Oklahoma, Farmers Insurance Reach $25M Settlement Over Earthquake Claims
Oklahoma has reached a $25 million settlement with Farmers Insurance over the company’s handling of earthquake claims, state officials say.
Oklahoma Attorney General Mike Hunter and Insurance Commissioner Glen Mulready say an investigation revealed that Farmers denied or failed to properly pay approximately 1,000 earthquake claims submitted by Oklahomans who purchased coverage to protect their property.
As a result, the company will reopen the claims process and re-evaluate the claims using an independent administrator. Claims approved by the independent administrator will be paid pursuant to an individual insured’s policy.
According to the agreement, Farmers will make additional payments as needed if property damages exceed the agreed upon amount to pay eligible earthquake claims.
- An earthquake claims review process will be formed to re-examine every eligible earthquake claim.
- Farmers will send each eligible Oklahoman a written notice that their claim has been re-opened for review and describe the earthquake claims review process.
- If an eligible individual has more than one eligible earthquake claim, all eligible earthquake claims will be re-examined.
- The state and Farmers will mutually agree upon an independent, third-party claim administrator with substantial experience in the handling, or reviewing, of property damage claims in Oklahoma.
- Farmers shall have no prior or existing relationship with the claim administrator.
The Associated Press has reported that Farmers said in a statement it believes the actions taken with respect to earthquake claims in Oklahoma “are in good faith and correct.” The company also emphasized that it “has not admitted to any wrongdoing in this settlement, and our decision to settle should not be misconstrued as an admission that we believe any claims were improperly denied.”