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“State Farm has sold as its product ‘peace of mind,’ using an advertising slogan which promises consumers that they can count on it to act ‘like a good neighbor,”’ wrote Judge William B. Bohling in the $25 million Utah decision. ”But…State Farm’s corporate policies involve betraying the trust that it invites policyholders to place in it.” Utah State Appeals Judge William B. Bohling
“The jury could easily find from the evidence that State Farm’s claims-handling practices are predicated on exploiting the trust placed in it by its policyholders…. And it certainly appears to the Court that State Farm pursues an official policy established to encourage such wrongful denial of benefits where State Farm believes it can successfully be accomplished.” Utah Supreme Court
If you had or have a State Farm Insurance homeowners’ policy, filed a claim for damage to your home and you think your claim was wrongfully denied, you’re not alone. State Farm has a sordid history of taking our premium payments for years and then, when we have a claim and need them most, they deny the claim citing some small print language in our policy that purportedly excludes us from collecting and bringing our homes back to livability.
When you shared your claim denial story with your friends many probably told you they’ve had a similar claim or known someone who had a similar claim and they say that their insurance company covered them. When you tell them you were insured by State Farm, they probably rolled their eyes, shook their head and told you, “I know all about State Farm. That’s why they’ll never be my insurance company!”
Two former State Farm Mutual Automobile Insurance Co. attorneys have settled a lawsuit that accused the company of telling them to cheat policyholders. Read what happened below and you’ll know how and why you’ve been HAD by our “good neighbor” State Farm Insurance
The two State Farm whistleblowers, Richard Spratley and Brett Pierce, claimed in the lawsuit they were forced to leave rather than breach legal and ethical responsibilities to policyholders. The pair took hundreds of documents with them when they left the company to support their case.
State Farm had argued before the high court that the pair should not be able to use the documents because they were privileged communications between an attorney and a client. The justices disagreed, ensuring the documents could become public in a trial.
The Utah Supreme Court ruled Spratley and Pierce could use documents they took with them when they quit the insurer.
Rather than have the incriminating documents see the light of day through exposure in litigation, State Farm quickly settled with the plaintiff’s and deep-sixed the documents.
Neither the plaintiffs nor defendant State Farm would disclose the terms of the settlement but it was believed to be significant.
In another case, alleging State Farm policyholder fraud, a Utah state appeals court judge ruled that the company should pay $25 million in punitive damages for the ”systematic destruction of documents” and ”systematic manipulation of individual claim files to conceal claim mishandling,” among other things.
“State Farm has sold as its product ‘peace of mind,’ using an advertising slogan which promises consumers that they can count on it to act ‘like a good neighbor,”’ wrote Judge William B. Bohling in the $25 million Utah decision. ”But…State Farm’s corporate policies involve betraying the trust that it invites policyholders to place in it.”
During the trial, four former State Farm employees testified that claims agents faced relentless pressure to cut costs, and that their pay raises were largely determined by their ability to meet pre-set payout targets, not on the scope of claims they might face in a given year.
Additionally, they said the company routinely destroyed old training guides, procedure memos, claim-handling manuals, and other documents that could be used against it in litigation. One Utah manager told jurors State Farm had tried to destroy some of the documents related to the case.
Infuriated by this testimony, as well as several incriminating internal documents, Bohling came down hard:
State Farm has constructed ”a nearly impenetrable wall of defense against punishment for its wrongdoing, one so effective that it is able to pressure its adjusters to deny consumers insurance benefits with impunity, knowing that…any victims who actually do reach trial will have great difficulty establishing the basis for punitive damages [because of] a body of evidence that has been systematically sanitized,” he wrote.
If you’re angry, tell us your State Farm claim denial horror story. Then, fill out the to become a member of a possible class action suit against State Farm for bad faith and fraud in drafting the broad and ambiguous claims language in their policies and wrongfully denying claims. There will be no cost to you to join and participate in the suit.
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