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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.
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Comment:State Farm Settles Lawsuit Over Coverage Disclosure.
Publication:Best's Review
Article Type:Brief Article
Geographic Code:1USA
Date:Jan 1, 2000
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