Personal Injury Lawyer Robert (Tito) Meyer, Las Cruces New Mexico

Unfortunately, some insurance companies' poor treatment of their customers never seems to stop. It was recently reported in the newspapers that one of the biggest auto insurers in the country has been cheating its customers, underpaying insurance claims, and destroying important documents. The company even had the gaul to investigate the sex life of one of its own employees, their claims adjuster. The employee was a whistleblower, who had testified about what the insurer did to people.

Big Bucks For Bad Conduct: Last month, the Utah Supreme Court ordered State Farm to pay $145 million in punitive damages to one of its customers. The Court sharply rebuked State Farm Mutual Automobile Insurance Co. for malicious, reprehensible and wrong tactics, and reinstated a 1996 jury verdict against the insurer.

The Utah Supreme Court approved the large award punishing State Farm in part because Aa larger than normal punitive damage award is necessary to attract the attention of State Farm officials and deter the company from further bad conduct. Utah is a very conservative State, and I assume its Supreme Court is conservative and usually pro-business too. So, what did State Farm do that was so bad?

What State Farm Did: State Farm had refused to pay $50,000 to settle a claim from a 1981 auto accident, in which one driver was killed and another driver was left disabled. State Farm refused to settle in spite of the fact that its own investigator found State Farm's insured, Curtis Campbell, was at fault for the auto accident.

Because State Farm would not settle for that relatively small amount (given the injuries), Mr. Campbell was sued, and the jury found him personally liable for $130,000 more than his $50,000 limit of coverage in his State Farm auto policy. Campbell then sued State Farm and claimed the company's refusal to settle the claim against him was part of the company's nationwide scheme to limit how much it paid on claims, so State Farm could meet its corporate fiscal goals.

Another Utah jury awarded Campbell $2.6 million in compensatory damages, plus the extra $145 million to punish State Farm and deter it from cheating future customers. The Utah appeals courts reduced the compensation award to $1 million, but upheld the $145 million punitive award. The Utah Supreme Court said State Farm had long engaged in reprehensible conduct. State Farm repeatedly and deliberately deceived and cheated its customers. For over two decades, State Farm set monthly payment caps and individually rewarded those insurance adjusters who paid less than the market value for claims. Agents changed the contents of files, lied to customers, and committed other dishonest and fraudulent acts in order to meet financial goals.

State Farm's lawyer said the company now guarantees its customers it will pay any court judgment against a customer that is over policy limits, if State Farms takes a case that is against one of its customers to trial and loses.

The Utah Supreme Court decision is Campbell vs. State Farm Mutual Automobile Insurance Company, 2001 UT 89, filed October 19, 2001.

Sex:  State Farm even investigated the sex life of a former adjuster who had provided evidence to government officials that State Farm had underpaid the claims of California earthquake victims.

The Future: State Farm's ads say, >like a good neighbor, State Farm is there.' With neighbors like that, a person does not need enemies. In these troubled times for our country, we do not need to have even more worries than we already have. What about the victims of the September 11th terrorist attacks? How are the families of those innocent victims being treated by their own insurance companies?

It might be tempting to ask one's agent if his (few agents are women) company has been sued by its own customers lately. On second thought, it may not be a good idea to make your insurance company mad at you.... You can contact the State of New Mexico's Insurance Division and ask them about any complaints they have received against an insurer. The State keeps track of these complaints.

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