State Farm to pay up to settle suit
THE PLAIN DEALER
SATURDAY, AUGUST 12,2006 - I SECTION C
Customers to share for overpayments in mid-'90s
Plain Dealer Reporter
If you are, or were, a customer of State Farm Mutual Automobile Insurance Co., you may have some money coming to you.
The recent preliminary settlement of an Ohio class-action lawsuit filed more than a decade ago will establish a \$31 million fund to reimburse certain policyholders from the mid-1990s.
The settlement pertains to those customers who paid uninsured/underinsured motorists' premiums on more than one vehicle between Oct. 5, 1994, and Sept. 2, 1997. Such coverage protects policyholders in the event of an accident with someone who is at fault but is not insured or has inadequate insurance. A 1994 Ohio Supreme Court decision determined that only one vehicle in a household needed such coverage.
The Ohio legislature subsequently changed state law in 1997 to allow insurance companies to charge the multiple premiums, said Ann Womer Benjamin, director of the Ohio Department of Insurance.
Letters have been mailed to class members advising them of the settlement and providing forms that must be submitted by Sept. 21 to be eligible for reimbursement.
After the payment of \$6.2 million in costs and attorneys' fees and \$30,000 incentive fees to be divided between two of the case's named plaintiffs, the remaining \$24.77 million will be distributed to class members.
The settlement agreement provides a chart that shows a "hypothetical" overpayment of \$400, which when multiplied by a distribution percentage of almost 32% provides a "hypothetical class member's compensation payment" of \$127.08. It's unclear how representative that number might be of an actual refund.
David Paris, an attorney with Nurenberg, Paris, Heller & McCarthy, said the settlement agreement precludes him or attorneys for State Farm from commenting on the agreement.
State Farm does not acknowledge any wrongdoing in agreeing to the settlement.
"We believe it was in the best interest of our policyholders," said State Farm spokesman Kimberly Brimer.
A "fairness hearing" in Summit County Common Pleas Court has been scheduled for Oct. 5 to provide final approval, determine lawyers' fees, decide whether the two plaintiffs are entitled to incentive fees, and to handle any objections.