Texas Farmers Insurance Homeowners Class Action Lawsuit

Pursuant to the order of the 172nd District Court of Jefferson County Texas this press release is being issued to inform interested parties that a Class has been certified and is pending awaiting trial in the matter: Sandra Geter, on behalf of herself and all others similarly situated v. Farmers Group, Inc.; Farmers Underwriters Association; Fire Underwriters Association; Farmers Insurance
Exchange; and Fire Insurance Exchange, Cause No. E-167,872), In the District Court of Jefferson County Texas, 172nd Judicial District. The following copy of the Notice ordered by the Court provides further information.

Para una traduccion en espanol de esta notificacion por favor llame al 1-877-695-7479

SANDRA GETER | CAUSE NO. E-167,872
ON BEHALF OF HERSELF AND ALL OTHERS |
SIMILARLY SITUATED | IN THE DISTRICT COURT OF
| JEFFERSON COUNTY TEXAS
PLAINTIFF |
| 172ND JUDICIAL DISTRICT
V. |
|
FARMERS GROUP, INC.; |
FARMERS UNDERWRITERS ASSOCIATION; |
FIRE UNDERWRITERS ASSOCIATION; |
FARMERS INSURANCE EXCHANGE; |
AND FIRE INSURANCE EXCHANGE |
|
DEFENDANTS |
---------------------------------------------

Legal Notice
A Pending Class Action Lawsuit May Affect Your Legal Rights

If your HO-B homeowners insurance was not renewed in the circumstances described below, you are hereby put on notice that a class action lawsuit has been certified and is now pending in the 172nd Judicial District Court, Jefferson County, Texas (the "Court"). The lawsuit is entitled Sandra Geter, on behalf of herself and all others similarly situated, (the "Plaintiffs") v. Farmers Group, Inc., Farmers Underwriters Association, Fire Underwriters Association, Farmers Insurance Exchange, and Fire Insurance Exchange, (the "Defendants"), Cause No. E-167,872, 172nd District Court, Jefferson County, Texas (the "Lawsuit").

This Notice affects you if you fit within the following class (the "Geter Class"):

All persons, other than those excluded below, whom, on or after November 14, 2001, received a notice from one or more Defendants advising them that their current HO-B homeowner policy covering property in the State of Texas would not be renewed when it expired.

The persons excluded from the Geter Class are:

(a) All persons who received a notice from one or more Defendants on or
after November 14, 2001, advising them that their current HO-B
policy covering property in the State of Texas would not be renewed
because the person receiving the notice had filed three or more
claims under the policy in the preceding three years and the claims
did not result from natural causes;
(b) All persons who received a notice from one or more Defendants on or
after November 14, 2001 advising them that their current HO-B
policy covering property in the State of Texas would not be renewed
because the person receiving the notice had filed two non-weather
related claims in a period of less than three years, had received a
notice that their policy would be subject to non-renewal if a
third non-weather related claim was filed during a three year
period beginning with the date of the first of the two non-weather
related claims, and who filed a third non- weather related claim
during the said three year period;
(c) All government entities, bodies and agencies of any character,
federal state or local and their employees (in that capacity only);
(d) The presiding judge(s) and other court personnel; and
(e) The Defendants and their employees and agents.

The Court has ordered that the Geter Class be provided notice as follows:

1. Plaintiffs contend that despite Defendants' notice of non-renewal,
Geter Class members are entitled to renew their HO-B homeowner's
insurance policy and Plaintiff seeks a declaratory judgment
establishing whether and on what terms the Geter Class has a right
to renew the HO-B coverage. Defendants have denied any wrongdoing,
have denied that the Geter Class is entitled to renewal of the
coverage or the requested declaration, and Defendants contend that
they were not required to offer HO-B homeowners insurance policies
to Texas policyholders. The Texas Commissioner of Insurance has
agreed that Texas law permits Farmers to discontinue, as it has
done, offering HO-B policies to Texas policyholders, and offer, in
lieu of the HO-B policy, its amended and revised HO-A policy. This
Notice is not to be construed as an expression of any opinion by the
Court with respect to the merits of the respective claims or
defenses. This Notice is sent merely to advise you of the pendency
of the action and the rights which you have with respect to the
action.

