State Farm is undoubtedly the largest property and casualty insurance provider in the United States. It features a variety of policies for auto, life, and home insurance. Although these are somewhat on the pricier side compared to its competitors, State Farm makes up for it by extending special discounts.
Like any other company, State Farm has basic, cookie-cutter contracts - you pick a policy and pay the premium. On the occurrence of a mishap, you submit a claim, and your insurer pays the specific benefits. At least, that’s the way it is supposed to work.
Unfortunately, the insurance industry regularly dishonors these rights. Things have gotten so bad that each state has its individual governmental agency to regulate the insurance industry. In Texas, this is our Department of Insurance.
Despite being an established business, the American Association for Justice (AAJ) ranks State Farm as the fourth worst insurer in America, despite State Farm arrogance in referring to itself as a good neighbor.
The AAJ’s report entitled The Ten Worst Insurance Companies in America – How They Raise Premiums, Deny Claims, and Refuse Insurance to Those Who Need It Most, did an all-encompassing, in-depth investigation of several insurance companies showing a consistently distressing trend. Some of the industry’s most prominent names have repeatedly been cutting corners, choosing strategies that shortchange consumers’ benefits, and refuse to fully pay most claims.
Thousands of court documents, SEC records, FBI reports, and state insurance department publications were researched and investigated. Testimony of insurers’ former adjusters and agents were also looked into for a better view of the situation. Besides its “3D” (deny, delay, defend) approach, the company also has a long standing history of failing to renew the policies.
Bad Faith Insurance Practices By State Farm
According to the American Association for Justice, State Farm is accused of shady, unfair practices in the following categories:
Acting recklessly –Homeowners insured with State Farm have brought a class lawsuit action against the company as they habitually undervalue their properties. A jury found that State Farm acted recklessly and with malice in most of its claims in this case.
Denying, delaying, and defending claims –Very much like Allstate, State Farm has also been denying claims, delaying payments, and defending lawsuits that should have been solved promptly. Unfortunately, all of it is done in the name of “bottom line.” State Farm avoids paying claims at all costs and denys/delays payments to the extent of even forging customers signature on important polict documents.
Mishandling Katrina claims –State Farm was notorious in mishandling homeowners’ claims related to the devastation left by Hurricane Katrina in the year 2005. Home inspectors clearly testified how State Farm instructed them to alter damage reports, so the company could cheat its customers and pay less than the claims were actually worth.
Putting profits over policyholders –State Farm advertises, “Like a good neighbor, State Farm is there.” All they have been doing is talking the talk but not walking the walk. State Farm falls short in serving their customers in Dallas, Fort Worth, Lewisville, Farmers Branch, and all over Texas.
Signs that State Farm maybe handling your claims in bad faith include the following:
- Lack of communication
- Unreasonable delays
- Failure to investigate claim
- Misinterpreting policy
- Omitting material facts
- Underpaying claims
- Irrational denial of coverage
- Unjustified demands for documentations
According to a 2019 Consumer Report survey, State Farm and nine other insurers were listed as the ten worst auto insurance companies. WITHOUT DOUBT, State Farm has not been delivering as promised. It’s paid actors put a friendly face on State Farm in its advertisements, but the short-term bottom line will always be a priority for companies like State Farm.
According to customer ratings on websites such as Yelp, FreeAdvice, etc., most respondents have reported how unsatisfied they have been with State Farm insurance company. The following comments have been posted on Yelp by people who were insured by State Farm. Out of 62 reviews, 52 reviews cite a 1-star rating. These are people who have experienced poor customer service time and again, even though they had a clear claim record or were dealing with their first-ever genuine claim:
Monica M. wrote on 10/19/2020:
“Been with them for 25 Years. Had 1 Claim for water damage to the carpet due to a washing machine malfunction. It has been 8 weeks! And the repair is still not done. Chad Mullins in their Bay Area office never calls or emails, maybe he is overworked?? This is not a big repair, but no calls - just invoices that I have to send to my bank to get approved - What?? I am beyond frustrated with the total and complete lack of Customer Service. I seriously want the job finished. Looking for a new Insurance Company.”
Karyn P. wrote on 8/23/2020:
“I agree with 99% of all these poor reviews. Been with State Farm for over 30+ years with zero claims. Called them for a 2nd property we had recently purchased as an investment and insured through them as well. Leak discovered in a faulty refrigerator (home inspection missed it apparently? No coverage for any damages? Which, I guess must be our fault (we missed it in the home inspection?) So, no monies paid out... and now guess what... our rates are increased across the board...DUE TO A CLAIM!!! And, of course we are switching companies-but now we are "high risk"..with a zero dollar paid claim!! I will boycott this company until the day I die. And will continue to post negative reviews every chance I get on every platform.”
Dorrie L. wrote on 8/11/2020:
“Great commercials. Crappy, dishonest adjusters. My experience.”
Ken B. wrote on 7/19/2019:
“My mother is 81 and has been with state farm for over 60 years. Last week she got rear ended by a person that also had state farm. SF will not repair her car because of the cost to value ratio. Instead they said they will cut her a check. Fair enough. However before she will receive the check until after her rental car is due back and they will not approve an extension for a few more days. Now she has no car and cannot shop for a car until she receives the check from SF and when she does receive the check she will have no way of getting around to do that car shopping.60 year customer and they don't care.”
Donna G. wrote on 6/26/2020
“I have been paying into state farm homeowner insurance for 20 years. I also pay for floaters and earthquake add ons. I have never filed a claim. A few weeks I noticed a leak from the attic. Immediately I called a HVAC company. They came out that day and flushed the drain from the AC upstairs unit. The asked me to call them back if the leak continued. I called them the next day (which was Saturday). They came back on Monday and added a new pan that fixed the leak.
