State Farm Fined $4 Million by Montana Insurance Commissioner
Missoula, MT (KGVO-AM News) - Montana Commissioner of Securities and Insurance, Troy Downing, announced on Tuesday that a settlement has been reached with State Farm Mutual Automobile Insurance Company in which State Farm will pay a $2 million fine and an extra $2 million be set aside to cover damages.
KGVO News spoke with Downing who described the violation and the fines against one of the largest insurance companies in the United States.
Downing's Office fined State Farm Insurance over $4 Million
“We just got a settlement agreement with State Farm and essentially it was on their denials of payments to victims and auto accidents,” began Downing. “To make it really clear what was happening is sometimes when there was an accident and somebody was hit, if State Farm was insuring the person who caused the accident, they would inappropriately put part of the cause called ‘contributory negligence’ on the victim.”
After several complaints by insured parties, Downing said his office began an investigation called a market examination.
Downing said State Farm was not Treating its Customers Fairly
“We found in a market examination that they were not treating these consumers correctly and not paying what they were required to by law,” he said. “Because of that we did what's called a market examination of the company, and after uncovering some of this, including some new stuff we uncovered with a requirement to cover loss of use, such as to pay for a rental car, which came up in this examination. However, after going through this process, we came to an agreement with State Farm and they've agreed to accept a $4 million fine.”
Downing explained the fines and restitution demanded by his agency against State Farm Insurance.
State Farm has already Paid over $1 Million in Payments to Montana Victims
“$2 million of that will be waived if in a year from now, they pass a market exam that shows that they fixed the problem,” he said. “Then there's also a requirement of restitution. And right now that restitution is about $1.2 million, but that will probably change as they start going through the records to see who may have been inappropriately a part of this.”
Downing said State Farm has already reviewed over 2,400 Montana claims and has made an additional $1,182,927.43 in payments to Montana consumers.
Anyone with questions about their claims against State Farm should contact his office at 406-444-2040, visit the agency’s website at csimt.gov.