250,000 Overcharged State Farm Policyholders To Get Refunds

SACRAMENTO (CBS SF) – California consumers with homeowners' and renters' policies will receive $13.3 million in refunds from State Farm Insurance Co. in compliance with an order from the state insurance commissioner.

About 250,000 Californians will receive a refund of about $55 on average for premium overcharges made between Dec. 8 and mid-February, Insurance Commissioner Dave Jones announced Thursday.

"We have used all our legal remedies to make sure State Farm's customers are not overcharged and to make sure that State Farm complies with the rate reduction order," Jones said in a statement. "It is past time that State Farm's ratepayers receive the rate reductions to which they are entitled."

Jones had ordered the company to cut its rates, and the order became legally enforceable Dec. 8. However, the company did not comply.

This order also applied to rates charged as of July 2015 forward, which would result in an immediate refund.

In response, the company sued. While the lawsuit was underway, the company didn't reduce the rates.

In response, the department filed a notice of noncompliance. State Farm asked the court to block the notice, but the court rejected the request.

At this point, State Farm began issuing refunds to policyholders who were overcharged between Dec. 8 and mid-February.

It has not yet been determined in court whether the refunds dating back to July 2015 will be issued. The litigation is continuing.

"We are confident the court will uphold the order," said Nancy Kincaid a spokeswoman for the department.

"As a result of pending litigation with the California Department of Insurance, (State Farm) has agreed to issue refunds, with interest, for policies issued or renewed between Dec. 8, 2016 and Feb. 13, 2017," the company said in a statement released today.

"State Farm General understands these are complicated legal issues that will take time. We appreciate our customers' patience as we work to resolve the matter. We will continue to comply with the orders of the Court," the statement concluded.

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