State Farm raked in more than $1 billion in 2012 auto insurance premiums in Michigan alone!
Today continues my State Farm week on the Michigan Auto Law blog. Yesterday, I discussed the Campbell v. State Farm opinion, in which the Utah Supreme Court blasted State Farm for its egregious business practices. The shame of it all, as I’ll discuss today, is that doing business this way not only works – but is extraordinarily profitable.
If, that is, you happen to be State Farm.
In Michigan, State Farm Mutual Automobile Insurance Company raked in more than $1 billion (e.g., $1,223,789,302) in auto insurance premiums in 2012, according to data from the Michigan Department of Insurance and Financial Services.
The next largest auto insurer in Michigan did less than half as much business in 2012 as State Farm did.
As a No Fault insurance attorney who has probably litigated cases with every insurance company in Michigan, and well over 100 with State Farm personally, I would like to share my opinion: Today, State Farm is the very worst when it comes to paying its own clients No Fault (PIP) insurance benefits in a timely manner.
Instead, State Farm is far more likely to delay and put people under “investigation” (but without giving their own bewildered customer any reason why; and often causing tremendous harm and financial stress when they do so). State Farm is also far more likely to attempt to intimidate claimants.
In fact, just this week, an attorney in my law office was told by a State Farm adjuster that State Farm is instituting a new policy where it is seeking approval from corporate headquarters in Illinois on any Michigan auto case, big or small, before it pays any No Fault benefits whatsoever. The adjuster said that all State Farm adjusters are now required to first project to corporate what the claim will cost, and that this will likely take 90 days (estimate) before State Farm will start making No Fault payments.
The problem is, under Michigan law, insurance companies are required by law to make all payments within 30 days. So if this is true, State Farm is basically admitting it will be breaking Michigan law on every single automobile accident case it processes from now on!
As you might expect, State Farm left other auto insurers in the dust when it came to racking up complaints in 2012. State Farm had 53% more consumer complaints than the auto insurer with the next highest number of consumer complaints. For more information, take a look at my blog post: Complaints against Michigan’s auto insurance companies rise.
On Thursday, I’ll be discussing what I see for State Farm’s future.