today’s dollars. That’s often thousands of dollars less than what it will cost to get a new roof.

The homeowner is stuck with the bill for whatever the difference is. Don’t like that idea? Durney says take a look at your policy to make sure it’s not there and contact your insurance agent to change policies right away.

“I would be more inclined to say that although there can be a big difference in premium, it is well worth it because the ‘replacement’ policy will do just that — hire a contractor to repair or replace the damaged part of the home. ‘actual cash value’ is much like the collision coverage you have on a car in that depreciation is taken into consideration. So, if you have a roof that is in bad repair and is old, the insurance company will only pay you the depreciated value — much like an old car that you wreck.”

Planning on renovating the home? A new homeowner’s policy may be your best bet, Durney also advises.

“The trick with insurance policies is making sure what you want is in your policy before a disaster happens,” Durney said. “That means asking lots of questions and having an agent or someone who can actually give you answers.”

That way insurance holders won’t be on their last legs with no one else to go to but the Insurance Commissioner — or an attorney.

Want to see more complaints or file one? Visit

Got an Insurance Commissioner question? Call the Insurance Consumer Hotline at 1-800-562-6900.

By The Numbers

Complaints after Dec. 2006 & 2007 storms:

Farmers 22

Allstate 15

Foremost 10

Hartford 4

Liberty Mutual 4

State Farm 4

Safeco 3

Pemcu Mutual 3

Balboa 2

Grange 2

Metropolitan Property & Casualty 2

Mutual of Encumclaw 2

USAA Casualty 2

Zurich American 2

Amco 1

American Alternative 1

American Family 1

American Federation 1

American Security 1

American States 1

Amica Mutual 1

California Casualty 1

Canfield & Associates 1

Contractors Bonding & Insurance 1

Country Mutual 1

Esurance 1

Guideone Mutual 1

Homesite 1

Lexington 1

Mt. Hawley 1

North Pacific 1


Standard Fire 1

Truck Insurance 1


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Wednesday, November 19, 2008

Insurance Industry Exposed - Tricks Of The Trade

In this, its fourth report on the multi-trillion dollar insurance industry, the American Association for Justice (AAJ), an association of trial attorneys, is making no friends with the insurance industry.

Entitled, "Tricks of the Trade: How Insurance Companies Deny, Delay, Confuse and Refuse," the new report describes some of the most egregious ways the insurance industry puts profits over people. This, despite the fact that the industry makes about $30 billion in profits a year and pays its CEO more than any other industry.

How is the consumer hurt?

AAJ researchers studied thousands of claims and news reports spanning a decade across the country.

Last July, “The Ten Worst Insurance Companies in America,” named Allstate Insurance at the top of a list of insurance companies that employ tactics to reduce payments to customers.

In both 2006 and 2007, “A Pattern of Greed” reports also criticize the insurance industry.

In “Tricks of the Trade” AAJ found a similar pattern including:

Denying Claims - While the big insurers such as State Farm, AIG and Allstate deny claims to consumers, they reward employees who deny the claims. Employees who do not agree are dismissed. AAJ says “When all else failed, [the companies] engaged in outright fraud to avoid paying claims.”
Example – 60-year-old Ethel Adams of Seattle had a $2 million policy with a subsidiary of Farmers. The company denied her auto accident claim, saying that the driver of the car who caused the accident was acting deliberately in a moment of “road rage”.

Delay Until Death – As many claimants are in ill health and are elderly, to delay is often to deny. AAJ says that insurance companies have locked paperwork up indefinitely. A claimant will either give up, or die.
Example – Some of the most “shameful” delays of coverage are in the area of long-term care, the report says. The case of 77-year old Mary Rose Derks from Montana is one example. Her family sold their small business after Conseco denied the claim for more than four years.

Employees at Conseco have testified deliberately mailing the wrong forms and then denying claims based on incorrect paperwork.

Discriminate by Credit Score - It’s not commonly known that insurance companies will use a credit score to determine if you should receive insurance at all. People with little credit, such as the poor and senior citizens, or people who pay with cash, are disproportionately discriminated against under this policy.
Example - When Kathryn Perry, a Wimberley, Texas nurse fell behind on her bills after her daughter was murdered, her credit score suffered. The insurance company raised her auto insurance rate nearly 500 percent. Her yearly premium went from $437 to $3,000. “They are victimizing the victims,” Perry told lawmakers before the Texas House of Representatives.”

Canceling on the Sick – Some policies have been canceled retroactively or rescinded when someone is sick and their condition makes treatment expensive. Often employees who meet the “cancellation goals” are offered bonuses.
Example - Patsy Bates, a 51-year old hair dresser from California was suddenly without insurance after Health Net, Inc rescinded it in the middle of breast cancer treatment. Health Net said her application information wasn’t correct. A sales rep had filled out the paperwork while she styled someone’s hair. Bates had to stop chemotherapy until she could find a charity to help pay for it.

Last February, Bates won a $9.4 million judgment against HealthNet after it canceled her policy during chemotherapy treatment.

Following the negative publicity that surrounded her case, California health insurers were told to reinstate the health policies of 26 people who were thrown off the roster for coverage after the insurer claimed they lied.

Canceling for a Call – Need to ask a question of your insurer? You might rethink that. AAJ finds that the insured can have their policies canceled if they even inquire about making a claim.
Some insurers consider inquiries the same as filing a claim and have dropped customers.

