Insurance Consumer Advocate Network
Tempe, AZ (10/04/99) - The Insurance Consumer Advocate Network (I-Can), an Internet-based insurance consumer advocacy effort, applauds the insight and integrity of the four man eight woman jury in Marion, Illinois that has spent the past several weeks considering evidence which disclosed fraudulent and deceptive claims handling practices engaged in by State Farm Insurance Company. This jury, having been privy to over 200 pieces of documentary evidence, including a number of confidential State Farm internal documents, has returned with a finding that State Farm has been systematically engaged in fraudulent and deceptive business practices designed to cheat insured out of a substantial portion of their auto damage insurance claims settlements.
Applauds Judgment Against State Farm
That jury, upon their oath and after due and diligent deliberation, returned with a finding that State Farm Insurance Company had, in fact, engaged in fraudulent and deceptive practices as alleged and levied a civil judgment against State Farm in the amount of 456,000,000.00. However, this civil judgment represents only a portion of the potential over-all impact this case will have on State Farm. Criminal fraud penalties are still pending.
Many of the incriminating documents that exposed the seamier side of State Farm were accessed through the efforts of the Coalition for Collision Repair Equality (CCRE). The CCRE is a national network in support of independent collision repair facilities whose participants have been challenging many of the less-than-ethical insurance industry practices for years. “The issue in this specific case had to do with State Farm requiring that insured vehicles be repaired with low quality and potentially dangerous after-market replacement body parts” says Mark Pierson, President of the CCRE. Mr. Pierson went on to say that "When State Farm coerced insured to have their vehicles repaired at State Farm 'Approved' repair facilities, those shops were required to keep the vehicle owners 'Blind' to the inherent defects of the repair under threat of that shop being removed from State Farm's 'Service First' job referral program. There are literally Millions of State Farm insured whose vehicles have lost substantial resale value as a direct result of State Farm's fraudulent and deceptive claims handling practices."
Dennis Howard, executive director of I-Can, points out that “State Farm does not stand alone as the sole practitioner of these fraudulent and deceptive practices. There are dozens of other such law suits pending against Allstate, Farmers Group, GEICO, Mercury, Nationwide, Progressive and USAA insurance companies for engaging in the same illegal conduct.” Mr. Howard goes on to say that "This State Farm case is just the first of many consumer victories that will be won over the next few years."
The other cases are not limited to the mandated use of inferior body parts. The others will also be exposing how insurance companies systematically defraud insured by artificially suppressing auto insurance claim settlements on both Reparable and Total Loss vehicles.
In this era of record profits, record dividends, and obscene executive bonuses the insurance industry has lost their credibility when they claim “If we do that . . . premiums will go up.” It was clearly shown in this case that State Farm could easily have delivered the full measure service they had promised without impacting their financial stability.