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The "Farmers Insurance "News-Alert" website is dedicated to providing the consumer and general public with detailed information concerning the Farmers Insurance Group. This includes fraud reports, consumer complaints, lawsuit's and other legal actions taken against this company. All information contained herein is for educational purposes only. Original sources, when known are sited.

 

Thursday, February 10, 1994
Home Edition
Section: Business
Page: D-2

Farmers Pays $100,000 Fine to Settle Quake Coverage Charges;

By: THOMAS S. MULLIGAN
TIMES STAFF WRITER


Farmers Insurance Group has paid a $100,000 fine to settle
8-month-old charges that it illegally failed to offer earthquake coverage
to some people, the California Insurance Department announced Wednesday.

The settlement follows an investigation that began after a consumer
complained to the department that Farmers--the state's third-largest
homeowners insurer--had failed to offer her quake insurance after the
1989 Loma Prieta earthquake.

After investigating, the department alleged last June that "Farmers
had failed to make accurate and complete earthquake insurance offers in
150 of 200 files examined."

Farmers spokesman John Millen called the violations "merely technical
infractions" of the state law that says insurers may not sell a
homeowners policy without also offering earthquake coverage.

Farmers agreed to the settlement more than a month ago, Millen said, adding, "The timing of this release--following a major earthquake--I find somewhat curious."

Millen said all customers signed forms indicating either acceptance or rejection of earthquake coverage, but he acknowledged that the process violated the law because the paperwork was not complete.

The department directed Farmers to mail a special quake insurance offering to everyone who became a new homeowners policyholder between Jan. 1, 1992, and April 21, 1993.

The department also said it will conduct "a full examination" of Farmers next month "to verify ongoing compliance with the law." Farmers has about 13.5% of California's homeowners insurance market.




Descriptors: FARMERS INSURANCE GROUP; EARTHQUAKE INSURANCE -- CALIFORNIA; SETTLEMENTS; EARTHQUAKES -- SAN FRANCISCO; FINES;

Copyright (c) 1994 Times Mirror Company

 

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