I called state farm and they recommended a home repair company to provide an estimate. After that a state farm agent came to my home to look at the damage. THE CLAIM WAS REJECTED BECAUSE THE DAMAGE WAS CAUSED BY A DRIP INSTEAD OF A GUSH OF WATER. I think this company is a complete rip-off, only able to take your money. 20 years of payment, this was my first claim. I feel completely scammed.”
There are more painful and upsetting experiences that people have quoted over the years. Reviewers talk about poor communication, uninformed price change, fraudulent claims made by adjusters, and whatnot. Even BBB reviews have several 1-star ratings and state how State Farm fraudulently denies claims in genuine cases. SiteJabber reviews too affirm the same horrible story. People face such terrible experiences; one person even discusses how State Farm made them so mad, they had to be put onto blood pressure pills due to the stress and delays.
About State Farm
The company was founded in 1922 and had ever since been serving clients in the whole of the US. They sell over 100 products and services broadly classified under five different categories: annuity, banking, life and health, mutual funds, and property and casualty. It is also, in fact, the country’s largest private passenger auto insurance provider. People looking for a well-known label offering a generous selection often choose State Farm.
Good Neighbor Becoming A Bad Neighbor
Perhaps to your surprise, such immensely popular insurance companies do not always play fair. Just because your policy mentions, “like a good neighbor,” it does not mean you really are in good hands or companionship. Your good neighbor may, unfortunately, turn into a lousy neighbor when it pursues its ulterior motives.
State Farm has denied too many legit claims in the last few years. But you do not have to give up on your request – you still have legal options available. A dedicated attorney can review your case for its specific circumstances and determine the right course of action.
Your insurance claim may be divided into two categories:
- First-party claim
- Third-party claim
Being a State Farm customer, if you are to bring a claim against your own policy, this would mean that you are bringing a first-party claim.
In case you are bringing a case against another policyholder who may be a State Farm insured, this invites a third-party claim.
Depending on the facts of your case, different types of claims would apply. Regardless of whether you are an actual State Farm customer or not, State Farm certainly owes duties to conduct its affairs reasonably. They must handle the claim carefully and using good faith settlement practices.
State Farm actually has a legal obligation to process valid first-party claims without unfair denials. Victims of bad faith settlement are entitled to full value compensation, including any additional relief. If your claim is denied, you may receive an official letter explaining why - they have to explain their position. So get this letter and all other material into the hands of a qualified attorney in Texas as soon as possible to help you with your case. It is the attorney who can help you determine the next steps.
How Does State Farm Compare To Its Competition?
Insurance companies that work solely for short-term profit make big money in two ways:
- Minimize the amount in settling claims
- Maximize amount pulled in through premiums
Some companies focus on charging higher premiums from customers, while others aggressively deny claims to reduce their expenses. Where the company falls in this spectrum indicates the outsized impact on your case. The kind of attitude State Farm brings to the table determines how much of a fight you have on your hands. However, in this particular case, State Farm somewhat falls in the middle of the spectrum. They make outrageously low offers compared to what their competition would make in their initial settlement packages. If you decide to refuse this offer, it shows the insurer that you are aware of your legal rights and understand what you are entitled to receive
What Is It Like To Deal With State Farm?
State Farm, as an insurance company, is as big as any insurance firm can get in America. They are, far and away, the among largest insurers in the country, and with a market share of more than 15%, you can understand their business standing. This usually assures the policyholders that they are contracting with an established company and can contact them anytime they might need help.
On the contrary, this is often not the case. It would not be incorrect to stay that State Farm does not like to spend on claims and often rejects claims it should have paid.
They are more into generating profits than accommodating the required and mandatory help to policyholders. According to a CNN investigative report by Anderson Cooper, “deny, delay, and defend” is their motto. State Farm does all in its power to force victims until they are desperate, so they settle for low-ball compensation.
Seeking Compensation Through Litigation
Refusing the initial offer would not change the offer – it happens only in the rarest cases. When you file a lawsuit against State Farm, the case moves from its adjusters to attorneys. The adjuster only works to make you an offer that may be acceptable but as low as possible. Attorneys, on the other hand, defend the case before a jury in the court. But they may offer settlements closer to what you deserve or face the possibility of a jury giving you every penny you deserve. Hence it may not be unusual for the settlement offer to double once the lawsuit is filed. The justified compensation potentially increases 3 or 4 times as the trial date nears. In general, both State Farm’s adjusters and its lawyers know what the claim is worth, but the adjusters don’t have any negative consequences for screwing you over. The lawyers, on the other hand, have to present the case to a jury and play in the “real world.”
How Can Samples Ames Help?
There is no doubt that insurance companies all over America frequently play by their own rules. This may be particularly true when it is about a company’s personal profits. If you are in or around Dallas, Fort Worth, Lewisville, and Farmers Branch, and State Farm has rescinded your policy or a claim you deem valid is denied, it may be an act of bad faith.
Contact Samples Ames PLLC skilled and practiced personal injury attorneys who can assist you in this matter. We know the laws that will help you receive the deserved claim amount. Our consultations are free, you are under no obligation, and the case remains strictly confidential. Get in touch with our Dallas team at (469) 466-2600 or the Fort Worth team at (817) 605-1505. Our offices in Texas Dallas and Fort Worth serve all the nearby counties. You can also fill out this contact form and a Samples Ames PLLC representative will call to set an appointment, so you do not have to suffer anymore.