Avoiding payments - State Farm - 4th Worst Insurance Company

Notorious for their deny and delay tactics, the company goes to extreme lengths to avoid paying claims, like forging signatures and altering reports after major natural disasters like Hurricane Katrina, State Farm earns the number four worst insurance company in America.

Headquarters: Bloomington, IL

Profits: $5.5 billion

Assets: $181.4 billion

  • After Hurricane Katrina, State Farm claimed that it settled 99 percent of its cases but regulators criticized them for using misleading statistics.
  • State Farm wrongfully denied claims after Hurricane Katrina because didn’t consider water damage to constitute a claim, and blamed other factors for causing damage so that they could deny claims.
  • Threatened to fire the engineering firm they hired to inspect Hurricane Katrina victims’ houses if they didn’t alter reports to stating that the damage was caused by something else, that they could use as reason to deny claims.
  • State Farm doesn’t want policyholders to know exactly what their policies do and do not cover.
  • When they finally agreed to re-evaluate their Hurricane Katrina claims they paid nearly $30 million in additional settlements.
  • Like Allstate, State Farm hired McKinsey & Co. and adopted the “three D’s” – deny the claim, delay the payment, and defend against a lawsuit.
  • Never paid the $3 billion dollar fines that they had against them for mishandling claims after the Northridge earthquake in 1994.
  • Bribed former insurance commissioner Chuck Quackenbush by donating $12 million to his non-profit foundations.
  • After tornadoes ravaged Oklahoma in 1999, homeowners filed a lawsuit against State Farm for allegedly trying to undervalue the damage to their homes or claim that the damage was caused by other factors like faulty construction.
  • Stopped writing new homeowner policies and embarked on a campaign of market withdrawals and non-renewals after Hurricane Katrina.
  • Funded a justice so that after he won the election he cast a crucial vote reversing a $9 billion dollar judgment against State Farm.
by DaShawna Murage November 5, 2014 at 06:19 PM
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