Farmers Insurance hit with 130 million verdict in class action suit alleging systematic underpayment of claims.
When Farmers Insurance borrowed a page from Allstate's "good hands or boxing gloves" campaign to minimize payment of claims, it apparently got caught with a hand in the cookie jar. On September 17, a jury in Oklahoma handed down a huge verdict on behalf of 76,000 homeowners whose claims had been underpaid in "bad faith". The award included $30 million dollars in punitive damages. Some states, like Oklahoma, allow punitive damages to deter illegal behavior. Michigan does not allow punitive damages in circumstances such as those identified in Oklahoma.
Farmers has vowed to appeal, and if the Oklahoma Supreme Court is as beholden to the Chamber of Commerce and the insurance industry as many other states' courts are, the award may be overturned, no matter how deserving it was. This past decade the Chamber and insurance representatives have gloated over the control they have secured over various state courts through political contributions, Michigan being one of the most partisan and anti-victim. Even retired US Supreme Court Justice Sandra Day O'Connor, a staunch Republican conservative, has called for reform of these courts to reduce the influence of special interest financial contributions.