I would like to respond to Mike\’s posting with some thoughts of my own.
The massive regulation of insurance companies by state insurance commissioners does little good when individual companies, with hundreds of attornies and billions of dollars in reserves that they can access for litigation in any state, will take whatever resources and means they can to keep little people with few resources from getting a fair settlement on their claims. Regulation and rate fixing does not prohibit companies from dragging out claims investigations, forcing people into a lengthy mediation processes and, in the end, just wearing them out so that they will take whatever offer is given to them in an effort to put the nightmare behind them.
Unfortunately, the free market system doesn\’t work as well after a catastophic loss has occurred. It would be nice to be able to change insurance companies after you have decided that the one that is refusing to settle your claim fairly is not dealing in good faith. The problem is that you can\’t run to another company and get them to pick up the claim where another leaves off. If you buy a car that is a lemon, at least you have some salvage value if you want to change products. Not so with insurance policies. You are stuck with trying to salvage whatever you can out of promises that lay people are generally unable to interpret without the help of an agent who they trusted at the time of purchase. What a surprise when at the time that your life is at its darkest, you find that the coverage that you have paid for for decades, and I mean literally decades, is going to be drug into litigation or mediation so that attornies can now take that \”easy to read\” policy and split each word and nuance into bits to save as many pennies as are possible.
Wouldn\’t it be so much easier if they just paid the $50,000 claims that are due, give the people the relief and help that they need and be the kind of blessings to ordinary people that they originally set out to be when the companies were formed. Instead, they use their staffs of hundreds of attornies to spend millions of dollars to avoid paying thousands. I know that this practice is being promoted as \”fairly analyzing the losses\” but in reality it is nothing more than a stall to get people to accept anything that they are offered so that they can get on with their lives and try to rebuild, even though they may end up in bankruptcy or deep depression.
You mention that AG Hood is forcing SF out of Mississippi. They are leaving on their own, because they do not want to take the chance of using future huge profits from the states that have not had huge loss ratios in to subsidise losses in MS. The law of large numbers ceases to work when you start diluting the exposure that created the megamillions that got you to be the number 1 casualty insurer in the nation. Just ask Mutual of Omaha. Once the greatest name in health insurance is nothing but a shadow of its previous self after withdrawing from the state of New York in an effort to fight legislation that demanded guaranteed issue coverage to all applicants. They too had reached a positon of dominance in their field, only to lose it when they started to limit their payments for profits sake.
Let just start by telling the truth, treating each other fairly and being satisfied with a job well done and stand up for what is right.
A few thousand? 2000 claims at $50,000 each is $100,000,000. I think that\’s a significant amount of money in anybody\’s estimate.
Think about what you are advocating.
You are seriously proposing that a company pay one hundred million dollars so they can \”do the right thing\”. You compllain that people paid premiums for decades and are now being shafted.
Why don\’t you allude to the tens of thousands of people who have had claims paid without these problems?
Why is it so hard for you to admit that if SF has paid out billions in claims and continued to business until legal action was taken against them?
What sparks from the axe you\’re grinding are blinding you to the facts.
Please spend less time ranting against the excesses of a corporation, and more time lokoing at the evidence.
State Farm has history of not releasing records
By Anita Lee
McClatchy Newspapers
In some cases, State Farm\’s top leadership prefers not to share or even keep records that offer insight into how policyholder claims are handled, according to court records.
Chairman and CEO Edward B. Rust Jr. said in sworn testimony earlier this month that no minutes are kept of quarterly meetings held by the company\’s top management, the Chairman\’s Council, and that policyholders have no right to information about an investigation State Farm Insurance Cos. has ordered of its relationship with Haag Engineering Co.
State Farm spokesman Phil Supple said the company doesn\’t \”intend to—;try this—;case in the media.\”
\”State Farm stands by testimony given by President and Vice Chairman Vince Trosino, who said when asked about these allegations, \’It\’s not part of our system. It\’s not part of our core values. It\’s not what made us the most successful property and casualty insurer, life insurer, in the country.\’\”
Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi\’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports.
Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.
In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.
In the Oklahoma case, after State Farm finally turned over to the court a \”claims legal research\” DVD and other records, Judge Richard G. Van Dyck told company attorneys
\”As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn\’t exist and couldn\’t be produced. So I\’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.\”
Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm\’s history of destroying and withholding records.
In 1998, Fye wrote in a Florida case
\”I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company\’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records.\”
In some cases, company executives did not keep records.
Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony Sept. 6 from Rust. Topics included Rust\’s Chairman\’s Council, made up of top State Farm executives. The group, which includes the company\’s general counsel, meets quarterly.
Marr was fishing for records of those meetings that he could subpoena for his lawsuit.
\”Certainly,\” Marr asked Rust, \”you keep records of the quarterly meetings where the entire Chairman\’s Council is present?\”
\”We have an agenda,\” Rust said, \”but minutes in that, no.\”
\”Why not?\” Marr asked.
Rust replied, \”Never felt a need to.\”
Marr later asked, \”Are there any written agendas that are available should I choose to request them in the lawsuit?\”
\”I\’m not sure what might be available,\” Rust said.
Rust also said policyholders, who essentially own the private mutual company, are not entitled to know what the Chairman\’s Council discusses or decides about litigation against State Farm, citing attorney-client privilege.
Marr questioned why the company would withhold information from policyholders, who own State Farm.
\”Well, again,\” said Rust (who has a law degree), \”I\’m not an expert in the area, but I think as you find — even if I\’m a shareholder in a publicly traded company, there are things that are not — you know, I do not have access to.\”
Marr later asked if policyholders have a right to see documents from State Farm\’s investigation of Haag.
Paste this link into your browser and you will see another side of the story. This article refers to many cases that have not been handled fairly. I am not saying that SF denies all of the claims that are filed, but there is certainly evidence that they mishandle a large number of them. Another issue that is addressed in the article is reinsurance. Since you are in control of so much evidence, how much of the losses that SF is denying would be covered by reinsurance anyway? I am not attacking anyone personally. I only want people to look more deeply into the lives that are being destroyed when a company doesn\’t keep their promises.
First, Insurance companies are NOT regulated by the federal govt. All regulation comes from the state. And it differs drastically from state to state.
second, SF has already suspended new policies and some renewals in certain areas, and had left the door open to more mass non renewals even before this litigation.
SF is using this as a punitive measure and thats fine its within there right under the law. At least its not cherry picking which really pisses alot of people off.
And by the way, cant say as to other states but in MS, commerical property and Casualty insurance while regulated, they are NOT required to ask for or receive rate increases from the state. 2005 prekatrina i paid 2500 per year for a small 50,000 dollar building and 40 in contents ( commercial ), year after Katrina it went to 4200, and this year to 13,500. NO surge water within 1000 yards of my business and only roof damage and ceiling damage due to water thru the roof. One of my customers his has gone from 26,000 per Katrina to 81,000 post katrina and he only had a claim of 31,000 for damage from katrina…..so while there may be strict residential controls, there are little or none in MS on commercial policies.
But i digress, The reality is SF will not write for a few years then come back and even if they dont, capitalism will keep companies here. There are currently over 225 companies doing P&C business in this state.
Melanie, I liked you better when you were ranting on the 16th; I wanted to party with you, girl! However, as of the 17th and 18th, I suspect you found your prozac and you seem much more mellow. Cut it out; I liked your incoherent, brainless ranting better. I made no sense, but it was really entertaining.
Jim Hood was surprised to find out a hurricane could cause so much damage; he was immediately surprised that what he had always called \’that windy storm thing\’ actually had a name…he immediately went into hiding, and like many people who get down, he started eating…Jim contacted his carrier (State Farm) and asked if they had information on carbohydrate and vitamin K; they said no, so he reported the flood loss to his Plymouth Reliant; later, Jim posted a letter on the local paper\’s website, offering hope to those in a similar situation. Jim\’s advice was valuable: \”It was right after katrina, and after eating us out of house, home, and a couple refrigerator racks. My wife told me State Farm had called, but I couldn\’t find the phone under all the twinkie wrappers and McDonald\’s cartons on the floor; I figured who cares, I was too cheap to get flood coverage, the only thing covered was my 83 Plymouth Reliant, and most of the fish smell was out since it had drived; I could wait; others had more pressing needs. I was getting hungry again, so I went out for some snacks and necessities. The dogs were getting whiny as I hadn\’t fed them, so I was in Wal-Mart; I had one cart full of Sam\’s brand pizzas and muffins, and I had a second cart to load several large bags of PXXXXX dog chow and was in line to check out. A woman behind me asked if I had any dogs; I thought \’yeah lady, I just buy this stuff for fun\’. But I tried to be polite, but she continued to pry, and I was feeling a bit crabby so on impulse, I told her no, I was starting dog food diet again (brand name withheld, but one of the namebrands), although I probably shouldn\’t because I ended up in the hospital last time. I opened the end of the bag and took out a handful and started eating the stuff. I was too hungover to taste anything, but it wasn\’t half bad. I embellished it abit and told her for meals, I sometimes pour beef broth over it and pretend it\’s roast beef with gravy. Continuing, I told the nosy twit I\’d lost 50 pounds the last time I tried the diet, but I awakened in an intensive care unit with tubes coming out of most of my body and IV\’s in both arms. Her eyes about bugged out of her head.