2. All Geter Class members are also members of another class in the
pending case of Jan Lubin, et al v. Farmers Group, Inc. et al., C.A.
No. GV202501, in the 261st District Court in Travis County, Texas.
In particular, Geter Class members are members of the Rate class in
Lubin ("Lubin Class"), which includes all "who received a notice at
any time after November 14, 2001, that their HO-B Policy would not
be renewed." Farmers has agreed with the Texas Attorney General, to
settle the Lubin matter. The settlement must still be approved by
the trial court in Lubin. Under the proposed settlement, Lubin Rate
Class Members are eligible for a 6.8 % refund of earned base
premiums paid on HO-A policies incepted or renewed from December
28, 2001, up to and including November 10, 2002, either in the form
of a refund check or a credit upon renewal after approval of the
settlement. The Lubin Rate Class received a reduction to any HO-A
policy that was renewed or to any new policy issued, and the
reduction also is to be applied retrospectively to HO-A policies
issued before December 18, 2002. The proposed settlement with the
Lubin Class also provides other benefits to members of the Geter
Class. Some policyholders may receive benefits as members of the
Lubin Discount Class if they are current or former HO-A
policyholders and former HO-B policyholders who paid premiums that
were higher than what they would have been charged had the agreed
upon individual discounts been applied. Lubin Discount Class members
who did not receive discounts for Farmers Property Risk Assessment,
age of home, and territory at the level agreed to by the State and
the Farmers Parties are eligible to receive an Individual Discount
Adjustment payment. In addition, Geter Class members may be entitled
to recover in Lubin from the Credit Usage Notice Adjustment Fund if
Farmers used incorrect credit information when calculating their HO-
B premiums. Lubin Credit Usage Notice Class Members are eligible to
make a claim against the Lubin Credit Usage Notice Adjustment Fund,
designed to reimburse those policyholders who paid a higher premium
for auto or homeowners insurance due to erroneous credit information
on the individual's credit history maintained at a credit bureau,
which led Farmers to charge higher premiums than they would have
charged with correct credit information.

3. The settlement in Lubin has been preliminarily approved by the
District Court in Travis County. If you want to participate in the
final fairness hearing in Lubin, you must be a member of the Lubin
Class. The procedure for participation in the Lubin hearing will be
sent to you separately in another notice.

4. Any member of the Geter Class may opt out of the Geter Class and thus
be excluded from the litigation and remain eligible to participate
in the Lubin settlement. To opt out a Geter Class member need only
send their name and address in writing along with a statement that
they wish to opt out of the Geter Class to: Tom Kiehnhoff, Reaud,
Morgan & Quinn, 801 Laurel St., Beaumont, Texas 77701 with a copy to
Layne E. Kruse, Fulbright & Jaworski LLP, Fulbright Tower, 1301
McKinney, Suite 5100, Houston, TX 77010-3095. The opt out request
must be postmarked by May 1, 2010. Persons who opt out will not be
entitled to share in the benefits of the judgment if it is favorable
to Plaintiff and the Geter Class, and will not be bound by the
judgment if it is adverse to Plaintiff and the Geter Class.

5. All Geter Class members who do not opt out as described in Paragraph
4, will be bound by the determination of the Court whether favorable
or unfavorable to the Geter Class. Geter Class members are advised
that only the claim for declaratory relief has been certified as a
Geter Class claim and only the claim for declaratory relief will be
tried in Geter. Geter Class members are warned that claims for
damages or any other relief not within the scope of the declaratory
relief certified will not be tried as Geter Class claims and there
is a real and substantial danger that such claims may later be found
to be barred by a judgment for or against the Geter Class, unless
the Geter Class member opts out.

6. If Geter prevails in this case, to renew HO-B coverage, Defendants
contend that each Geter Class member must pay the full cost of the
renewed HO-B policies for each year in issue, or from the year of
non- renewal (in most instances from 2002) to date. For example,
the premium for a HO-B policy in 2002 has been estimated to be in
excess of $5,410.00 for Sandra Geter, or total premiums of about
$43,280.00 for the years 2002-2009. In 2003, the Texas Legislature
passed legislation regulating rates. Each insurance exchange is
required to use certain criteria in setting rates and must file
proposed rates with the Texas Insurance Commissioner. Exchanges are
not currently permitted to write homeowners insurance on the HO-B
form - or any other policy form - without first undergoing this
rate-making process. Because new rates would have to be filed with
the Texas Commissioner of Insurance for approval under the new law,
the exact amount each Geter Class member would be required to pay to
obtain an HO-B policy renewal is unascertainable at present.

