Printer Friendly

State Farm Settles Lawsuit Over Coverage Disclosure.

Admitting to mistakes in its disclosure of uninsured/underinsured motorists coverage, State Farm Insurance agreed to settle a lawsuit with Texas policyholders. The lawsuit, brought by current and former automobile insurance policyholders, alleged that State Farm misled policyholders on the amount of uninsured/underinsured coverage to which they were entitled.

State Farm will also have to provide policyholders with additional uninsured/underinsured coverage at no extra cost, according to the settlement.

State Farm in 1998 was the No. 1 auto insurer in Texas, which is the second-largest auto market in the United States, according to A.M. Best Co. data. State Farm Group had a 24.7% market share in the state, up from 22.6% in 1997.

State Farm's troubles began when it denied coverage for claims involving underinsured/uninsured motorists even though the Texas Supreme Court issued a decision requiring payment of such claims. State Farm is notifying all current and former policyholders who could be affected by the settlement. Final approval of the settlement is pending a fairness hearing to be held Feb. 25.

State Farm was also hit with a $1.19 billion verdict over its use of aftermarket auto parts in October.
COPYRIGHT 2000 A.M. Best Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2000, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Comment:State Farm Settles Lawsuit Over Coverage Disclosure.
Publication:Best's Review
Article Type:Brief Article
Geographic Code:1USA
Date:Jan 1, 2000
Words:197
Previous Article:Hartford Signs Medical Care For N.J. Workers Comp.
Next Article:MMI Plans to Exit Medical Stop-Loss Business.
Topics:


Related Articles
State Farm tries to silent whistleblower.
Beware: insurers' acts of 'kindness' are rarely random.
The Need for D&O Coverage.
Securing D&O in a hard market. (Insurance).
2002: insurers deal with a new crisis, old issues. (Industry Strategies).
High Court limits punitive damages in an appeal of State Farm decision. (Briefing).
Miss. sues for insurers to cover flood damage.
Not business as usual: faced with a record volume of claims and far from ideal circumstances, insurers have settled most personal lines claims from...

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters