Entries in State Farm (4)


State Farm Faces Criminal Investigation over Hurricane Claims

Tim Boyle/Getty Images(NEW YORK) -- State Farm Insurance, the nation's largest home insurer, faces a new criminal investigation in Texas related to how it handled potentially tens of thousands of hurricane claims there, ABC News has learned exclusively.

Gregg Cox, who leads the public integrity unit of the Travis County District Attorney's office in Austin, confirmed to ABC News that his investigators recently launched the probe after reviewing newly released communications from top State Farm managers in Texas.  Some of the same communications have led to lawsuits by customers who say they were defrauded by State Farm Lloyds, the Texas subsidiary of the larger insurance company.

The documents in question relate to an alleged cover-up by State Farm management related to its denial of consumer insurance claims for a common type of roof damage that occurs during high wind events and hurricanes.

Jim Warner, a longtime homeowner in Missouri City, Texas, had been a customer of State Farm Insurance for more than 20 years before finding himself in the center of the now brewing criminal investigation.  He says he had never filed an insurance claim until Hurricane Ike in 2008 and had always paid his monthly bills to State Farm on time.

However, Warner filed suit against State Farm after he says the company did not follow through on its slogan that promises, "Like a good neighbor, State Farm is there."  Warner always believed his policy would cover all types of damage to his roof, but when he went to file a claim he says he was shocked to learn that was not the case.

Warner's lawsuit alleges that State Farm documents establish a clear internal policy of intentionally denying consumer claims for roof damage similar to what Warner experienced.  Warner's attorney, Steve Mostyn, claims the systematic denial of those types of claims may have quietly saved State Farm close to $1 billion.

Mostyn says State Farm documents obtained in the lawsuit reveal an attempt by managers to hide the company's policy of non-payment from state insurance regulators.

"They absolutely went through an effort to cover it up," Mostyn said.  "These emails are coming from the top.  They're setting policy.  And that policy by their own admission … shows conclusively they have not paid thousands of people."

In Warner's case, his problems began after he says the high winds of Hurricane Ike caused the shingles on his roof to become "lifted."  Those winds, Warner alleges in his suit, broke the seal under Warner's shingles that normally create a water-tight barrier.  Warner says an independent adjuster he hired agreed the damage was extensive and recommended Warner's roof be replaced.

Warner alleges, however, State Farm repeatedly refused to admit the unsealed tabs were damage that should be paid under the policy.  So Warner filed a consumer complaint with the Texas Department of Insurance, hoping the regulator could help.  However, Warner's lawsuit says it was during that very investigation of his complaint to insurance regulators that State Farm began to cover up its practices of refusing to pay for this kind of damage.

ABC News reviewed documents obtained in the lawsuit including an initial draft of State Farm's response to insurance regulators about Warner's complaint.  In that draft letter, State Farm clearly disclosed how the company did not pay for insurance claims related to broken seals on roofs, saying, "Regarding the detached seals, there is no coverage as this condition is not considered… physical loss."

However, when the "catastrophe section manager" for State Farm saw that statement written out, he directed it be removed from what state regulators would be told, instructing, "This letter needs to be revised to delete the reference to unseal tab."

The reference was subsequently removed, and that same catastrophe manager then forwarded the newly revised letter to other unnamed colleagues at State Farm "for your review" before it was sent off to the state.

Attorney Mostyn says State Farm fought hard to keep from having to disclose those and other documents, but lost the fight.  He says other documents show the insurer attempting to delete other references to the company's policy of not paying lifted-shingles claims.

Warner's lawsuit alleges that nearly 100,000 people may have had their claims for similar problems wrongly denied, estimating that many additional consumers who did not hire independent investigators to inspect their roofs may be unaware they are actually damaged today and susceptible to problems in future windstorms.

ABC News has confirmed grand jury subpoenas have been served to State Farm.

"We have requested a large amount of information from them, and they are complying with our requests," said Cox.

State Farm declined an interview request for this story.  However, the insurer said in a statement that, "State Farm Lloyds is cooperating fully with the Travis County investigation and has successfully settled the majority of civil litigation involving Hurricane Ike claims.  To date, we have paid policyholders more than $1.5 billion dollars, much of which went to repair or replace roofs.  We have been actively working to resolve questions related to roofing shingle claims.  We will continue these efforts to maintain the trust of Texas homeowners, of which more than one in six has placed their confidence in State Farm Lloyd's to protect their homes."

State Farm Lloyds says it will soon file papers with the court disputing the claims made in Warner's recently amended lawsuit.

Copyright 2012 ABC News radio


Fall Danger: How to Avoid Deer Versus Car Crashes

iStockphoto/Thinkstock(BLOOMINGTON, Ill.) -- As the nation heads deeper into the fall season, the chances of Americans having a car crash involving a deer greatly increases.

More than a million deer-versus-car collisions occur annually in the U.S., according to data released Monday by State Farm Insurance.

The good news: that represents a 7 percent decline from the previous year.  The bad news: November and October, respectively, are the two most dangerous months for hitting a deer.

“State Farm’s data shows that November, the heart of the deer migration and mating season, is the month during which deer-vehicle encounters are most likely,” the insurer said in a statement.  “More than 18 percent of all such mishaps take place during the 30 days of November.”

Drivers in West Virginia carry the greatest risk of hitting a deer with their car -- a 1 in 53 chance -- according to State Farm.  The best place to drive, deer-free, appears to be Hawaii.

“The odds of a Hawaiian driver colliding with a deer between now and 12 months from now are approximately equal to the odds that that driver is a practicing nudist,” said the insurer.

[Click here to view State Farm’s map and see how your state ranks]

It can be a costly accident; State Farm estimates that the average cost of car repairs after a deer collision is more than $3,000.

To reduce your chances of hitting a deer, State Farm offers the following tips:  Be aware of posted deer crossing signs.  These are placed in active deer crossing areas.

Remember that deer are most active between 6 p.m. and 9 p.m.  Use high-beam headlamps as much as possible at night to illuminate the areas from which deer will enter roadways.  Keep in mind that deer generally travel in herds -- if you see one, there is a strong possibility others are nearby.

Copyright 2011 ABC News Radio


Beware: October Most Dangerous Month for Teen Drivers

Photo Courtesy - Getty Images(BLOOMINGTON, Ill.) -- October is the most dangerous month for teen drivers, according to a new report by insurance provider State Farm.

The company says that over the past seven years, 16- and 17-year-old drivers in the U.S. and parts of Canada most often filed injury or collision claims during October, a rate 15 percent higher when compared to other months. The data was representative of claims filed to State Farm between 2003-2009.

A recent survey conducted by Harris Interactive showed that 57 percent of teens admit to sending and reading text messages while driving.

Copyright 2010 ABC News Radio´╗┐


West Virginia Has Highest Risk of Deer-Car Accidents

Photo Courtesy - Getty Images(BLOOMINGTON, Ill.) -- For the fourth year in a row, West Virginia tops the list of states where a driver is most likely to collide with a deer.  Auto insurer State Farm determined a driver's odds of hitting a deer in the state is one-in-42.

Iowa ranks second on the list, with odds of one-in-67, followed by Michigan with one-in-70.  Hawaii finishes off the list in last place,  with the odds of striking a deer standing at one-in-13,011.

State Farm said while the number of miles driven by U.S. motorists over the past five years has increased just two percent, the number of deer-vehicle collisions in this country during that time has grown by 10 times that amount.

Using its claims data, the company estimated 2.3 million collisions between deer and vehicles occurred in the U.S. during the two-year period ending on June 30. That's 21.1 percent more than five years earlier.

According to the Insurance Institute for Highway Safety, deer-vehicle collisions in the U.S. cause about 200 fatalities each year. The average damage to a car or truck is $3,103.

The deer migration and mating season falls in the months of October, November and December, which happens to be the time period with the highest number of deer-car collisions.  More accidents are expected this year than in past seasons, since the deer population is growing and their habitats are being displaced by urban sprawl.´╗┐

Copyright 2010 ABC News Radio

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