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State Farm subsidiary agrees to $100 million settlement



State Farm subsidiary agrees to $100 million settlement

State Farm Fireplace and Casualty Firm – a subsidiary of US insurance coverage large State Farm – has agreed to pay the federal authorities some $100 million in restitution over its alleged mismanagement of flood insurance coverage claims associated to Hurricane Katrina.

The insurer pays the $100 million in restitution to the federal authorities, and to not particular person policyholders.

In accordance with the Related Press, the settlement marks the top of authorized proceedings which started over 16 years in the past, when former adjusters Cori and Kerri Rigsby filed a lawsuit in opposition to State Farm for allegedly shifting state claims to the federal Nationwide Flood Insurance coverage Program (NFIP) when the claims ought to have been paid by personal insurance coverage as an alternative.

As a part of the settlement, State Farm has additionally agreed to dismiss the counterclaims it filed in opposition to the Rigsby sisters. The insurer had alleged that the 2 had breached their employment agreements and infringed different legal guidelines by taking the corporate’s paperwork whereas working as impartial contractors.

Learn extra: High 10 largest residence insurance coverage suppliers within the US in 2022

Dad or mum firm State Farm was ranked the biggest residence insurer within the US by the Nationwide Affiliation of Insurance coverage Commissioners for 2022. As of April 2022, State Farm commanded 24.26% of the US residence insurance coverage market, with direct premiums written of $22 billion and direct premiums earned of $20.7 billion.

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