California Insurance Commissioner Dave Jones must decide whether to approve an order signed by an administrative judge ordering State Farm pay its policyholders.
The judge determined that since July 15, 2015, State Farm’s premiums for homeowners insurance have been excessive and ordered State Farm to refund policyholders for overcharges collected for the past year.
The amount is 85 million dollars.
In addition, State Farm must reduce homeowner rates in California by 7%.
But the reduction in rates and the 85 million dollars in refunds only happens if the insurance commissioner agrees. As for background on Mr. Jones, he was first elected as commissioner in 2010 and re-elected in 2014. He has championed for policyholders in other instances including:
- Obtained insurance company investments in low and moderate income communities;
- Investigating insurance fraud, which has led to nearly 4,276 arrests to date;
- Won a major anti-fraud lawsuit combatting healthcare provider fraud, which costs consumers hundreds of millions of dollars; and
- Leading a national investigation of life insurance companies and secured payment of hundreds of millions in unpaid benefits and strict business reforms to ensure companies end decades-long practice of improperly holding onto life insurance benefits;
- Established first in the nation insurance diversity initiative increasing procurement from diverse suppliers by $587 million.
When it comes to insurance, it’s a 259 billion dollar industry in California- the largest in the nation.
State Farm released a statement and part of the message addressed the high premiums in California being necessary for stability.
State Farm General Insurance Company’s highest priority is to keep our promises to our California policyholders and be there when they need us most. To keep this commitment, we must maintain our financial strength by appropriately matching our rates to the amount of risk we’re insuring.
This ruling was a huge victory for the California policyholders, and the public outcry should be acknowledged by Jones.
As soon as a decision is made, we will post an update for our readers. Stay tuned!