7. Since the Geter case was filed in 2002, the Texas Supreme Court has
ruled that the HO-B policy excludes mold damage claims. Therefore,
any renewal of an HO-B policy offered to Geter Class members as a
result of this case would not include coverage for losses caused by
mold.

8. If Geter prevails in this case, to renew a HO-B policy, Defendants
contend that each member of the Geter Class would also be required
to qualify for the coverage. In addition to submitting proof of
ownership of the insured property, the renewal of each Geter Class
member's HO-B policy would be subject to underwriting review.
Underwriting is the process used by an insurer to determine if a
risk is acceptable to the insurer, and if so, how to price that risk
if written. An underwriting review may include, among other things,
the inspecting of the insured's home (both interior and exterior) to
determine whether it continues to meet underwriting requirements.
The underwriting inspection may include an inspection of the home's
roof, foundation, sidings, doors, windows, driveways, porches,
decks, patios, gutter, plumbing, heating, cooling systems,
electrical, and the maintenance and other physical condition of the
property. If a property does not meet the actuarially sound
underwriting guidelines, Defendants cannot be required to renew it
without regard to whether Geter prevails in this matter.

9. Any Geter Class member may, if they choose and at their own expense,
enter an appearance through counsel of their choosing. All Geter
Class members who do not opt out or enter an appearance through
counsel of their choosing will be represented by Plaintiff through
her counsel:

Glenn W. Morgan
Tom N. Kiehnhoff
Chris Portner
Reaud, Morgan & Quinn
801 Laurel Street
Beaumont, TX 77701
(409) 838-1000

Wayne A. Reaud
The Reaud Law Firm
801 Laurel Street
Beaumont, TX 77701
(409) 838-1000

L. DeWayne Layfield
Law Office of L. DeWayne Layfield
P.O. Box 3829
Beaumont, TX 77704
(409) 832-1891

10. The attorneys representing the Geter Class have entered an employment
contract with Sandra Geter under which Sandra Geter agreed that
should she prevail in this case the attorneys would receive a
contingent fee payment. However, since no damages will be recovered
in this Lawsuit by the Geter Class, the attorneys representing the
Geter Class plan to apply for reasonable and necessary fees based on
the hours that they actually worked on this matter, assuming the
Geter Class prevails at trial. If awarded by the Court, reasonable
and necessary fees would be paid by Defendants.

11. All communications and questions concerning this Notice should be
sent to Plaintiff's attorneys identified in Paragraph 4, and should
not be addressed to the clerk of this Court.

12. If the address of any Geter Class member changes or is different than
the address stated on the envelope enclosing this Notice, the new or
corrected address information should be sent by mail to the
attorneys identified in Paragraph 4.

13. This Court has retained jurisdiction in this action to alter, amend
or withdraw its order determining that this cause shall be
maintained as a class action, at any time before final judgment.

14. The pleadings and other papers filed in this action are available for
inspection in the office of the clerk of this Court.

15. You can also obtain additional information by visiting
www.GeterClassAction.com or calling toll free 1-877-695-7479.

Dated: December 10, 2009 /s/ Donald J. Floyd
-------------------
Honorable Donald J. Floyd
Judge 172nd District Court
Jefferson County, Texas

Media inquiries can be made as indicated in the Notice.

Source: www.geterclassaction.com

Farmers Insurance seeks 27.5% homeowners’ rate increase

Property insurance increases expected

By TED GRIGGS
Advocate business writer

Louisiana homeowners and businesses will see property insurance rates rise more this year than they have since 2006, in large part because of the financial meltdown, Insurance Commissioner Jim Donelon said.

“I do not anticipate that it will result in double-digit increases,” Donelon said.

In 2008, Louisiana homeowners’ rates rose an average of less than 1 percent, Donelon said. In 2007, the rates were up by just over 3 percent.

This year the rates will rise somewhere between those low numbers and 10 percent, Donelon said. The same holds true for commercial property insurance and for automotive coverage.

Insurance companies’ ability to write coverage is affected by the amount of capital available, Donelon said. With investors dumping insurance sector stocks, those companies can’t write as much coverage.

Meanwhile, insurance companies are also seeing their investment portfolios take a beating, Donelon said. This also reduces the amount of coverage they can write.

