State Farm Mutual Automobile Insurance Company has agreed to a $2 million fine for unfair claims practices, as confirmed by Montana Commissioner of Securities and Insurance (CSI) Troy Downing.
In addition to the fine, the US insurance giant will also face a suspended penalty of $2 million, pending satisfactory implementation of corrective measures.
This settlement follows a two-year investigation into State Farm’s claims-handling practices. The examination revealed instances where drivers involved in accidents with State Farm insured individuals between November 1, 2018, and April 15, 2022, were under-compensated.
Commissioner Downing described the agreement as a “historic settlement” and emphasized Montana’s intolerance for unfairly placing fault on accident victims. He commended State Farm for its cooperation but stressed the expectation for insurance companies to conduct thorough and transparent assessments, paying what is legally owed.
State Farm has been directed to reassess all affected claims within the specified period. The insurer has already reviewed over 2,436 Montana claims and disbursed an additional $1,182,927.43 in payments.