I went on and on with the bogus diet story and she was totally buying it. I told her that it was an easy, inexpensive diet and that the way it works is to load your pockets or purse with nuggets and simply eat one or two every time you feel hungry. The package said the food is nutritionally complete so I was going to try it again.
I have to mention here that practically everyone in the line was by now enthralled with my story, particularly a tall guy behind her. I was already on my second handful of nuggets, and a couple people behind me asked if they could try them and did. No one complained about the taste, and the tall guy even said it was pretty good; I even threw in a couple \’vote for Jim\’ bumper stickers…
Horrified, the lady asked if something in the dog food had poisoned me and was that why I ended up in the hospital.
I said no…..I\’d been sitting in the street licking my butt when a car hit me.\”
Now, back to that Reliant; never could get the smell out of the carpet…
I think what really chaps Melanies hide is that State Farm usually ranks third nationwide for customer satisfaction in
Consumer Reports, the same as I saw in the
insurance commissioners report for our state. Melanie, that is out of hundreds
of companies doing business nationwide and statewide. Third. Not bad for the largest property insurer in America who
employs thousands of people. And you want to replace that with government? Maybe you have received better service from government organizations than I have.
Here in Washington, where big government has run rampant and one can really live large on the government teat, I still have to say I want less government. Unlike Romando, mindless ranting chicks went out of style after my freshman year of college. Too much of a good thing for me, I guess.
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Mike, Why is it an claims adjuster dose not have to have a license anymore? Melanie
I would like to respond to Mike\’s posting with some thoughts of my own.
The massive regulation of insurance companies by state insurance commissioners does little good when individual companies, with hundreds of attornies and billions of dollars in reserves that they can access for litigation in any state, will take whatever resources and means they can to keep little people with few resources from getting a fair settlement on their claims. Regulation and rate fixing does not prohibit companies from dragging out claims investigations, forcing people into a lengthy mediation processes and, in the end, just wearing them out so that they will take whatever offer is given to them in an effort to put the nightmare behind them.
Unfortunately, the free market system doesn\’t work as well after a catastophic loss has occurred. It would be nice to be able to change insurance companies after you have decided that the one that is refusing to settle your claim fairly is not dealing in good faith. The problem is that you can\’t run to another company and get them to pick up the claim where another leaves off. If you buy a car that is a lemon, at least you have some salvage value if you want to change products. Not so with insurance policies. You are stuck with trying to salvage whatever you can out of promises that lay people are generally unable to interpret without the help of an agent who they trusted at the time of purchase. What a surprise when at the time that your life is at its darkest, you find that the coverage that you have paid for for decades, and I mean literally decades, is going to be drug into litigation or mediation so that attornies can now take that \”easy to read\” policy and split each word and nuance into bits to save as many pennies as are possible.
Wouldn\’t it be so much easier if they just paid the $50,000 claims that are due, give the people the relief and help that they need and be the kind of blessings to ordinary people that they originally set out to be when the companies were formed. Instead, they use their staffs of hundreds of attornies to spend millions of dollars to avoid paying thousands. I know that this practice is being promoted as \”fairly analyzing the losses\” but in reality it is nothing more than a stall to get people to accept anything that they are offered so that they can get on with their lives and try to rebuild, even though they may end up in bankruptcy or deep depression.
You mention that AG Hood is forcing SF out of Mississippi. They are leaving on their own, because they do not want to take the chance of using future huge profits from the states that have not had huge loss ratios in to subsidise losses in MS. The law of large numbers ceases to work when you start diluting the exposure that created the megamillions that got you to be the number 1 casualty insurer in the nation. Just ask Mutual of Omaha. Once the greatest name in health insurance is nothing but a shadow of its previous self after withdrawing from the state of New York in an effort to fight legislation that demanded guaranteed issue coverage to all applicants. They too had reached a positon of dominance in their field, only to lose it when they started to limit their payments for profits sake.
Let just start by telling the truth, treating each other fairly and being satisfied with a job well done and stand up for what is right.
Melanie
Adjustors need a license in Texas.
And as for your fraud statement a dozen or so entries back, fraud laws do apply to insurance.
A few thousand? 2000 claims at $50,000 each is $100,000,000. I think that\’s a significant amount of money in anybody\’s estimate.
Think about what you are advocating.
You are seriously proposing that a company pay one hundred million dollars so they can \”do the right thing\”. You compllain that people paid premiums for decades and are now being shafted.
Why don\’t you allude to the tens of thousands of people who have had claims paid without these problems?
Why is it so hard for you to admit that if SF has paid out billions in claims and continued to business until legal action was taken against them?
What sparks from the axe you\’re grinding are blinding you to the facts.
Please spend less time ranting against the excesses of a corporation, and more time lokoing at the evidence.
State Farm has history of not releasing records
By Anita Lee
McClatchy Newspapers
In some cases, State Farm\’s top leadership prefers not to share or even keep records that offer insight into how policyholder claims are handled, according to court records.
Chairman and CEO Edward B. Rust Jr. said in sworn testimony earlier this month that no minutes are kept of quarterly meetings held by the company\’s top management, the Chairman\’s Council, and that policyholders have no right to information about an investigation State Farm Insurance Cos. has ordered of its relationship with Haag Engineering Co.
State Farm spokesman Phil Supple said the company doesn\’t \”intend to—;try this—;case in the media.\”
\”State Farm stands by testimony given by President and Vice Chairman Vince Trosino, who said when asked about these allegations, \’It\’s not part of our system. It\’s not part of our core values. It\’s not what made us the most successful property and casualty insurer, life insurer, in the country.\’\”
Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi\’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports.
Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.
In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.
In the Oklahoma case, after State Farm finally turned over to the court a \”claims legal research\” DVD and other records, Judge Richard G. Van Dyck told company attorneys
\”As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn\’t exist and couldn\’t be produced. So I\’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.\”
Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm\’s history of destroying and withholding records.
In 1998, Fye wrote in a Florida case
\”I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company\’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records.\”
In some cases, company executives did not keep records.
Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony Sept. 6 from Rust. Topics included Rust\’s Chairman\’s Council, made up of top State Farm executives. The group, which includes the company\’s general counsel, meets quarterly.
Marr was fishing for records of those meetings that he could subpoena for his lawsuit.
\”Certainly,\” Marr asked Rust, \”you keep records of the quarterly meetings where the entire Chairman\’s Council is present?\”
\”We have an agenda,\” Rust said, \”but minutes in that, no.\”
\”Why not?\” Marr asked.
Rust replied, \”Never felt a need to.\”
Marr later asked, \”Are there any written agendas that are available should I choose to request them in the lawsuit?\”
\”I\’m not sure what might be available,\” Rust said.
Rust also said policyholders, who essentially own the private mutual company, are not entitled to know what the Chairman\’s Council discusses or decides about litigation against State Farm, citing attorney-client privilege.
Marr questioned why the company would withhold information from policyholders, who own State Farm.
\”Well, again,\” said Rust (who has a law degree), \”I\’m not an expert in the area, but I think as you find — even if I\’m a shareholder in a publicly traded company, there are things that are not — you know, I do not have access to.\”
Marr later asked if policyholders have a right to see documents from State Farm\’s investigation of Haag.
\”No,\” Rust said.
\”Why not?\” Marr asked. \”Is it privileged?\”
Rust said, \”I believe so.\”
(c) 2006, The Sun Herald (Biloxi, Miss.).
Paste this link into your browser and you will see another side of the story. This article refers to many cases that have not been handled fairly. I am not saying that SF denies all of the claims that are filed, but there is certainly evidence that they mishandle a large number of them. Another issue that is addressed in the article is reinsurance. Since you are in control of so much evidence, how much of the losses that SF is denying would be covered by reinsurance anyway? I am not attacking anyone personally. I only want people to look more deeply into the lives that are being destroyed when a company doesn\’t keep their promises.
http://www.sunherald.com/mld/sunherald/business/industries/insurance/16725585.htm
First, Insurance companies are NOT regulated by the federal govt. All regulation comes from the state. And it differs drastically from state to state.
second, SF has already suspended new policies and some renewals in certain areas, and had left the door open to more mass non renewals even before this litigation.
SF is using this as a punitive measure and thats fine its within there right under the law. At least its not cherry picking which really pisses alot of people off.
And by the way, cant say as to other states but in MS, commerical property and Casualty insurance while regulated, they are NOT required to ask for or receive rate increases from the state. 2005 prekatrina i paid 2500 per year for a small 50,000 dollar building and 40 in contents ( commercial ), year after Katrina it went to 4200, and this year to 13,500. NO surge water within 1000 yards of my business and only roof damage and ceiling damage due to water thru the roof. One of my customers his has gone from 26,000 per Katrina to 81,000 post katrina and he only had a claim of 31,000 for damage from katrina…..so while there may be strict residential controls, there are little or none in MS on commercial policies.
But i digress, The reality is SF will not write for a few years then come back and even if they dont, capitalism will keep companies here. There are currently over 225 companies doing P&C business in this state.
Melanie, I liked you better when you were ranting on the 16th; I wanted to party with you, girl! However, as of the 17th and 18th, I suspect you found your prozac and you seem much more mellow. Cut it out; I liked your incoherent, brainless ranting better. I made no sense, but it was really entertaining.
Jim Hood was surprised to find out a hurricane could cause so much damage; he was immediately surprised that what he had always called \’that windy storm thing\’ actually had a name…he immediately went into hiding, and like many people who get down, he started eating…Jim contacted his carrier (State Farm) and asked if they had information on carbohydrate and vitamin K; they said no, so he reported the flood loss to his Plymouth Reliant; later, Jim posted a letter on the local paper\’s website, offering hope to those in a similar situation. Jim\’s advice was valuable: \”It was right after katrina, and after eating us out of house, home, and a couple refrigerator racks. My wife told me State Farm had called, but I couldn\’t find the phone under all the twinkie wrappers and McDonald\’s cartons on the floor; I figured who cares, I was too cheap to get flood coverage, the only thing covered was my 83 Plymouth Reliant, and most of the fish smell was out since it had drived; I could wait; others had more pressing needs. I was getting hungry again, so I went out for some snacks and necessities. The dogs were getting whiny as I hadn\’t fed them, so I was in Wal-Mart; I had one cart full of Sam\’s brand pizzas and muffins, and I had a second cart to load several large bags of PXXXXX dog chow and was in line to check out. A woman behind me asked if I had any dogs; I thought \’yeah lady, I just buy this stuff for fun\’. But I tried to be polite, but she continued to pry, and I was feeling a bit crabby so on impulse, I told her no, I was starting dog food diet again (brand name withheld, but one of the namebrands), although I probably shouldn\’t because I ended up in the hospital last time. I opened the end of the bag and took out a handful and started eating the stuff. I was too hungover to taste anything, but it wasn\’t half bad. I embellished it abit and told her for meals, I sometimes pour beef broth over it and pretend it\’s roast beef with gravy. Continuing, I told the nosy twit I\’d lost 50 pounds the last time I tried the diet, but I awakened in an intensive care unit with tubes coming out of most of my body and IV\’s in both arms. Her eyes about bugged out of her head.
I went on and on with the bogus diet story and she was totally buying it. I told her that it was an easy, inexpensive diet and that the way it works is to load your pockets or purse with nuggets and simply eat one or two every time you feel hungry. The package said the food is nutritionally complete so I was going to try it again.
I have to mention here that practically everyone in the line was by now enthralled with my story, particularly a tall guy behind her. I was already on my second handful of nuggets, and a couple people behind me asked if they could try them and did. No one complained about the taste, and the tall guy even said it was pretty good; I even threw in a couple \’vote for Jim\’ bumper stickers…
Horrified, the lady asked if something in the dog food had poisoned me and was that why I ended up in the hospital.
I said no…..I\’d been sitting in the street licking my butt when a car hit me.\”
Now, back to that Reliant; never could get the smell out of the carpet…
I think what really chaps Melanies hide is that State Farm usually ranks third nationwide for customer satisfaction in
Consumer Reports, the same as I saw in the
insurance commissioners report for our state. Melanie, that is out of hundreds
of companies doing business nationwide and statewide. Third. Not bad for the largest property insurer in America who
employs thousands of people. And you want to replace that with government? Maybe you have received better service from government organizations than I have.
Here in Washington, where big government has run rampant and one can really live large on the government teat, I still have to say I want less government. Unlike Romando, mindless ranting chicks went out of style after my freshman year of college. Too much of a good thing for me, I guess.