According to the Insurance Information Institute, an industry-funded group in New York, investments are the principal source of declining profitability among insurers. During the first three quarters of 2008, the insurance industry’s investment gain was $28.3 billion. The fourth-quarter figures are not yet available, but even if the industry’s investments remained at that level, when stocks and interest rates continued to fall, the total would still be the lowest in 15 years.

Robert Hartwig, president of the institute, said bonds represent roughly two-thirds of insurance companies’ investments, with stocks accounting for 20 percent or less.

Low interest rates and returns on investments, in the United States and internationally, will ultimately affect the price of insurance, Hartwig said. That is because a certain part of the losses that insurers pay have always been financed by investment returns.

The effect varies by insurer, Hartwig said, “but there was no insurer that was not impacted by what happened on Wall Street last year.”

Still, the major factor influencing property insurance costs in Louisiana remains the threat of a major hurricane, Hartwig said. An active season is expected in 2009, and reinsurers are raising their rates to reflect that.

Donelon said that with less coverage available, the law of supply and demand kicks in and prices rise.

Already, State Farm Fire & Casualty Co., the largest insurer in Louisiana, has asked to increase homeowners’ rates an average of 14 percent statewide. Farmers Insurance Exchange, the sixth-largest firm in the state, is seeking a 27.5 percent increase in homeowners’ rates and the institution of a 5 percent hurricane deductible. Louisiana Farm Bureau, the fifth-largest company, is seeking a 10.2 percent increase.

The Insurance Department is reviewing those requests, but Donelon said his preliminary review is that neither State Farm nor Farmers will receive a double-digit increase.

Farm Bureau’s request has only recently been filed.

However, Brooke Cluse, a spokeswoman for State Farm, said the rate request is not directly related to the state of the economy or financial markets.

“We have had a tremendous amount of weather-related losses in the state over the past several years, and while many insurers have left the state, State Farm is here and committed to our policyholders in Louisiana. We have demonstrated our commitment by helping our customers recover from unexpected loss and they can expect nothing less in the future.”

Farmers Insurance officials could not be reached for comment Friday.

Source 2theadvocate.com

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
Source: setexasrecord.com

Farmers Insurance rate hike to hit many Texas homeowners

By TERRENCE STUTZ / The Dallas Morning News
tstutz@dallasnews.com

AUSTIN – Hundreds of thousands of homeowners in North Texas and across the state will see their insurance rates increase by double digits beginning Monday after state regulators decided not to object to the rate hikes by Farmers Insurance.

The higher rates affect policyholders for two of the company's largest subsidiaries – Farmers Insurance Exchange and Fire Insurance Exchange – which will boost their premiums nearly 10 percent and 12.6 percent respectively, starting with policies renewed on Monday.

Farmers is the third-largest home insurer in Texas.

"We are not planning to take any action on it, so the effective date stands," Jerry Hagins of the Texas Department of Insurance said Friday. The agency reviewed the proposal after it was filed late last year and could have objected if officials had found the increase unjustified.

A spokeswoman for Farmers said the increase for customers of the two subsidiaries is across the board with no variations by region of the state.

Michelle Levy of Farmers, who cited higher costs for labor and materials as one reason for the increases, noted that the rate proposals were being developed even before Hurricanes Ike and Dolly struck the Texas coast last year.

"It was part of our annual review of rates in 2008," she said.

Rates for Farmers' other home insurance subsidiary in the state – Texas Farmers Insurance – went up 7.9 percent last year, an increase that was reflected in annual premium notices beginning in May. Farmers provides coverage for about 714,000 Texas homeowners.

Consumer groups on Friday criticized the insurance department for allowing the increases to go through.

"These kinds of double-digit rate hikes should provide the Legislature with the evidence they need to move forward with real insurance reforms this year," said Alex Winslow of Texas Watch.

"Enough is enough. How many of these rates hikes do we have to have before lawmakers and the insurance commissioner recognize that insurance companies are taking advantage of the system?" he asked.

Regarding the massive losses that companies suffered in 2008 because of the hurricanes, Winslow said, "Certainly we want rates to be sufficient, but given the overcharges that Farmers and other companies have imposed on customers for years, I have no doubt the insurance industry in our state has ample resources to protect themselves against weather-related losses."

Source: dallasnews.com