A Texas judge ruled that State Farm Insurance must repay $310 million in premiums and back interest to Texas customers for overcharging them on homeowner policies. The ruling will affect State Farm Lloyds residential policies between September 2003 and July 2008.
The refund is far less than the $1 billion that consumer advocates wanted, prompting one, Texas Watch, to say Insurance Commissioner Mike Geeslin “is guilty of aiding and abetting the state’s largest insurance company in its grand larceny of hundreds of millions of dollars from Texas homeowners.”
If you were cheated by State Farm Insurance you may receive a refund in the form of a credit upon renewal if you are an existing policyholder. The credits will be applied over a period of no more than 12 months. If you are a former or non-renewing policyholder you will receive a check for the amount owed. If you are a current or former policyholder entitled to a refund and you are currently in a Chapter 13 bankruptcy, speak with your bankruptcy attorney to determine if any of that money must be delivered to the bankruptcy trustee. If you are currently in Chapter 7 bankruptcy (not yet discharged or dismissed) inform your bankruptcy attorney of the refund. It is not clear at this time how much money each policyholder will receive. That final dollar amount will be determined by the policy’s length and the amount of premiums paid. State Farm Insurance has expressed its disappointment in the ruling; but has not yet determined if it will appeal the decision. If the company does not appeal the decision it will have 60 days to begin disbursing refunds.