Earlier this year, the Consumer Federation of America (CFA) came to the very same conclusions about the insurance industry as AAJ. The group was joined by several state and national consumer organizations in issuing its report and finding that during a three-year period, from 2004 to 2007, the industry recorded profits at more than $253 billion.

The South Carolina State Supreme Court sums it up best. “Insurers generally are attempting to convince the customer when selling the policy that everything is covered and convince the court when a claim is made that nothing is covered.”

So What Can You Do?

Reading your policy carefully is a good start. Know what is covered and what is not.

Know how to appeal a denial from your insurer.

When filling out any insurance form, make sure all of the information is correct. An error might serve as a basis to cancel the policy.

If you get a check back after being canceled, do not cash it. That might send the message that you have accepted their offer.

Everything should be put in writing including the name of the company representative and what they told you. Keep records of all correspondence and bills.

Do not give up, AAJ recommends.

And when you hit a brick wall, contact your state insurance department. While they will not represent you in a private matter (only an attorney can, or you can represent yourself), they may still help you. #


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Monday, October 06, 2008

Farmers Insurance Commercial Denies Another Legitimate Claim

Good luck tomorrow Jeffrey!
From one of our readers:

--- snip --- snip ---

On 6/27/2008 I went to (Southwest Diner)fot lunch.I parked and went inside.When I came out I got in my car and began to back out of the parking stall.As I was backing a piece of steel rebar sticking out the top of the barrier caught my bumper and nearly tore it off.I did report it to (cindy Ford)the owner the next day.She in turn call her insurance agent (Geoffrey Baughman)a (Farmers agent).He told me my car would be repaired NO PROBLEM,therefore accepting and admitting LIABILITY.A few days later I get a call from (Farmers Insurance)declining the claim.They said they are not at fault because management was never told about the problem.DUH,I told you after it damaged my car.Just so happens a employee at the Diner saw everything happen.Total damage is about $1000 but you will pay me double in court on October 7,2008. - Jeffrey

Letter from Holli Todd of Farmers Insurance denying claim.

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Thursday, September 18, 2008

Farmers Insurance Loses Class Action: Ordered to Pay Millions

Lawton Jury Returns With Farmers Insurance Verdict
Thursday, September 18, 2008
It could turn out to the one of the biggest judgements in state history. A Commanche County jury Wednesday ruled against Farmers Insurance Company in a class-action lawsuit alleging the company failed to pay millions of dollars in homeowners' claims. Attorney Michael Burrage in Oklahoma City says the jury ordered Farmers to pay 50 million dollars for contractual benefits, 50 million dollars for bad faith and fraud and 30 million dollars in punitive damages. Burrage says he is pleased with the verdict. He says the jury did the right thing. The verdict affects 76-thousand policyholders in Oklahoma.

Multi-million dollar judgement
Thursday, September 18, 2008
Lawton_A Comanche County jury handed down a multi-million dollar judgement against Farmers Insurance company Wednesday as part of a class-action lawsuit. They ordered $50 million in actual damages, and $30 million in punitive damages, plus interest, which could push the total judgement to $200 million.
The suit was originally filed in 2001 on behalf of 76,000 policyholders in Oklahoma by Bill Burgess, Senior. His sons, Bill and Brad, both attorneys, have been on the case from the start. Their contention was that Farmers had wrongfully withheld millions of dollars in claims that should have been paid to policyholders.
The case finally reached the jury this month, and after two weeks of testimony and five hours of deliberation Wednesday, they returned the judgement. It's the largest ever in Comanche County, and may turn out to be the biggest judgement in Oklahoma history.

Farmers Insurance Class Action Web Site:
Burgess v. Farmers Insurance Company
A class action lawsuit involving homeowner’s insurance issued by Farmers in Oklahoma may affect your rights.

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Thursday, August 14, 2008

Farmers Insurance Denies Flooded Family's Claim

Heather Shannon
Katie DeLong

LAKE DELTON - Progress is being made on Lake Delton. Crews are sealing the breach with a brand new coffer dam.

But Tim Fromm, whose home used to stand where the lake breached, isn't making any progress with his insurance company.

“Things can't get worse for us,” Fromm said.

Farmers Insurance denied the Fromm's insurance claim 100 percent.

"We never missed a payment. We had insurance for one reason and one reason only. That was to protect our property,” Fromm said.

That property, along with the Fromm's home, and every single thing in it, washed away when the lake overflowed its banks and washed away the Fromm's home on June 9.

“We just want to be fairly compensated for what we lost,” Fromm said.

In their denial letter, Farmers Insurance states they never cover "earth movement" or water damage, citing corporate policy.

They did not return any of TODAY’S TMJ4’s requests for an interview.

Fromm says his family is moving in with relatives in the Chicago suburbs until they figure out what to do.

“We're not looking for pain and suffering, even though this is the hardest thing we've ever been through. We just want to get back exactly what we put into it, and start our lives over,” Fromm said.

The state did reimburse the Fromms for the cost of their land and home, still nothing inside was covered.

Video and Story at

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Thursday, July 24, 2008

Farmers Insurance Senior Liability Representative Tells All

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


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.


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.

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Thursday, July 10, 2008

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

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:

Download the "friend of the court" brief:

Consumer Watchdog (formerly the Foundation for Taxpayer and Consumer Rights) is a nonpartisan, nonprofit consumer advocacy organization. Learn more at


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